State of Wisconsin Investment Board, Madison, approved $13.8 million in staff incentive awards based on generating $1.2 billion in investments earnings above market returns and net of costs over the past five years, said Vicki Hearing, spokeswoman.
SWIB, which oversees a total of $108.6 billion, bases most of the program on the five-year return of the Wisconsin Retirement System’s $92.3 billion core fund, whose diversified allocation includes domestic and international equities, fixed income, real estate, private equity and hedge funds.
The core fund’s five-year annualized return as of Dec. 31 was 8.1%, above its 7.7% policy benchmark.
“At a time when many public pension funds are struggling with issues related to underfunding, the WRS remains among the few that are financially strong,” said Michael Williamson, SWIB executive director, in a news release. “One key reason is the investment management provided by SWIB.” The pension fund was 99.7% funded as of Dec. 31, 2015, according to its most recent annual report.
SWIB has a staff of 163, which breaks down to 75 investment management staffers that receive the bulk of the awards, and 88 investment services staff, including in trading, accounting and technology, which also share in the incentive payments, Ms. Hearing said.
Individual bonuses were not disclosed.
The annual incentive awards were established in 2000 through a compensation restructuring in order to increase staff retention, and Ms. Hearing said since that restructuring, the investment management staff has not had any non-retirement turnover.
The board, along with McLagan, SWIB’s performance award consulting firm and a unit of Aon PLC, reviews the program annually.