Competitive Pay: Key To Attracting Top Talent

Concerns have recently been raised about the high salary demands of officers at the state-run Maharlika Investment Corp. (MIC), suggesting these demands could surpass some of the highest-paid officials at the Bangko Sentral ng Pilipinas (BSP) and have delayed the organizational structuring of the sovereign wealth fund.

The Maharlika Investment Corp. aims to recruit the best talent through competitive compensation, essential for the effective management of the country's sovereign wealth fund.

However, such criticisms overlook the broader perspective and the crucial need for competitive remuneration to attract top talent from the private sector.

To ensure the prosperity of the country’s sovereign wealth fund, MIC must have the flexibility to attract the best and brightest through fair and market-competitive compensation.

Compared to global counterparts, the salary expectations of MIC officers are actually quite modest.

For instance, the CEO leading Norway's colossal sovereign wealth fund earns a staggering 6.65 million crowns annually, translating to approximately P40 million per year.

Norway’s fund, valued at nearly $1.4 trillion, posted record profits in 2023, significantly driven by investments in tech giants like Microsoft, Apple, and Nvidia. This level of compensation reflects the critical need for top-tier talent to manage substantial national assets effectively.

Contrary to what has been suggested, the delays in MIC's organizational structuring are not merely due to salary disputes.

Insider sources from the economic team revealed that MIC president and CEO Rafael Consing, a distinguished investment banker, has proposed competitive salaries for himself and other technical positions.

While these salaries are anticipated to be higher than average, they are necessary to recruit individuals with the expertise required for managing a sovereign wealth fund.

The proposition of P2.5 million per month for Consing, if true, is justified when considering the need for specialized skills and experience.

Comparatively, BSP Governor Eli Remolona Jr., who topped the list of highest-paid government executives last year, received a net pay of P35.48 million annually, including various allowances and bonuses. Such figures highlight the reality that top-level financial management roles command substantial compensation.

The real bottleneck lies in the bureaucratic red tape and a hint of crab mentality that stifles progress. Behind closed doors, government officials have expressed concerns about justifying these salaries to the public before the MIC has proven its worth.

Yet, this cautious approach overlooks the necessity of investing in human capital to ensure the fund's success.

MIC’s endeavor to finalize its interim staffing pattern (ISP) has faced challenges due to the initial salary proposal being rejected. The Governance Commission for GOCCs (GCG) awaits a revised ISP, which will undergo rigorous scrutiny before approval by President Marcos.

Budget Secretary Amenah Pangandaman emphasized that the compensation structure aims to balance market competitiveness with long-term sustainability.

Ultimately, the MIC is navigating the complexities of transitioning from private sector efficiency to public sector accountability. While this process is understandably frustrating, it is crucial to adhere to stringent documentation and compliance standards given the fund’s contentious origins.

In conclusion, the arguments against MIC’s salary structure lack the understanding that competitive remuneration is vital for attracting the caliber of talent needed to manage the country’s sovereign wealth fund.

Learning from global precedents like Norway, it is clear that investing in top talent through fair compensation is a necessary step toward ensuring the success and growth of MIC.