Should Public Pension CEOs Make More than the CA Governor?
Posted on 02/12/2022
Public pension boards across the U.S. are tasked to identify competitive salaries to attract talent to manage their pension plan.
There is always controversy with public officials making extravagant salaries. However, for the financial services and investment industries, top-level investment chiefs usually walk away with huge compensation packages.
Let’s first compare the salaries of elected officials. The Governor of California has a salary of US$ 209,747 per year. The economy of the State of California is the largest in the United States, with a US$ 3 trillion gross state product as of 2020.
The current salary of the CEO of the California Public Employees Retirement System (CalPERS) is US$ 503,000 in salary per year and a total compensation of US$ 775,000 per year. CalPERS hired Global Governance Advisors to do a compensation study. For the executive management positions, the sample included U.S. public funds, large Canadian public funds, select California-based agencies (including large local agencies), banks, and insurance companies. For investment management jobs, the sample utilized large and complex institutional investors, including: U.S. public funds, Canadian public funds, and U.S. corporate plan sponsors. Private sector asset management organizations of comparable size of around US$ 100 billion to US$ 500 billion in AUM were used and that are key competitors for CalPERS team members. Global Governance Advisors considers Total Cash Compensation = Salary + Annual Incentive at Target. Total Compensation = Salary + Annual Incentive at Target + Long-Term Incentive at Target.
C-Suite
| Annual Salary USD | Total Cash Salary USD | Total Compensation USD | ||||
|---|---|---|---|---|---|---|
| Position | CalPERS | Market | CalPERS | Market | CalPERS | Market |
| Chief Executive Officer | 503,000 | 500,000 | 639,000 | 837,000 | 775,000 | 2,148,000 |
| Chief Financial Officer | 290,000 | 327,000 | 368,000 | 553,000 | ||
| General Counsel | 300,000 | 323,000 | 381,000 | 527,000 | ||
| Chief Operations Officer | 250,000 | 340,000 | 318,000 | 637,000 | ||
| Chief Actuary | 258,000 | 320,000 | 328,000 | 526,000 |
Investment Roles
| Annual Salary USD | Total Cash Salary USD | Total Compensation USD | ||||
|---|---|---|---|---|---|---|
| Position | CalPERS | Market | CalPERS | Market | CalPERS | Market |
| Chief Investment Officer | 566,000 | 513,000 | 1,132,000 | 1,750,000 | 1,698,000 | 3,000,000 |
| Deputy CIO | 453,000 | 373,000 | 816,000 | 907,000 | 1,178,000 | 1,450,000 |
| Chief Operating Investment Officer | 328,000 | 315,000 | 492,000 | 702,000 | 656,000 | 893,000 |
| Managing Investment Director | 412,000 | 333,000 | 700,000 | 972,000 | 989,000 | 1,340,000 |
| Investment Director | 321,000 | 278,000 | 482,000 | 642,000 | 642,000 | 867,000 |
| Investment Manager | 244,000 | 203,000 | 342,000 | 413,000 | 439,000 | 439,000 |
| Associate Investment Manager | 146,000 | 164,000 | 185,000 | 268,000 | ||
| 2020 Median Salary U.S. High School Teacher | 62,870 | |||||
| Estimate – GIC Associate, Special Investments | 114,000 | |||||
| Estimate – GIC Senior Vice President Asset Management | 428,000 | |||||
| Estimate – Bridgewater Associates – Senior Investment Associate | 275,543 | 361,461 |
Source: Public Sources, CalPERS Board Documents. Global Governance Advisors
