Miriam B. Eleccion Vda. de Lecciones

August 26, 2002 SEC OPINION Miriam B. Eleccion Vda. de Lecciones Administrator NNA Philippines Co., Inc. Unit 2006, 88 Corporate Center, 141 Valero cor Sedeno St. Salcedo Village, Makati City M a d a m : This refers to your letter dated August 14, 2002 requesting advice on the applicable laws in the absence of provisions in the by-laws governing appropriate compensation for services rendered by the Corporate Secretary of the corporation. Corporate officers other than directors are entitled to receive compensation for they do not exercise direct control and management over the funds and properties of the corporation. Since the board of directors appoints/elects the corporate officers, ordinarily then and as managers of the corporate affairs, it is within the board's power to fix the salaries of the officers by way of a resolution to that effect. (Rosario N. Lopez, The Corporation Code of the Philippines, p. 468 citing SEC Opinion dated August 19, 1992) What is appropriate or reasonable compensation for such services is a question of fact. Compensation is dealt with as an issue of business judgment to be questioned only in case of clear abuse. ( Ibid, p. 469) Simply put, in the absence of the by-laws provision fixing the salaries of corporate officers, the board of directors may fix the same in a resolution duly adopted for the purpose. CHIaTc Very truly yours, (SGD.) BENITO A. CATARAN Director