MANILA, Philippines?How lucky are the members of the SSS Commission, the policymaking body of the Social Security System?

The four top executives of the state-run pension fund collected a combined total of P127.4 million in bonuses and compensation?the bulk of which came from stock options?from one corporation alone over the past three years.

A major source of compensation for the officials was the exercise of stock options at Philex Mining Corp. where the SSS has some P14.3 billion in investments, according to Sen. Franklin Drilon, chair of the Senate finance committee, at the hearing Tuesday into the allegedly excessive remuneration of officials of government-owned and -controlled corporations (GOCCs).

Outgoing SSS Chair Thelmo Cunanan made P55.3 million in a single transaction when he sold his 3.14 million in stock options at P19.50 a share on Nov. 12, 2009. The exercise price was only P1.90. In all, Cunanan got P66.6 million from stock options at Philex from 2007 to 2010. (The exercise price, also known as the strike price, is the price at which shares may be purchased or sold by exercising one?s options.)

Just lucky

Former SSS president Romulo Neri said there was nothing irregular with the stock option earnings. He said Cunanan, in particular, was ?just lucky? to make such an amount.

Drilon said earnings from stock options should have been remitted ultimately to the SSS coffers.

?The possible criminal liability would arise from the failure of Mr. Cunanan et al to exercise the extraordinary diligence required of a manager of a trust fund, which is the SSS pension fund,? he told reporters.

?These funds do not belong to the government. These belong to the workers,? he said.

Neri himself made P11.8 million from stock options from May 28, 2009, to March 5 this year. Former SSS president Corazon de la Paz-Bernardo made P9.7 million in August 2008 while commissioner Sergio Ortiz-Luis earned P4.6 million on Jan. 4, 2010.

If you add per diem allowances and other forms of compensation, the four SSS executives received the following amounts in the past three years?Cunanan (P83.1 million), Neri (P17.2 million), De la Paz (P20.7 million), and Ortiz-Luis (P6.3 million).

Not bad for ex-general

?P83 million for a retired general? Not bad,? said Sen. Sergio Osmeña III, referring to Cunanan. Neri defended Cunanan, saying ?he?s very diligent, he works hard.?

Asked if his Philex stock option earnings should have been turned over to the SSS, Neri replied: ?It?s part of my compensation as a board member.?

Employee stock options are one form of compensation corporations give to executives and senior employees. Unlike salaries or bonuses, the value of a stock option depends on the price of the company?s stock going up.

Neri later told reporters that ?there?s no law that requires us (to turn over the earnings) and (they?re) declared as our personal income.?

Drilon said that had the amounts not been declared as bonuses they would have gone straight to the SSS.

The idea is that a stock option thus serves as an incentive to the employees to work hard to ensure the company performs well.

At the same hearing, Drilon said the Commission on Audit and the Department of Budget and Management should have a common definition of what constitutes the salaries of GOCC officials.

According to Sen. Edgardo Angara, it seemed the COA had lumped some operating expenses into the compensation package of GOCC officials which made it look like these GOCC officials had been enjoying fat paychecks.

Audit flaw

Angara noted that COA?s classification of funds that constitutes the salary of government officials was different from the DBM?s classification.

?It seems that COA appreciates operating expenses and intelligence funds differently but DBM looks at these expenses not as personal compensation,? Angara was quoted in a statement sent by the office of the Subic Bay Metropolitan Authority (SBMA) administrator Armand Arreza.

Arreza and Clark Development Corp. (CDC) president Benigno Ricafort, who were at the hearing, are allegedly the two ?highest-paid? government officials with salaries in 2009 allegedly amounting to P26.865 million and P14.506 million, respectively.

Drilon said a COA memorandum in 1992, which lumps certain operating expenses of government agencies as part of the salary of the heads of these agencies, may already be ?outdated.?