EO 24 limits compensation, allowances of GOCC, GFI directors

MANILA, Philippines - The government is expected to save about P118 million or about 47percent of total compensation that board members of of government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs). have been receiving annually with the issuance of Executive Order No. 24.

EO 24 regulates board members’ compensation, allowances and privileges.

Budget Secretary Florencio Abad also said that under the EO, the government could get back any properties or monies from the board members if they were found to be in unauthorized possession of these assets belonging to their GOCC or GFI, or if they earned profits in violation of their fiduciary duty or in excess of limits to compensation, they shall be compelled to return these properties or monies to the GOCC or GFI.

“In other words, they should return what is not theirs to begin with,” he stressed.

EO 24, issued on Feb. 10, limits the compensation of board members to per-diems for board meetings and committee meetings and performance-based incentives.

“Board members don’t just sit around. They have to perform as stewards of the people’s interests in these firms. Their compensation should be commensurate with their level of responsibility and accountability, as well as the performance of their firms,” Abad said.

The EO sets standards on board per-diems depending on the asset size and revenues of GOCCs and GFIs. Board members may only receive a maximum annual per diem equivalent to 24 meetings.

For board members’ attendance in committee meetings, they may receive additional per-diems but only up to 60 percent of the per-diems they receive for their attendance in full board meetings.

Abad also said the EO allowed GOCCs and GFIs to grant performance-based incentives to board members, but contingent upon performance measures agreed-upon with their supervising department, endorsed by the Department of Budget and Management and Department of Finance, and approved by President Aquino.

In line with existing laws and regulations against double compensation, the EO states that board members sitting in an ex-officio capacity-such as Cabinet secretaries and government officials, President of GOCCs or GFIs, and board members of parent GOCCs or GFIs-will not receive these perks.

No More Discretionary Funds; Reimbursements Limited; Dividends, Excess Compensation To Accrue To Goccs/Gfis

“Through this EO, we are limiting the entitlement of board members to the resources of their GOCCs and GFIs. In other words, they cannot just use these for their personal benefit,” he said.

Abad said the EO eliminated the past practice of giving board members hefty “discretionary funds,” and in its place, established clear rules on reimbursable expenses. He said that, as a general rule, the GOCCs and GFIs directly pay for expenses of board members in discharging their official duties. However,

In case of exigencies, GOCCs and GFIs may reimburse reasonable actual expenses of these board members. These reimbursable expenses are limited to transportation expenses in going to and from meetings, travel expenses during official travel, communication expenses and meals during business meetings.

Abad also said that compensation received by ex-officio board members sitting in boards of subsidiaries or private corporations wherein the government has investments shall accrue to the GOCC and GFI represented.

In the case of appointive or elective board members sitting as representative of a GOCC or GFI in the board of private corporations, their compensation cannot exceed the compensation of board members of the investing GOCC or GFI. Any excess compensation should accrue to their mother GOCC or GFI.