Price is what you pay. Value is what you get. — Warren Buffett

What do chief investment officers earn at nonprofit institutions? We recruit these executives for a living, so we avidly track their pay and performance. In this letter, we highlight the compensation of fifty chief investment officers and investment heads at private US foundations.

Many nonprofits, family offices, and Wall Street firms employ top investment professionals, but it’s difficult to extract meaningful data on compensation from reluctant sources. Ergo, we go with what we can get.

In this comp report we’re going with a revealing data set from our good friend John Seitz, CEO of FoundationMark. We wrote about Mr. Seitz in last month’s newsletter on “Foundation Investment Performance,” and we think his research and rankings are useful companions to our endowment studies, of interest to asset owners and all purveyors of investment products and services.

The Bigger the Better

Nonprofit investors wear many hats but have essentially one metric by which they are judged, long-term performance. However, that does not seem to be the metric for how they are paid. When it comes to compensation, size matters.

A few years ago, we ran some correlations using our archival datasets to see how pay correlated to AUM, tenure, and performance at endowments.

The coefficient for AUM to comp was 0.69, which is moderately high. But tenure and performance did not appear to have much impact on CIO pay. In most cases, size trumps all other metrics.

Our correlations

Comp-vs- AUM:  0.69

Comp-vs-Tenure: 0.31

Comp-vs-5yr Returns: 0.27

Kevin Hallock, President, University of Richmond, an expert in the field of executive compensation, and author of “Pay: Why People Earn What They Earn and What You Can Do Now to Make More,” puts it this way:

It doesn’t matter whether company size is measured as assets, market value, sales, revenue, or number of employees — bigger firms pay more … way more.

We can isolate the impact of all kinds of other characteristics (e.g., industry, return on assets, profitability, research and development expense, etc.) and even use complicated statistical techniques to remove the influence of “unmeasurable” characteristics, and the size-to-pay link remains intact.

Here’s the bottom line. Be it Wall Street, Main Street or nonprofit institutions – the bigger the assets, the better your chances at making more money.

Dry, Dense, and Detailed

The IRS uses 990 filings for tax computations and foundations must swear to the accuracy of the data “under penalty of perjury.” Fortunately for us, all the numbers in our table below are publicly available in the filings as long as you are patient and willing to dig for them.

Foundations have a hodgepodge of fiscal year-ends, and many are excruciatingly slow to file the IRS forms no matter what their fiscal year. There can be a long time-lag, usually a year or more before the data is publicly available.

One last caution. 990s data is generally consistent but not always clear. If you see a figure that you know is off and have an explanation we can publish, let us know. We’re happy to revise and send out an update.


We like to publish clear tables with easy-to-read data. To spare the eyes and keep tables legible, we’ve added together the compensation, benefits, and expense numbers for each head of investments and filing year. In all but a few cases, the benefits and expenses run ten to twenty percent of listed compensation.

There are exceptions. For Jim Williams at the Getty, Scott Taylor at the Mellon, and Robert Manilla at Kresge, the benefits plus expenses were more than half their listed compensation for the most recent filing year. And for Jay Flaherty at the Mott, they were about one third of his comp.

As for any breakout reveals of base and bonus – and insights as to how bonuses and investment performance relate – they just aren’t there folks. Most foundations don’t disclose detailed comp breakdowns and they don’t have to. And, of course, we can only publish pay and performance from public sources, not what we might have been told in private. 

Enough said. Now on to our feature presentation.  (Click link for PDF with comp chart)

 — Charles Skorina

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