CalPERS’ board at its Sept. 18 meeting awarded CEO Marcie Frost a fiscal year 2025 base salary of $601,398, up 4% from last year, and a fiscal year 2024 incentive compensation award of $667,320, a 246% increase.
Frost’s base salary for fiscal year 2024 was $578,267 and her fiscal year 2023 incentive compensation award was $192,682. No further information was available because the talent committee, which recommended the compensation package, deliberated in closed session.
The increase in incentive compensation for fiscal year 2024 was the result of the board in April 2023 revising the incentive opportunity ranges for most covered executive and investment management positions based on market compensation benchmarking data and the compensation consultant's recommendation, said John G.B. Myers, CalPERS spokesman. The CEO's annual incentive range specifically changed to zero-50% of base salary from zero-40%, he said.
By comparison, the Cassandra Lichnock, CEO of the $344.9 billion California State Teachers' Retirement System, West Sacramento, had a maximum incentive award of 150% of base salary in fiscal year 2023. Lichnock received a fiscal year 2023 incentive award of $574,011. The CalSTRS board is scheduled to approve its CEO's annual incentive compensation award for fiscal year 2024 at its Sept. 25 meeting.
Separately, the board at the same meeting decided to retain its 6.8% discount rate since the asset-liability management process for the $519.9 billion California Public Employees’ Retirement System, Sacramento, is scheduled to start in 2025. The board was able to make that decision because in April, the board had discontinued a policy that automatically reduced the pension fund's expected investment return and its strategic asset allocation when actual investment returns outperformed the expected investment return by at least 2 percentage points.
The pension fund returned 9.3% for the fiscal year ended June 30, exceeding its assumed rate of return by 2.5 percentage points.
