Ms. Marissu Bugante, vice president for public affairs and special events division of the Social Security System, addressed a letter to Mr. Rene Q. Bas, this paper’s publisher-editor. She wrote:
“This refers to Mr. Emeterio Sd. Perez’s column titled “SSS’ lucky 3 millionaires on Union Bank board” published in The Manila Times on May 5. The piece discussed the bonuses and other compensation received by officials of the Union Bank of the Philippines (UBP), including three board directors representing the Social Security System (SSS).
“For the information of Mr. Perez as well as our members, the compensation received by SSS nominees in the boards of UBP and other investee companies is limited to per diems for actual meetings attended that are subject to specified caps, as provided under Executive Order No. 24 issued in 2011.
“Benefits granted to SSS nominees in UBP on top of the allowable per diems, such as salaries and other forms of remuneration, are turned over to SSS and credited as part of its investment income. And with the bank’s consistent profitability in recent years, SSS has been generating positive returns from its UBP holdings, which in turn redound to the benefit of SSS members.
“While we deplore the unfair reference to the SSS nominees as millionaires, we hope that Mr. Perez and your readers have been clarified on the issue.”
I thank Ms. Bugante for the clarification. But to set the record straight, it is not my intention to put the SSS nominees in a bad light or embarrass them. I wrote the piece on UBP’s executive compensation for the benefit of the public, who trade on stocks listed on the Philippine Stock Exchange. UBP is one such stock.
For the information also of SSS members, I based my Due Diligencer pieces on disclosures. To complete a story, I try to find supporting data from audited financial reports. This was how I arrived at SSS nominees being “lucky millionaires.”
In a PSE posting, UBP had this to say on directors’ compensation: “The non-executive directors receive only per diems of P80,000.00 for each attendance in meetings of the board and P40,000.00 for committee meetings . . . The directors receive per diems for attendance in meetings of the board and its committees in accordance with the bank’s By-Laws but do not receive compensation from the Bank for services rendered.”
Then a footnote to the financial statements based on the audit by Punongbayan & Araullo summarized the board compensation: “Directors’ fees incurred by the Group (meaning parent and subsidiaries) amounted to P33.046 million in 2013; P23.253 million in 2012; and P19.616 million in 2011, and by the Parent Bank amounted to P30.489 million in 2013; P23.247 million in 2012; and P19.611 million in 2011.
Included in the annual pay were the fees received by executive directors, who are not entitled to P80,000 for every meeting attended. Instead, the chairman and chief executive officer, and the president and chief operating officer, receive only P3,000 and P1,500, respectively, for each board meeting attended. They are also paid P3,000 for each committee meeting.
I have long been asking the Securities and Exchange Commission to require the full disclosure of individual compensation of the executives of listed companies. In this way, public investors would know who gets what and how much.
In the absence of an SEC policy on individualized compensation, will SSS take the initiative in disclosing how much Emilio de Quiroz , president and chief executive officer, and other high-ranking SSS officials receive each year as members of the board of public companies? When it does, then the public would be able to appreciate them for giving up their fees, even if only partially, in favor of SSS funds.