CalSTRS awards PE staff $130k in bonuses

The $146bn retirement system awarded nearly $1.8m in bonuses to its investment staff after posting its highest returns in 25 years.

The California Teachers’ Retirement System has awarded its private equity staff almost $130,000 in bonuses, according to an incentive compensation disclosure.

The private equity fund delivered a 22.5 percent return for the 2010-2011 fiscal year, beating its benchmark by 1.8 percent, according to a statement. The $146 billion retirement system had a 14.3 percent allocation to private equity at the close of the fiscal year.

Private equity investment director Margot Wirth received the largest bonus among the 11 listed members of the private equity staff, earning $29,250, a 15 percent premium on her annual salary. Wirth’s incentive pay can reach as high as 75 percent of her salary, according to the disclosure.

CalSTRS posted a 23.1 percent return on in its investments this fiscal year, its highest return in 25 years, according to a statement. The retirement system awarded around $1.8 million in bonuses to its executives, directors, portfolio managers and investment staff; an amount calculated as being 0.18 percent of the value added through specific investment decisions made by staff over the course of the year, according to the disclosure.

Chief executive officer Jack Ehnes and chief investment officer Christopher Ailman received the largest bonuses among staff, earning $149,940 and $139,500 respectively.

A spokesman for CalSTRS could not be reached for comment.

In CalSTRS 2011-2012 business plan, the retirement system indicated that it plans to improve and expand its co-investment capabilities over the current fiscal year, as well as work with managers on creating separate accounts as a way to reduce fees. CalSTRS current private equity portfolio is dominated by limited partnership commitments, which comprise 94 percent of the portfolio, according to pension documents.

A previous version of this story mistakenly suggested the overall bonus pool allocated to CalSTRS staff was $1.8bn, rather than million. PEI apologises for this error.