Does Chief Investment Officer Pay Reflect Performance? Evidence from Non-profits

Binfarè, Matteo; Harris, Robert S.

doi:10.2139/ssrn.3504212

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Does the Structure Of Cio Compensation Impact Performance?1

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2021

2023

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Cited by 3 publications

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“…We include plan size and CIO tenure in the regression as it is well-known that CIOs with longer tenures and those working for larger plans earn higher compensation (Binfare and Harris, 2020).…”

Section: Does the Structure Of Cio Compensation Impact Performance?mentioning

confidence: 99%

Paying for Performance in Public Pension Plans

Mullally

Ray

2023

Management Science

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We examine the relation between public pension plan chief investment officer (CIO) compensation and plans’ investment performance. Higher paid CIOs outperform their counterparts by 47–60 basis points per year, largely through increased and superior investment in private equity and real estate. This outperformance generates an additional $74.91–$95.63 million in economic value. Plans offering higher compensation hire better educated CIOs and are more likely to retain their CIOs. Higher CIO compensation is positively correlated with the use of incentive compensation, but incentive compensation does not directly affect performance. Demand- and supply-side frictions help explain the variation in CIO pay and the persistent low compensation paid by some plans despite the positive relation between compensation and performance. This paper was accepted by Victoria Ivashina, finance.

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Section: Does the Structure Of Cio Compensation Impact Performance?mentioning

confidence: 99%