QuestionsQuestions (CDA MEMORANDUM CIRCULAR NO. 2013-17)
In the absence of bylaws fixing directors’ compensation, directors cannot receive any compensation except for reasonable per diems, subject to the suspension rules under the law.
Any compensation other than per diems may be granted by majority vote of members with voting rights at a regular or special general assembly meeting specifically called for the purpose, after adoption of a General Assembly resolution approving such compensation.
No. The law prohibits any additional compensation other than per diems during the first year of existence of the cooperative.
Per diems are suspended if (1) the cooperative incurred a net loss in the preceding year, or (2) the dividend rate fell below the official national inflation rate for the preceding year.
No automatic recovery/compounding is allowed. The suspension must be strictly implemented until the cooperative recovers from the adverse circumstance, and there is no recovery or payment of per diems for the suspended period.
It defines “compensation” broadly as any remuneration given for services rendered (e.g., salary), regardless of name or euphemism. This matters because benefits disguised as “allowances” or other labels may still be treated as compensation subject to Article 46.
Per diem is an allowance given as reimbursement for extra expenses incurred in performing duties. Compensation is broader remuneration for services and is not limited to reimbursement of expenses.
An honorarium is described as a gesture of appreciation given to officials/employees not as a matter of obligation. However, because compensation is broadly defined, students should analyze whether an “honorarium” is actually remuneration subject to the Article 46 restrictions depending on its nature.
No. If directors’ compensation is not fixed in the bylaws, directors are not entitled to compensation from the cooperative except for reasonable per diems, and any compensation other than per diems requires the specific General Assembly approval procedure.
Officers and members of committees may have compensation fixed in the bylaws; employees’ compensation is determined by the board of directors unless already fixed in the bylaws, consistent with labor laws.
No. It must be specifically authorized by majority vote of members with voting rights at a meeting called for that purpose, supported by a General Assembly resolution approving the compensation.
It underscores that directors act as trustees for members and should not use their position for personal benefit at the cooperative’s or members’ expense, supporting strict compliance with the authorization and limitation requirements for compensation.
Only reasonable per diems are allowed during the first year; no additional compensation other than per diems is permitted.
To ensure proper implementation of Article 46 of RA 9520 and enhance accountability and fiduciary responsibility of cooperative officers as trustees of the members.
Inspectors/examiners of the CDA must include implementation of Article 46 and the Circular as an item for inspection/examination and reflect findings in the inspection/examination report.
It takes effect after fifteen (15) days from filing of its copy with the Office of the National Administrative Register (ONAR).