Bloomberg News

Calpers Bonus Pay Rose 33% to $4.4 Million as Equities Surged

October 08, 2011

Oct. 8 (Bloomberg) -- The California Public Employees’ Retirement System, the largest U.S. public pension, paid its investment officers $4.4 million in performance bonuses last year, a 33 percent increase from the previous year.

The $218 billion pension system gave bonuses of $100,000 or more to 16 employees, led by a $212,063 award to Tom McDonagh, a senior portfolio manager in the fixed-income section, according to data released under a public-records request. McDonagh’s award was pro-rated for 14.5 months in his position, the records showed.

Calpers earned 20.7 percent in the year ended June 30, its best performance in 14 years, as stocks and private-equity holdings rebounded from losses in 2008 and 2009. Bonuses are based on investment performance over a three-year period. Last year, Calpers handed out $3.3 million in performance awards, according to data it released.

“It’s important to note that the Calpers board cut salary increases for eligible staff in half, recognizing the current fiscal environment,” said Brad Pacheco, a pension spokesman, in an e-mail message.

Performance awards went to 53 employees whose normal salaries totaled $11,029,312, the records showed.

McDonagh didn’t work for the pension system in 2009, so his bonus wasn’t depressed by Calpers’s losses that year, Pacheco said. McDonagh didn’t respond to a request for comment made through Pacheco.

“Certainly we’re not in the doom-and-gloom we were in, in 2009,” Girard Miller, a PFM Group senior strategist for retirement finance and public-sector investments, said in a telephone interview. The PFM Group is a Philadelphia-based provider of financial-investment advisory services.

“There’s always a great deal of scrutiny and criticism of the compensation for public-sector investment professionals,” said Miller, who is based in Los Angeles. “Bonuses for public- sector investment professionals are justified. They need to be performance-based.”

--Editors: Pete Young, Ted Bunker

To contact the reporter on this story: James Nash in Sacramento, California at jnash24@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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