Noy caps perks of GOCC executives

MANILA, Philippines –  President Aquino issued an executive order yesterday capping the salaries and incentives of top officials of government-owned and controlled corporations (GOCCs) and government financing institutions (GFIs).

Through Executive Order 24, the Aquino administration sought to “address deep concerns on the excessive and unreasonable pay and perks” of board members and trustees of GOCCs and GFIs.

“This EO will serve as a stop-gap measure to rein in excessive pay for GOCC directors and trustees until a law is passed mandating such,” Executive Secretary Paquito Ochoa Jr. said.

“This EO has just been signed by the President, with the end in view of making GOCCs competitive with those in the private sector. This is an effort to balance the perks, just to make sure that the perks are not abused,” deputy presidential spokesperson Abigail Valte said.

The EO would be the framework for setting the compensation range for all presidential appointees in these agencies.

“While we do not begrudge GOCC executives for rewarding themselves for exemplary performance, these financial rewards should be within reason. This EO seeks to set the guidelines that will standardize pay rates to prevent abuse,” Ochoa said.

He lauded Secretaries Cesar Purisima of the Department of Finance and Florencio Abad of the Department of Budget and Management for “working with us to exhaustively study and review existing compensation policies.”

“Their input was invaluable in the drafting of these policy guidelines,” Ochoa said.

The EO covers board members and directors of GOCCs and GFIs regardless of classification. Their compensation shall be subject to approval of the President.

It also includes representatives of GOCCs in the boards of private corporations where the government or GOCCs have investments.

“Let me emphasize what the President said on GOCC Governance Day last January: The money earned by GOCCs belongs to our people and should be used for their benefit, not the benefit of those who run GOCCs. Our people are our boss, and this EO should help those who manage our GOCCs remember that,” Ochoa said.

This means that all chartered and non-chartered GOCCs – whether covered by or exempted from the Salary Standardization Law – and their subsidiaries are directed to comply with the policies and guidelines on compensation and reimbursable expenses set under the EO.

The peculiar nature of each corporation would be taken into consideration in determining a compensation system.

The maximum amount of performance-based incentives to be granted to board members or trustees should depend on the size of the GOCC and GFI, and should not exceed 50 percent of the board member’s annual compensation received for outstanding performance.

Under the new pay scale, salaries and emoluments of board directors, trustees, and executives would depend on the assets and revenues of concerned agencies.

The highest compensation would be for executives of GFIs or GOCCs with assets of at least P100 billion and with revenues of P10 billion.

The EO also sets ceiling for per diems at P40,000 per meeting or P960,000 per year for profitable firms.

Secretaries, undersecretaries, assistant secretaries and other government officials who are ex-officio board members, including their authorized representatives, “shall not be entitled to any additional compensation for their services as such.”

The maximum per diem per committee meeting for members of the board shall be “based on the size of the GOCC and shall be at most 60 percent of the amount set per meeting, but not to exceed the maximum annual amounts.”

Actual amounts provided shall “consider the nature of the GOCC and fiscal realities, but any increases from the current rates of per diems being granted shall take effect only upon approval by the President.”