Good morning, ladies and gentlemen. As we get closer to the proxy season, Vale is pleased to hold its webinar to discuss the topics on the upcoming 2020 meeting of shareholders. Vale's proxy, statement, and materials related to the meeting of shareholders were made publicly available at www.vale.com/investors. This conference call is accompanied by a slide presentation. The broadcast on the internet, both the audio and the slide charts, has a few seconds delay in relation to the audio transmitted via phone. It is important to mention the question-and-answer session will be held only through the online platform. With us today are Mrs. Sandra Guerra, Vale's Independent Board Member, and Mr. Luciano Siani Pires, CFO. First, Mr. Luciano Siani Pires will proceed to the opening remarks. Sir, you may now begin.
Good morning and good afternoon to everyone. We do appreciate your willingness to connect in these very tumultuous times. I hope your organizations are coping with all the challenges of the moment. On Friday, we just sent out the proxy materials for the general shareholders meeting, which will take place in late April. We also created a hot site for you to have quicker access to information. Now this is the sixth webinar to engage with investors on those governance, environmental, and social topics. We did two in 2018, three last year, Today we're going to be focused mostly on governance questions. For this, we have Mrs. Sandra Guerra. She's our Independent Board Member since 2017, a member of the Personnel and Governance Committee.
Amongst the independent directors, she's likely the specialist in governance matters, has a very broad experience, board member in several public traded companies, a member of the Brazilian bodies of governance and class associations, and also in the past, she consulted with several companies on the matter. I'm going to hand over to her, and she's going to provide her independent views of the proxy and the shareholders meeting and the way the company is moving forward on ESG matters. Sandra, thank you very much. You may now begin.
Thank you very much, Luciano. Thank you so much for all the investors joining us today. The board of Vale appreciates very much your willingness to have this conversation on the topics that we are going to cover today. We are going to cover three main areas, corporate governance, management compensation, and ESG approach. We will ensure that we can dedicate around 30 minutes for your questions, which are the more important part, of course, of this conversation this morning. Moving to the slide number five, I think. It's important to say that 2019 was the most challenged moment in Vale history. We are saying in all public situations that we will never forget Brumadinho. This is not only a statement, this shows the feeling that I can witness every day I enter at Vale's premises.
You can see this in the faces of our employees, in the Board of Directors, in the management team, working every day with the sensation that this at least can become important learning opportunity for us. This is the trigger, this is the motivation for us to move forward and to change the company to allow that we will never again leave a situation like that. Moving to the next slide. It's important to say that the company is focusing a lot of efforts in changing the cultural aspects in the company. This has been facilitated by the renewal of mostly around 50% of the executives that we have in the company. As you see in the slide, all the ones highlighted in green are new executives on board of the management team. Among the 11 positions here, two of them are new positions created after Brumadinho.
The position of executive officer for safety and Operational Excellence, and the special director for recovery and development. Both of them are new executives in two new positions created after Brumadinho. This fresh blood in the executive team is helping to lead the changes in cultural aspects in the company, which are very important in this moment where we want to transform the safety and management approach. Moving to the next slide. We can see what you have been informed already, the actions that the board took right after Brumadinho, installing three independent committees. The first one, not in order, because the first two ones were the Extraordinary Independent Consulting Committee for Investigation and the Committee for Support and Reparations. These two committees were announced already two days after Brumadinho, and one week later, they were up and running.
A week after, we had installed the Independent Consulting Committee on Dam Safety. This one, the board decided to maintain the committee beyond 2020. We agreed that it's a very important committee, adding value not only for the board, but including to the management team, considering the expertise that we have in the committee and the independence of their view. As you can see, they had already 40 days in field trips analyzing all the dams that we have. They had 19 meetings, and they have provided 16 very detailed reports to the board. The other two committees have already concluded their work. You are able to assess, and there are two links in the presentation where you can assess the report of the Support and Reparation Committee and also the investigation report.
These two committees conclude their work, but the Dam Safety Committee will keep working, providing advice to the Board on dam safety. Moving to the next slide. You can see the governance structure, the governance system that are helping us in governance the company. It's highlighted in yellow, all the new organs or positions created recently. We have, of course, the general meeting representing the voice of shareholders, the Board of Directors, and at the right side, you're going to see the Fiscal Council, which is a Brazilian organ, a Brazilian body, elected by the shareholders in the AGM. The Board now is supported by Operational Excellence and Risk Committee, the Finance Committee, Personnel and Governance Committee, Sustainability Committee. They were the standing committees.
We have, as I just said, the Extraordinary Independent Consulting Committee for Dam Safety, and we are precisely announcing this week, the creation of the Statutory Audit Committee that will be up and running after the AGM late in April. We have, on the right side, you see the changes that we are organizing on in creating a function, which is the Chief Compliance Officer function. This function will gather three areas, the whistleblower channel, the internal audit, and the integrity area. Also we have the corporate governance secretary reporting to the Board. Important to say that this function, the Chief Compliance Officer, will report to the Board of Directors, working closely with the Audit Committee. Below the Board structure, we see the management team. As I have mentioned before, the two yellow positions are new positions, and we have the executives reporting to the Board.
This is the governance structure created to protect and to create long-term shareholder value. Moving to the next slide. We highlight the activities and the decisions we took in regards to intensify the risk agenda. The Personnel and Governance Committee is reinforcing the nominations role. I'll talk about this later on with good news. The Compliance and Risk Committee is becoming the Operational Excellence and Risk Committee. The Statutory Audit Committee, as I said, will be up and running after the AGM. The creation of the function of the Chief Compliance Officer, and as we speak, we have already some candidates that the Board will interview in the following weeks. The Dam Safety Committee to continue over 2020, and the increase of the number of Board members with mining experience.
I will cover this later on in the presentation. Of course, many of the elements that I'm describing here are subject to the approval of the bylaw amendments in the AGM. In the next slide, we see the activity in the board over the last year. Right after Brumadinho, of course, the board was having daily meetings, full-day meetings. In a year, or we had in 2019, the board had 46 meetings. On the slide you see the attendance rate of the directors. You see the number of meetings of the different committees and also the attendance rates in this slide. Moving forward, you see the board of directors that will be presented in the next AGM to complement the term initiated in April last year. As you possibly is informed, the last board was elected under cumulative voting system.
With two board directors leaving the board last year, it is needed that the full board to be elected again in the AGM. These are the board directors that will be presented in the slide 10 and slide 11, the board directors that will be presenting for election in the next AGM. You can see the qualifications and expertise of each one. Of course, in the proxy statement, you're going to find much more detail on each of the candidates. Moving to the slide number 12, you see another picture of the board, there's 13 members, then you're going to see the number of independents, the employee representatives, the tenure, and the average age, and the distribution of age of each board director in the chart at your right. Below, the key qualifications and experience in the board.
As I mentioned before, we have increased mining and operations experience in the board in the last year. You see the international experience, logistics, corporate governance, sustainability, ESG, communications, risk management, strategy and innovation, financial and accounting expertise, and people and talent management. Moving to slide 13, I will dedicate some minutes to talk about the cultural transformation. This is a central topic in the organization today. What we did so far, in relation to the cultural transformation, you see that board of directors and the executives were interviewed in relation to the culture and the culture needed for the company. Five meetings about culture with the executive board. Several workshops, marketing insights, assessments were conducted to analyze the culture prevailing in the company.
We had at the board, a workshop, not only to be sure that we were in agreement with the decisions of the management team in regards to the drivers of the culture transformation, which we were, but also to analyze internally the culture prevailing in the board itself. It was a very, very useful workshop where we, as the sponsors of the culture transformation in the company, we really got involved with all the process. They are having several meetings with level leaders in the company, workshops. The results of all these initiatives so far is that the narrative of the culture is being under construction, and this is a collective work of management and board, and management team, of course, has a protagonist role in this regard.
There have been the 360-degree assessments focusing on the behaviors, the process of development of the leadership in many aspects. There are the use of reflections about the cultural journey, which is becoming regular in several meetings and regular in the company. Human resources with greater visibility of culture actions. Of course, human resources is the lead sector of this project. The board is very closely keeping track of the progress that has been obtained. Let me talk about the indicators that we are tracking, the management team and the board in regards to the culture transformation. First, there is the assessment by Walking The Talk, the company that has been providing advice to the company to better understand the beliefs that are prevailing in the company and the reason for these beliefs. I have mentioned already the 360-degree assessment.
We are additionally doing an assessment on innovation and cooperation readiness. We will be tracking indicators on global corporate behavior as well. Currently, management team and human resources are analyzing the use of artificial intelligence to capture the use of symbols and signs within the company that can inform us on the changes that are being observed in regards to culture. These are the indicators that we are going to be tracking regularly. There are some elements that already show that a change has really started. First of all, the position on diversity and inclusion as part of the ESG efforts. We had very recently, two to three weeks ago, a workshop with the leaders of the company from around the world talking the full day on important elements of diversity, bringing cases, discussing elements.
I was here in the day that the workshop took place. I saw the people leaving the workshop very energized and really willing to change the situation with regards to diversity. As we all know, mining, when we talk about diversity, gender diversity, for instance, it's important to say that the mining industry in general left behind this aspect. When I met people leaving the workshop, I felt that there is, in the air, this willingness of really changing the situation. Although we know that this is not easy to attract women to work in the mining industry. I felt that the management team is really decided to go further on this and do this very fast. Other indicators that I perceive as already results on the road to transform culture is the various workshops, leaders meeting on culture, diversity, and inclusion.
I'm very excited, in particular, with the culture transformation that I can witness, and I can say that the board is very closely keeping track of these improvements. Moving to the next slide. We will be talking now about management compensation. Here in the first slide, number 15, we can see the distribution on fixed fees, the salary, annual bonus, matching, and the virtual share plan. You see the CEO compensation and other officers' compensation, the amount, the percentage dedicated to each of the items. Of course, the salary is to attract and retain our team. The annual bonus is a short-term recognition of participation in the results of the current year. The matching encourage long-term retention and commitment of executives as they contribute in the same way the company does. It shows their commitment to the company.
The last one, the virtual share plan, which you can see the percentage dedicated to CEO and other officers. Now is 80% to total shareholders' return, of course, relative to the peer group, and 20% dedicated to ESG sectors as indicators. Health and safety, 10%, and the metric is based on the commitments of Vale to 2030 is another 10%. Moving to the other slide, we show the 2019 short-term incentives, where you see the EBITDA, of course, that were not achieved. The sustainability indicators that were 10% were achieved. What we are talking here are the sustainability indicators linked to the sustainability goals of the company, Health and safety, and the crisis management and reparation. We are talking here about five elements that were considered to invest 40%, Brumadinho recovery, legal agreements, operational continuity, reputation and management of communication, and organization and culture restructuring.
These elements of remuneration of 2019 was decided right after Brumadinho, because we believed that we had to lead all the efforts to management of the crisis and do the reparation. We created this new target for the year, the new goals. As the People, Remuneration and Governance Committee, we tracked all the development of this every month last year. The final evaluation was a process where the executives made their self-assessment of each area, for each of the five areas included in the goals. We had two board committees involved in assessing, and having our vision of the board of their achievement of the goals. The Sustainability Committee and the People, Remuneration and Governance Committee. We had joint sessions to analyze each of the five goals, and to decide our position of the board in regards to the five goals established for crisis management and reparation.
Moving to slide number 17. This is the remuneration, the short-term incentive for 2020. You see EBITDA sustainability indicators, health and safety, risk management, and individual contribution. 40% is related to the achievement of EBITDA, 10% of sustainability indicators, and 10% health and safety. Risk management 10%, and individual contribution 30%. I would like to highlight in the right side of the slide that the safety and operational excellence officer has no goal whatsoever related to EBITDA. All his remuneration is related to the other factors, sustainability, health and safety, risk management, and individual contribution. With that, we want to ensure that the only element that would drive the area behavior is related to those aspects, sustainability, health and safety, and risk management. Moving to the next slide number 18.
You see the reparation and the achievements that we have been observing in regards to the reparations related to Brumadinho. You have been receiving news on that recently, restoring the livelihood and dignity of those affected, economic and non-economic compensation, the amount of money into provisions and incurred expenses, the expert panel report, the restoring the productivity capacity of affected areas, recovering the environment, the agreement signed with public entities, and the report from the Investigation Committee, the Independent Investigation Committee to the board. As the reparations advanced and the circumstances in general improved, the board was able to resume variable compensation. This is an important element because of the resilience of the team facing the difficulties in a crisis situation as we have been through. It is very important for the company's performance and for the reparation itself.
The board decided to continue the payment of 2018 variable remuneration to the ones not involved in any investigation or in the reports from the Investigation Committee. This is a way that the board understands to thank and to reward the ones who are contributing importantly to the company face the crisis coming from Brumadinho. Be sure that it requires a lot of resilience of our team to face the situation and the problems in all the operations and in the field. We now move to the ESG agenda, and in the slide 20, I would like to highlight a very important element and very dear to my heart, which we achieved the last year, which was the opening of this engagement process of the board with investors. I myself have been involved in meetings in London and individual conversations with individual investors throughout the year.
I can say that is a very important opportunity for us to learn. What we show in this slide is what we believe we are learning from hearing from you. In this engagement with investors, we understand that the investors were concerned about the diversity of experience in the Board. We responded by adding six new members with different backgrounds in 2019. We focus on mining and operations background. We also learned that there was a concern regarding the nomination, and we responded by promising to establish a Nomination Committee by 2021. We are working to strengthen the nomination portion of the People, Remuneration and Governance Committee until we have the Nomination Committee installed. We also understood from you that there was a need of a better disclosure on ESG.
Our response was a portal presenting all the elements and keeping track of our progress and our goals on ESG. I really encourage you, if you didn't do so yet, to visit the ESG portal, bringing lots of information on ESG and our goals and the things that we are committed to achieve. With regard to compensation, we heard that the C-level should be committed to the 2030 goals. Our response was an addition of 20% ESG factors to our long-term compensation. In regards to gender balance, we should include the percentage of women in the workforce. The response was a new goal in this regards to double the female presence from 13 to 26 by 2030. On climate change, we respond aligning our goal with the Paris Agreement and targeting carbon neutrality by 2050.
Moving to the slide 21, during the Vale Day in New York and London, late 2019, we launched our commitment to closing the ESG gap in relations to best practices by 2030. You can track our plan in this regard the ESG portal, which is presented in the slide number 22. It's the way we increase transparency of our sustainability approach, and we hope that when you visit the portal, you can give us feedback how to improve the portal because this is what we really want to create a way where the information regarding ESG is available to you and that it's a channel of communication that we want to improve through time. Vale proxy statement in slide 23 and the materials to the meeting shareholders were made public, as Luciano was saying, in the end of last week.
I can say that you may notice a very important change in regards to the last year. I believe you will appreciate the information that is presented in the proxy statement, and I think there is a very important improvement in regards to the last year. I will finish saying that our ambition here is to become one of the safest and most reliable miners in the world. The management team and the board are working hard on that, and we believe that we only will get there with your help. We are very keen in listening from you, your concerns, the opportunities you see for us because, we firmly believe that we can learn a lot from you. That's why I open now the Q&A sessions, and we are willing to hear from you.
Sandra, we've been receiving through the internet some questions out which I'll read for you. First one. From Mr. Jackson from Sustainalytics, Bruce Jackson. He said that only 20% of the 17% overall long-term incentives equate to only 3.4% of total long-term. He's referring to the amount of ESG on the long-term incentives. He says, "This could be higher given the risk attached. Long-term, will the proportion of ESG long-term increase?" The question is, are there any plans for that, and how far down the management ladder does this apply?
Thank you so much, Jackson. Very good to hear your perception on that. When you deal with compensation in a company as big as Vale, you have to be very safe in regards to your steps. I believe that this was the first step towards improving the long-term approach to our compensation. When you talk about the compensation that will impact the compensation of all the employees at the end, we have to be careful, and a bit more conservative in this regard. I would say that you may consider this as not a first, because this has begun before that, but as a step towards going to considering more and more the future and the sustainable approach in regards to compensation. It's a step.
We believe we are not there yet, and we want to keep on improving, and learning from your views is important in this regard. Thank you for your feedback.
Jackson, if I may add, there's also 30% of ESG metrics on the short-term bonus. There's also an overarching understanding around the company that the share price, for example, is very responsive to improvements on ESG. You should consider also that indirectly the matching portion also, everyone is on the same page that even to create value to shareholders and to the executives themselves, the ESG progress is very important. The question, how far down the management ladder does this apply? This goes three levels below the executive officers.
Oh, yeah.
Not to the first layer of management, but the second layer already, middle management has it. The next question, Mike Shavel from Wellington Management. There has been a lot of changes since Brumadinho. Why were these changes made after Samarco?
Thank you, Mike. I arrived at the board of Vale in November 2017, was my first meeting. When I started, we were two independent directors by then, the first one in the history of the company. As soon as we arrived at the board, we asked for several meetings with executives, including the dam responsible ones, all the functions. Let me say it was around more than 20 meetings, and around this amount of meetings and visits and so on. My perception as I arrived is that there were lots of initiatives that took place after Mariana, after Fundão. I can say that, for instance, when I had the other independent directors, Isabella Saboya and myself, we had a meeting with the three executives responding for the dams structures. By then, there were three.
We learned from the several improvements that they have been doing since Fundão. Another element that I could say, as soon as I arrived, I was the first one to be interviewed in a risk assessment by one of the big fours. This was a response after Mariana, after Fundão. The understanding, the awareness, increasing the awareness in regards to risk. It was an important project with the crisis model, was reviewed and implemented throughout 2019. I can say that. I saw, of course, the minutes of the boards prior to my arrival. Again, I saw in the various minutes that several actions were taken. A strong concern in regards to the expenditure, in regards to everything that would improve safety in the company. Many things were done after Mariana.
What we can say now, for sure, that all the things that were done were not enough, because if it would be enough, we are not talking about Brumadinho. There were certainly many initiatives that took place in Vale even before my arrival and after my arrival. Of course, after Brumadinho, the changes and the initiatives got to another level, and not only within Vale. I can say that because I have been participating in international conference, local Brazilian mining conferences, and I have been interacting with agents of many companies and providers. The change is in all the industry, not only within Vale. I believe that what happened in Brumadinho now created an awareness, an understanding of safety, which is completely different from the past.
Okay. Jaime Goldstein from Hermes asks, "Although the work of the Extraordinary Committee on Reparation has been formally concluded, the reparation work is far from done. Will the board commit to provide regular progress assessments on the reparation work from an independent third party?
Thank you, Jaime, for your question. Yes, you are right. The committee has been concluding their work, we are far from concluding our work here. Yes, one of the elements of the plan is having a third party that will track the improvement and all the elements of reparation. We are about to disclose the action plan of the board in regards to all the 26 elements suggested by the independent committee. We are going to have a third party assessing as we go forward on that.
Okay, now we have two questions from John from AQR. The first one is, talk about the cultural transformation and how are you going to measure it? I guess we spoke a little bit on this, but maybe Sandra, you want to add some comments on this one? The next question, he asks to elaborate a little more on the board's work throughout 2019 on governance enhancements.
Right. Thank you so much, John, for your questions. Well, on cultural transformation, we are going to follow as a board certain indicators. We, of course the board will be assisted by the People and Governance Committee, which I take part of it. We are going to observe the elements that I have mentioned. The assessment on beliefs, the 360 assessment, the assessment on innovation and cooperation readiness, the global corporate behavior. As part of these assessments were done in the beginning of the process, we are going to track the changes in a certain period again. Some of the assessments are being repeated in some time. In April, that will be one of them, and as we move forward, we are going to repeat some of the assessments. Some of the assessments are new.
As I mentioned, I'm very excited with the possibility of using artificial intelligence to capture things that you may not capture in the assessment. Of course, when you talk about assessment, you are talking about perception of the respondents, right? If we're able to use artificial intelligence, using all the data available, we can capture the use of single signs, some words in the documents that would be very meaningful to us. Management will track all these elements that I have mentioned, and the board will regularly track also the improvements. The board is a sponsor of the project, and by measuring it, by following, by tracking the progress, we are doing our role in being a sponsor.
In regards to your second question, the board work in 2019, in regards to governance, I'm not sure precisely which aspect would you like me to cover, but it was a very intense year, to say the least. As per the number of the board meetings that we had, you can see that it was an intense work, very difficult decisions. The reaction of the board, like a couple of days after Brumadinho, were very telling in regards to the suspension of variable compensation dividends and the creation of the committees. We have been, throughout the management of the crisis, considering the elements that we had to improve. Because, for instance, we want to focus very much on risk, the former governance and risk committee was able to focus on risk, and the People committee add the governance portion to its work.
We have been working on risk management, for instance, and first understanding the visions of investors, not only by the engagement that I have mentioned before that we had in different meetings, but also management hire some assessments, listening in a structured manner your investors' vision on many of the elements. We work on pretty much on risk and safety. It was a lot of work of the board this year dedicated to this topic, to culture transformation, to disclosure, and I can say that you can see the results of the management effort when you see the proxy statement of this year and the ESG portal. We have been talking a lot in the board. We have been doing two specific works on governance in the board. One was the board evaluation, which was recently concluded.
There was an important improvement in regards to the previous board evaluation, as this year we added the individual board evaluation in the process, and we also hired an international firm to do a benchmark on various governance elements throughout board and particularly focus on the board. These are the main elements on governance that we focused this year.
Sandra, now we have, again, from Jaime, two questions. First one: although we acknowledge the progress in the remuneration structure, we would encourage the board to look into setting a requirement on minimum share ownership by executives while they are executives of the company. Has this been considered by the board? I'll stop here before I move to the next one.
Thank you, Jaime, for your question. As I was mentioning to Jackson of Sustainalytics before, this is a work in progress, as I would say. We didn't consider that yet, although we have a level of stock ownership today. Executives are obliged to accumulate and maintain shares ownership equivalent to, if it's the CEO, 36 times the monthly fixed pay salary, and other executive officers, 24 times monthly fixed pay salary. This is what we have today. I understand your question would be in regards to increase this portion. We didn't consider this year.
The next question is: could you give examples of how the Board engages with the workforce? Is this done in a structured way? Is there a Board member who leads the engagement with the workforce?
We don't have precisely a board director that would engage with the workforce. This happens pretty much in the fields operation visits that we have throughout the year. We were supposed to have a visit starting today night, to Minas Gerais and Espírito Santo, visiting several operations. This visit was canceled because of COVID-19, of course. Safety comes first. We are having these sort of interactions. Now, the Sustainability Committee has been doing such an interesting work, and they are having field trips. The committee is having field trips, interacting not only with the workforce, but also with different stakeholders. For instance, one of the last visits, the Sustainability Committee had conversations, free conversations, not planned, and with the people living near the railway, and understanding their needs, their perception. It's a direct conversation of the board with stakeholders, among them, the workforce.
Your question brings me and presents an idea that I will discuss in the Board of having someone focusing on this dialogue with the workforce.
Okay, this completes our webcast. We hope to have more opportunities going forward to have these discussions with you. Our team is here prepared to engage with you to answer any questions whatsoever regarding the proxy season and the general shareholders meeting. We look forward to your participation to help Vale become a better company. Thank you very much. Thank you, Sandra. Thank you, all of you.
Thank you so much for dedicating the time to better understand and to bring your vision, which is very helpful to us. Thank you so much.
That does conclude Vale's webinar for today. Thank you very much for your participation. You may now disconnect your line.