MANILA, FEBRUARY 14, 2011 (STANDARD) by Joyce Pangco Pañares - President Benigno Aquino III has signed an executive order banning Cabinet and other government officials sitting in the boards of government-owned or -controlled corporations and government financial institutions from receiving salaries and any other form of compensation from those institutions.

The logic seems to be that those officials are already receiving salaries in their posts, so they should not be entitled to any more compensation.

Executive Order 24, signed by the President on Feb. 10, prescribes the rules governing the compensation of government financial institutions.

“The board of directors and board of trustees of certain GOCCs have granted their members excessive salaries, per diems, allowances, bonuses, incentives and other benefits which caused demoralization in the bureaucracy and depletion of government revenues,” Mr. Aquino says in his order.

Executive Order 24 “provides for the standardization and rationalization of the compensation of board members … to prevent abuses.”

The board members of the local water districts were also covered by the new order, said Mr. Aquino who questioned in his State-of-the-Nation Address in July the 30-month bonuses that the officials of the Metropolitan Waterworks and Sewerage System had granted themselves.

The order also prohibits board members from getting annual retainers and stock option plans.

Mr. Aquino said EO 24 would provide performance-based compensation while ensuring that the pay of the board members of government financial institutions would remain “generally comparable with those in the private sector to attract, retain, and motivate a corps of competent members.”

Section 6 of EO 24 classifies government-owned and -controlled corporations based on their assets and revenues.

The Class A corporations are those with assets of at least P100 billion and revenues of at least P10 billion; Class B those with assets of at least P25 billion and revenues of at least P2.5 billion; Class C those with assets of at least P5 billion and revenues of at least P500 million; Class D those with assets of at least P1 billion and revenues of at least P100 million; and Class E those with assets of less than P1 billion and revenues of less than P100 million.

Based on the new classification, board members of Class A GOCCs may receive a maximum per diem of P40,000 per regular or special board meeting or P960,000 annually. Board members of Class E GOCCs may only receive a maximum per diem of P5,000 per regular or special board meeting or P120,000 annually.

Performance-based incentives will also be based on the size of the GOCC but “will not exceed a reasonable percentage of a board member’s actual annual per diem received.”

Executive Secretary Paquito Ochoa Jr. said EO 24 would serve as a “stop-gap measure’’ to rein in the excessive pay that board members and trustees were granting themselves until a new law was passed

Chief News Editor: Sol Jose Vanzi

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