Corporate Moves
Salary Highs
The tougher investment climate dampened raises, but many chief investment officers earned their compensations.
Reported by Jeff Ostrowski
Art by James Yang
Chief investment officers of universities, foundations and museums received robust raises in 2015, according to a compensation analysis by CIO magazine. The 50 highest-paid CIOs of nonprofits made an average of $2.3 million, up 24% from the average compensation of $1.87 million paid to the same CIOs the previous year.
The former CEO at Harvard Management Co., Jane Mendillo, led the way. She was paid $13.8 million covering fiscal 2014 and half of fiscal 2015. Harvard did not break out the separate years.
Mendillo’s second successor came in second on the list. He made $7.2 million in the year ended June 30, 2015, as CIO at Columbia University.
CIO magazine based its Top 50 list on an analysis of the latest publicly available tax returns filed by more than 250 large nonprofit organizations. Because of inconsistencies in the way nonprofits report their financial results, comparing them can be an inexact science. Most nonprofits have fiscal years that end June 30, but others’ years end at other dates throughout the calendar.
Most of the compensation figures on our list are for the year that ended June 30, 2015, but lags in filing the tax returns mean the most recent information available for some nonprofits is for a fiscal year that ended at some point in 2014.
CIO pay is typically based on a three-year rolling average of returns, and many endowments were performing well for the period covered by our survey. However, a tougher investment climate recently has dampened raises.
“This year, it’s been kind of flat,” said Elizabeth Havens, an executive recruiter at David Barrett Partners who specializes in CIOs.
The Ivy League dominates the Top 50 list, with Harvard, Columbia, Yale and Princeton taking four of the top five spots.
The ranking shows that many private universities place a premium on their CIOs, in some cases paying them more than anyone else on campus.
Notre Dame’s CIO might not be a household name, but he makes more than the head of the school’s vaunted football program. Football coach Brian Kelly made $1.6 million in the year that ended June 30, 2015, compared to his $5.4 million.
At Northwestern University, the CIO also outearns the football coach. Its CIO brought in $4.4 million in the year that ended Aug. 31, 2015, topping football coach Pat Fitzgerald’s $3.3 million.
In some cases, though, a CIO is no match for a legendary coach. At Duke University, the CIO’s $3.2 million compensation package was eclipsed by hoops coach Mike Krzyzewski’s $5.5 million pay.
Top 50 Nonprofit CIO Salaries
| 1 | Harvard Management* | $13,812,651 |
| 2 | Columbia University | $7,221,568 |
| 3 | University of Notre Dame | $5,356,285 |
| 4 | Yale University | $5,135,725 |
| 5 | Princeton University Investment Co. | $4,564,367 |
| 6 | Northwestern University | $4,402,601 |
| 7 | Memorial Sloan-Kettering Cancer Center | $3,656,391 |
| 8 | Duke University | $3,193,681 |
| 9 | University of Virginia Investment Mgmt Co. | $3,163,355 |
| 10 | Howard Hughes Medical Institute | $2,972,812 |
| 11 | University of Chicago | $2,767,874 |
| 12 | Stanford University | $2,591,856 |
| 13 | Vanderbilt University | $2,504,392 |
| 14 | Moore Foundation | $2,453,561 |
| 15 | Packard Foundation | $2,414,403 |
| 16 | Thrivent Financial | $2,396,592 |
| 17 | Hewlett Foundation | $2,353,086 |
| 18 | Kresge Foundation | $2,006,623 |
| 19 | University of Richmond | $1,919,683 |
| 20 | Johns Hopkins University | $1,672,327 |
| 21 | John D. & Catherine T. MacArthur Foundation | $1,619,994 |
| 22 | Texas Christian University | $1,619,361 |
| 23 | Ford Foundation | $1,613,138 |
| 24 | Massachusetts Institute of Technology | $1,607,182 |
| 25 | Rockefeller Foundation | $1,519,696 |
| 26 | Emory University | $1,513,288 |
| 27 | New York Presbyterian Fund | $1,512,162 |
| 28 | Metropolitan Museum of Art | $1,509,247 |
| 29 | Tulane University | $1,449,000 |
| 30 | Museum of Modern Art | $1,424,660 |
| 31 | Casey Family Programs | $1,322,402 |
| 32 | Bowdoin College | $1,309,924 |
| 33 | Williams College | $1,294,298 |
| 34 | J. Paul Getty Trust | $1,280,740 |
| 35 | Rockefeller University | $1,271,637 |
| 36 | University of Pennsylvania | $1,268,587 |
| 37 | Wake Forest University | $1,253,928 |
| 38 | University of Southern California | $1,236,838 |
| 39 | Brown University | $1,232,443 |
| 40 | Wellesley College | $1,216,659 |
| 41 | Dartmouth | $1,199,866 |
| 42 | Rice University | $1,132,117 |
| 43 | Cornell | $1,121,676 |
| 44 | Mount Sinai Medical Center | $1,119,802 |
| 45 | Conrad N. Hilton Foundation | $1,106,644 |
| 46 | Carnegie Corp. | $1,028,235 |
| 47 | UAW Retiree Medical Benefits Trust | $1,023,486 |
| 48 | Tufts University | $1,012,914 |
| 49 | Boston University | $980,837 |
| 50 | Robert Wood Johnson | $967,654 |
*This salary is based on 12 months of fiscal 2014 and six months of 2015.
Cracking the Top 50 back then required compensation of $589,577. Now, a CIO needs to make more than $967,000 to make the Top 50.
“CIOs do get compensated quite generously, but they also manage large amounts of money,” Havens said. “And a good portion of their compensation is based on performance, so they will only make that much money if they perform.”
Demand for CIOs outpaces supply, an imbalance that creates upward pressure on compensation, said Deb Brown of Russell Reynolds Associates. There’s also a “move premium” that rewards chief investment officers who switch organizations.
“You tend to pay your new CIO more than you paid your former CIO,” Brown said.
Nonprofits also compete with the private sector, which typically pays more. CIOs at endowments could earn more at hedge funds or family offices, but they choose to sacrifice compensation for the sense of mission that goes along with working at a nonprofit.
Jim Dunn, the former CIO at Wake Forest University, took a large pay cut when he left the private sector to run the endowment. Dunn said he was motivated by the altruism of the job: If he successfully navigated markets, the private school could offer more scholarships to deserving students.
“You work at an endowment because you believe in the mission,” Dunn said.
Nonprofit CIOs are constantly recruited to join the private sector, and some do. Dunn now runs Verger Capital in Winston-Salem, N.C. In another move to the private sector, John Powers in 2015 left his position as head of Stanford University’s endowment to join Credit Suisse Group AG.
Our Top 50 list includes the usual suspects of prestigious universities, large foundations and big-name museums, and also a few surprises. For instance, the University of Richmond’s CIO ranked 19th, with compensation totaling $1.9 million, while Bowdoin College’s CIO placed 32nd. CIOs at better-known, big-city schools such as CalTech, Georgetown University, New York University and Boston College finished outside the Top 50.
In some cases, the highly compensated CIOs outperformed their peers by wide margins. For instance, Princeton University’s endowment jumped 12.7% for the year ending June 30, 2015, while Yale’s endowment rose 11.5% and Bowdoin College’s investments increased 14.4%.
The average return for Ivy League endowments during fiscal 2015 was 7.8%, according to data compiled by Bloomberg. In a separate survey of more than 800 colleges and universities, the NACUBO-Commonfund Study of Endowments found the average return was just 2.4% for the year ended June 30, 2015. But things are looking up. According to data from Wilshire Trust Universe, endowments of all sizes gained a median of 4.4% since Dec. 31. CIO
Comparing Salaries: CIO versus Athletic Coaches
Average Return for Ivy League Endowments versus
Other Colleges/Universites
The average return for Ivy League endowments during fiscal 2015 was7.8%, according to data compiled by Bloomberg. In a separate surveyof more than 800 colleges and universities, the NACUBO-CommonfundStudy of Endowments found the average return was just 2.4% for theyear ended June 30, 2015.
Highly Compensated CIOs Outperform
In some cases, the highly compensated CIOs outperformed theirpeers by wide margins. For instance, Princeton University’sendowment jumped 12.7% for the year ending June 30, 2015,while Yale’s endowment rose 11.5%t and Bowdoin College’sinvestments increased 14.4%.
