Public pension funds are way ahead of corporate plans in hiring minorities to manage the investment of their assets , but on average they pay their chief investment officers significantly less than their corporate counterparts, according to this month,s Pensionforum.
Nearly 20 percent of respondents from public funds say their CIO is a member of a minority; just 12.5 percent of corporate plans say the same.
Not surprisingly, only 12.9 percent of corporate plan CIOs make less than $100,000 a year, and 19.4 percent make more than $200,000. Public plan CIOs don,t fare nearly as well: 34 percent make less than $100,000, and a mere 1.9 percent make more than $200,000. Private sector CIOs also received a larger percentage of their compensation from bonuses compared to their public plan brethren.
For the most part, there has been little turnover among CIOs at both public and corporate plans: 41.2 percent of respondents have employed the same person in the role for the past ten years. A little more than 7 percent of plans have employed four or more CIOs in the same time period.
CIOs may be relieved to learn that most of their colleagues escape the indignity of being fired: Just 2 percent of respondents say they terminated their last CIO. When many CIOs leave their jobs, they hit the golf course: 28.3 percent of respondents say the last CIO to leave did so to retire.
The average CIO appears to have a wealth of experience from which to draw: 65.5 percent of respondents say their CIOs have more than ten years’ experience working with pension funds. The remaining 34.5 percent have been at it a year or more. And only 10.7 percent claim less than three years’ experience.
How long has the person with the job of chief investment officer for your pension fund been employed in that position?
Less than a year 7.1%
One to three years 24.7
Four to five years 18.8
Six to ten years 16.5
More than ten years 32.9
How many people have been employed in that position over the past ten years?
One 41.2%
Two 36.5
Three 15.3
Four or more 7.1
How many years of total experience does this manager have working, in some capacity, with pension funds?
Less than a year 0.0%
One to three years 10.7
Four to five years 4.8
Six to ten years 19.0
More than ten years 65.5
If yours is a corporate fund, what is the manager’s total compensation?
Less than $60,000 3.2%
Between $60,000 and $100,000 9.7
Between $100,000 and $125,000 32.3
Between $125,000 and $200,000 35.5
More than $200,000 19.4
What percentage of that total was in bonuses last year?
Less than 5 percent 14.3%
5 to 10 percent 14.3
11 to 25 percent 31.4
None 40.0
If yours is a public fund, how much is the manager’s compensation?
Less than $60,000 1.9%
Between $60,000 and $100,000 32.1
Between $100,000 and $125,000 30.2
Between $125,000 and $200,000 34.0
More than $200,000 1.9
What percentage of that total was in bonuses last year?
Less than 5 percent 9.3%
5 to 10 percent 5.6
11 to 25 percent 3.7
None 81.5
What academic qualifications does the manager have?
Bachelor’s degree in business or economics 56.0%
Bachelor’s degree in another subject 14.3
Master of business administration 48.8
Certified financial analyst 26.2
None of the above 4.8
If yours is a corporate fund, is the manager a member of a minority group?
Yes 12.5%
No 87.5
If yours is a public fund, is the manager a member of a minority group?
Yes 19.6%
No 80.4
What, if any, other duties does this manager have?
Benefits administration 15.0%
401(k) plan administration 12.5%
Treasury functions (i.e., treasurer) 26.3
All financial matters (i.e., chief financial officer) 25.0
All corporate matters (i.e., chief executive officer) 8.8
None 37.5
Has any chief investment officer left in the past five years?
Yes 32.5%
No 67.5
Was this last manager fired?
Yes 2.0%
No 98.0
Where did the last manager go?
To another fund, same position 19.6%
To a higher position within organization 19.6
Became a money manager 10.9
Became a consultant 4.3
Moved to a new career 17.4
Retired 28.3
The results of Pensionforum are based on quarterly surveys of a universe of 800 corporate and 250 public pension plan sponsors. Because of rounding, responses may not total 100 percent.
