The same amount of work for a lot less money

Stories about Mendoza’s murderous hostage taking have managed to bump off the news headlines the scandalous stories about the excessive pay and perks of officials of government-owned financial institutions and corporations, which were further exposed during recent Senate hearings.

I mentioned in my column two weeks ago that given that congressional inquiries should be in aid of legislation, Congress ought to pass a law to limit what these GOCC boards could grant themselves and their employees in terms of compensation and perks. The public expects no less from the senators after their investigation is concluded.

But Sen. Franklin Drilon is right. A law will take time to effect. And before it is enacted, GOCC and GFI officials would continue receiving unwarranted allowances, bonuses, incentives and other perks, unless President Aquino puts a stop to the practice. So the Senate unanimously adopted a resolution urging President Aquino to suspend the “excessive and unwarranted” perks of GOCC executives. As of this writing, the Palace said it will issue any time this week such an executive order drafted by the Department of Budget and Management.

It’s really about time. What these GOCC and GFI executives receive could easily compare to what executives get from top corporations like the Philippine Long Distance Telephone Co., which regularly gives over P1 billion in pay and perks to its executives under its long-term incentive plan (LTIP).

The thing is, these GOCC executives are not working for PLDT. These people are on the government payroll, working for government companies that are mostly losing money. Their compensation program is indefensible and has been the cause of public outrage.

What they get is also more than 100 or even 500 times the average government worker’s wage. And for what? For attending a board meeting for an hour or two? Compare that to a public school teacher who has to teach two shifts a day, and who practically works from daybreak to sundown. Certainly these public executives, especially those who sit on the boards as directors or trustees, could accomplish the same amount of work for a lot less money.

Exactly what kind of formula is used to arrive at these bonuses, which in the case of let’s say the MWSS, amounts to an astounding 33 months? Sure they could argue that they are not covered by the salary standardization law like other public servants. But what kind of standards exactly do they adhere to?

And if they want to compare what they get to the private sector, well, in the private sector what employees and executives get are tied up to their performance and the performance of the company. In short, they are held accountable for what they get. It’s hard to imagine a private company that is losing billions giving the same perverse incentives like the MWSS did.

If it were up to me shareholders in, for example, public pension funds like the SSS and the GSIS, should have a say in their directors’ or trustees’ pay packages. The latter should go through the scrutiny of ordinary members whose money it is these executives use. This would eliminate their huge windfalls.

As we have seen already, the board of directors or the board of trustees of these public corporations cannot be trusted. You cannot allow them to independently set their own remuneration packages. There must be a separate and independent remuneration committee which would set directors’ pay and perks, and there must be full public disclosure of these.

And even as we cap the amount of what these public executives can make, we should also check if they have paid the correct taxes from their huge windfalls in the past. –ERNESTO F. HERRERA, Manila Times

ernestboyherrera@yahoo.com