Home ListingAugust 5, 2013

CalSTRS Ups Salary for Vacant Deputy CIO Role

CIO Chris Ailman wants “a true second in charge,” and the fund’s board has approved a salary commensurate with that.

Reported by Featured Author

(August 5, 2013) – The California State Teachers’ Retirement System (CalSTRS) has been without a deputy chief investment officer since January, and has used the opening to elevate the role.

The board unanimously approved a salary range of $272,000 to $408,000 for the successful candidate during its August 1 meeting.

The deputy CIO will also receive incentive compensation tied foremost to the performance of public asset classes, and secondarily to the fund’s performance overall.

“I’d like whoever fills this position at the outset to really focus on the public asset classes,” CalSTRS CIO Chris Ailman said via teleconference during the meeting. “I think the key way to do this is the incentive. That way, they’re really focused on creating alpha.”

Over time, Ailman said he expected the deputy CIO’s incentive weighting to rebalance away from public asset classes to whole-fund performance.

CalSTRS’ former Deputy CIO John Petzold departed in January after roughly two-and-a-half years in the role. The fund has used the time since then to restructure the investment staff organization chart, elevating the deputy role in pay and importance.

After Petzold stepped down, “Chris Ailman wanted to look at evaluating the structure of the organization and establish a true second in charge for the investment branch,” COO Cassandra Lichnock said during the meeting. “It was important the we establish a distinct pay structure for this position because using an investment director classification disincentivizes internal candidates from applying.”

During the same meeting, CalSTRS board cleared investment directors to earn between $262,000 and $392,000, and approved a CIO salary range of $408,000 to $612,000.

Ailman said he would prefer a deputy CIO salary range “that was a little bit of a larger spread” above the investment director role. “But,” he said, “I can certainly live with it.”