For overseeing the California Public Employees’ Retirement System’s $20 billion in alternative investments, Richard Hayes earned $400,000 in salary and bonus over the past year. That’s a king’s ransom in relatively low-cost Sacramento, where the U.S.'s biggest pension fund is based. But it’s low by private sector standards; CalPERS’s compensation has, after all, historically been constrained by state civil-service limits. So when Hayes got a chance to go for the green, he leaped. This month the 38-year-old joins Oak Hill Capital Management, the Fort Worth, Texas, investment company formed 20 years ago by billionaire Robert Bass. Hayes will stay in Sacramento as president and CEO of a new subsidiary managing alternative investments. Oak Hill isn’t disclosing Hayes’s compensation, but CalPERS issued a report last year showing that its senior investment professionals ranked in the bottom decile when compared with their private sector peers.
Hayes, a former AT&T Wireless executive who joined CalPERS in 1998, isn’t the first pension manager to seek riches elsewhere. But for Hayes, it’s about more than fair market value. Although he declined to be interviewed by II, he has been upfront about his need to support his ten-year-old son, Ryan, who is autistic and whose financial aid from the state has been cut back. According to meeting transcripts, Hayes told the board of $162 billion-in-assets CalPERS last month: “We’re facing the prospect of trying to figure out how you take care of this little boy -- next year he’s going to fourth grade amidst all the odds against it -- and we’re not going to give up. So we’re going to continue funding him ourselves.”
