Alaska to review compensation amid raft of departures

Alaska Permanent Fund Corporation is reviewing its compensation structure after experiencing a large number of departures over the past two years.

At a special meeting held last week, the sovereign wealth fund’s management recommended the board launch a salary review by an independent consultant to help Alaska better define its peer group to create a more competitive compensation structure.

“It seems that people come to APFC, we train them up, they acquire highly marketable skills and they are snatched away by our peers for significantly higher pay,” said acting executive director and CFO Val Mertz.

The system also is receiving “dramatically fewer” applications for vacancies than was the case in the past, Metz added. Most applicants don’t meet minimum qualifications and are targeting salaries “well above what we are prepared to offer”.

The sovereign wealth fund has lost 43 staffers since 2017, including 13 from its investment team, said director of HR Chad Brown. Many of these investment professionals had gone on to make two or three times more at their next job.

A key departure from the investment team was head of alternative investments Stephen Moseley, who joined Wafra in New York to work on an LP co-investment product, PEI reported in June. Brown described his departure as a “big loss”.

Alaska Permanent last conducted a review of its compensation programme in 2018. The review by consultant McLagan concluded that it should introduce an incentive scheme to better retain talent. Without one, its total cash compensation was 19 percent below that of its public fund peer group and 53 percent below the private sector.

Alaska finally put an incentive scheme in place for its investment staff in the budget for the 2022 fiscal year. Metz recommended that board members actively engage in the third-party review to produce an outcome that the board “can get behind”.

Alaska Permanent has $81.3 billion in assets under management, $15.3 billion of which is in private equity, according to PEI data. It is a significant investor for GPs such as Hellman & Friedman, Insight Partners, Index Ventures and Clearlake Capital Group.

Article updated to reflect correct name of Alaska’s head of HR