Corporate chief financial officers traditionally are the best paid executives in the plan sponsor arena, but chief investment officers aren't far behind, according to a Pensions & Investments survey.
While CFOs on the corporate level made more than their CIO counterparts, the tables were turned in the government, union, and endowment areas.
The survey polled 412 executives about their base salaries, bonuses and incentives, the types of plans they oversee and their overall responsibilities.
Of those surveyed, 62% were pension fund managers, 19% were chief investment officers, 12% were treasurers, and 7% were chief financial officers. The majority of respondents -- 50% -- were working with corporate funds, followed by 27% with government plans, 15% with union plans, 2% with foundations and 6% with endowments.
The highest annual total salary recorded in survey was that of a chief investment officer earning $740,000, compared with the second highest salary, $500,000, earned by a CFO.
CIOs working at endowment funds are earning more than their CFO counterparts, both in base salary and total compensation. The average endowment chief investment officer earned $230,429 a year, while a corporate CIO earned an average $195,554.
Talent at premium
The discrepancy doesn't surprise executive recruiters, for whom finding good talent at the right price is a challenge.
"There are a few instances where people at an endowment or foundation are very well compensated," said Richard S. Lannamann, managing director of Russell Reynolds Associates, New York.
The compensation frequently is competitive with what is offered by corporate plan sponsors, he said.
Corporate chief financial officers earned more, on average, than other executives surveyed -- $289,000 a year -- followed by foundation CFOs, with $250,000, and then endowment CFOs, with $147,140. Treasurers' earnings were better at endowments than at other types of funds, averaging $178,429 a year, followed by the corporate average of $158,190.
Pension managers tended to earn more at corporations, with total compensation averaging $118,632 a year. Next on the pay scale in that title were those at foundations, earning an average $105,931 a year; which bettered the foundation treasurer's average of $95,000.
Pay for union fund officials was in the middle of their peers' ranges, with the highest salaries going to chief investment officers, earning an average of $109,286 a year, and treasurers, $108,333.
A correlation existed between the level of compensation and the size of the plan. Counter-intuitively, CFOs and CIOs at midsized plans earned more than they did at larger plans, according to the survey; and treasurers at small plans earned slightly more than their counterparts at larger plans.
CFOs managing more than $1 billion earned an average total salary of $133,200, while their counterparts at midsized plans earned $244,700.
And while the average total compensation for chief investment officers managing more than $1 billion in assets was about $1,500 less than the total salary earned by CIOs managing between $250 million and $999.9 million in assets, the base salaries between the two positions varied widely. CIOs at large plans earned $125,291 a year on average, while their counterparts at midsized plans earned $144,929.
Experience also was a key to compensation, and most plan sponsors included in the survey have been in the industry for some time. Overall, 19% of respondents reported having more than 20 years of experience; 35% had between 11 and 19 years' experience, 26% had between five and 10 years in the business; and only 21% had been in the industry for less than five years.
Not surprisingly, the more experienced professionals earned higher salaries. The biggest pay gap was between CFOs with less than 10 years' experience, earning an average total salary of $139,758, and CFOs with more than 20 years of experience, who received $265,175.
Wide regional differences also existed, particularly between the Northeast and the South. According to the survey, CFOs in the Northeast earned an average $262,500 a year, while in the South, CFOs made $147,200. The highest salary reported for a Southern CFO was $260,000.
Mr. Lannamann and other recruiters think the Northeast offers a premium to the plan sponsor community.
"It's a tough recruiting climate today," said Jim Schroeder, an associate at Crist Partners, Chicago. The major obstacle to recruiting is trying to convince people to relocate, he said.
About 52% of respondents said they have received some form of a bonus -- 41% of CFOs, 67% of treasurers, 49% of pension managers and 55% of chief investment officer.
The survey revealed a number of ways in which plan sponsor bonuses were determined. Most bonuses were linked to company profitability, and treasurers' bonuses in particular, at 37%. Investment performance also was used as a criteria, with 11% of CIOs reporting it as a factor in their bonuses. Other determining factors were meeting company goals and personal goals; overall job performance; company sales; and individual achievement.
In addition to cash perks, executives reported being rewarded with equity ownership. Treasurers led the pack, with 37% reporting having a vested interest in the company. Only 26% of CFOs had an equity stake, while 19% of pension managers and 15% of chief investment officers did.
One executive responded, "I have $2.2 million at stake."
A total of 28% of executives had stock options, 2% had direct equity ownership and 5% had restricted stock grants.
Bonuses always are good news, but less encouraging is the gender gap that was still firmly in place --only 22% of the executives surveyed were female. Of the women surveyed, about 10% were chief financial officers, 18% were treasurers, 25% pension managers and 16% were chief investment officers.
"In all of our assignments, there is gender sensitivity," said Mr. Schroeder.
Gender gap remains
The gap also was reflected in compensation, with male CIOs earning an average base salary of $129,837 a year, while their female counterparts earned $97,232. For CFOs, men earned $164,478 a year on average, and women with the same job title earned $139,500.
Pension managers also experienced an earnings gap, even though the highest percentage of women in survey -- 26% -- were a part of this group. Their male colleagues earned an average $94,503 a year, while the women earned $68,148.
Respondents also indicated executives sharing a title did not necessarily share the same duties.
All treasurers reported being responsible for overseeing all investments and investment managers, while 91% of CIOs, 83% of CFOs and 78% of pension managers reported performing that function.
Not surprisingly, 57% of CIOs spent between 76% and 100% of their time on "investment matters." And 52% of CFOs, 53% of treasurers and 40% of pension managers reported spending less than 25% of their time on investments.
Of the respondents overall, 93% were responsible for defined benefit plans, 62% for defined contribution plans, 8% for cash balance plans, 12% for foundations and 8% for endowments.