Texas investment pros given room for bigger bonuses

The chief investment officer and senior investment professionals at the $88 billion Teacher Retirement System of Texas can earn up to 125 per cent of their base salary in performance compensation, under a new version of the fund’s pay rules.

All investment staff have the potential to earn performance compensation, capped at various points on a continuum from 5 to 125 per cent according to their job level, made up of a combination of investment and qualitative performance.

In March, as reported by www.top1000funds.com, the chief investment officer, Britt Harris, voluntarily forewent an estimated $167,935 in performance incentive pay for 2008 due to the underperformance of the fund.

Now under the new updated performance compensation plan, the CIO and other investment staff will have their incentive pay determined by three elements: investment performance against a predetermined benchmark, investment performance measured against a peer group of public sector funds, and a qualitative performance element.

The quantitative element of the CIO’s performance is measured against that of the total fund and individual sectors across public and private markets.

The qualitative performance component includes performance in a variety of contributions and behaviours defined as being essential for organisational success.

The new performance criteria will be measured on an annual basis, and were set in October.