Harvard University, Cambridge, Mass., isn’t letting underperformance get in the way of top pay.
Ten of the 25 highest-paid U.S. endowment executives at the richest private universities worked for Harvard Management Co. in 2012, the most recent year available, according to data compiled by Bloomberg. Harvard also paid senior managers at its $32.7 billion fund more than what leaders of peer endowments made, even as its investment results trailed the others.
“The cost of managing money through HMC is a fraction of the expense of equivalent external management,” Christine Heenan, a Harvard spokeswoman, said in an e-mail. “This has saved Harvard over $1 billion in management fees over the past decade.”
A review of the most recent tax filings of more than 20 of the richest private colleges shows how Harvard stands apart when it comes to asset management. It gave the head of its endowment less compensation than senior staff overseeing non-traditional investments such as hedge funds and natural resources. At every other institution, the chief investment officer or an equivalent position drew the most pay.
Harvard has the biggest endowment by far in terms of assets and staff — with about 200 people including support staff. Yale University, New Haven, Conn., has the second-largest endowment, at about $21 billion, and employs fewer than 30 investment professionals, according to its website.
Harvard paid more than $44 million to 10 executives at the management company in 2012, according to regulatory filings. Andrew Wiltshire, a managing director and head of alternative assets, got $7.9 million in total compensation, making him the highest paid of all endowment managers surveyed. Alvaro Aguirre-Simunovic, managing director of natural resources, got $6.6 million, the second most. Yale paid the top two investment executives named in its filing a total of $5.3 million.
Jane Mendillo, Harvard Management’s CEO who announced last month she will resign at the end of the year, received total compensation of $4.8 million, the fourth most at Harvard, and down from $5.3 million in 2011.
The highest-paid endowment head among the more than 20 institutions reviewed was Nirmal Narvekar, New York-based Columbia University’s president of investment management, who made $5.6 million in 2012, tax filings show. Columbia’s endowment has $8.2 billion in assets.
Ms. Mendillo was the second-highest paid fund leader, followed by University of Notre Dame’s Scott Malpass at $4.3 million, Princeton University’s Andrew Golden at $3.9 million and Stanford University’s John Powers at $3.6 million. Notre Dame’s endowment has $9.2 billion in assets; Princeton’s, $18.2 billion; and Stanford’s, $18.7 billion.