(May 17, 2014) — Harvard University paid $28.8 million in compensation to Harvard Management Company (HMC)’s top five managers in 2012, almost a 9% jump from the previous year, according to its tax returns.
For the calendar year, Andrew Wiltshire, head of alternative assets for the $32.7 billion endowment, earned the highest total compensation of $7.9 million, up from $6.6 million in 2011.
Alvaro Aguirre-Simunovic, who manages HMC’s natural resources, received the next highest pay of $6.6 million. Stephen Blyth, head of public markets, was reported to have made $5.3 million.
Harvard Management chief Jane Mendillo’s salary, on the other hand, shrank. In 2012, the university reported Mendillo’s total compensation as $4.8 million, down from $5.3 million in 2011.
Daniel Cummings, the endowment’s real-estate portfolio manager, was the fifth highest paid manager, with a total compensation of $4.2 million in 2012.
According to the university, HMC provides a base salary and a bonus compensation based on managers’ performance.
“Those variable awards depend on producing investment returns in excess of market benchmarks for the specific category of assets, and sustaining that performance over time: subsequent underperformance results in variable compensation being ‘clawed back’,” Harvard Magazine reported.
James Rothenberg, Harvard’s treasurer and chair of HMC’s board of directors, said the pay structure had been beneficial to the endowment’s performance.
“This compensation system is designed to closely align the interests of the University with its investment professionals,” he said in a statement. “HMC’s market-beating performance in the reporting period once again added value to the resources upon which Harvard depends to fulfill its teaching and research mission.”
The endowment’s investment gains were flat in 2012 but saw returns of 11.3% in the fiscal year 2013, pushing its total assets to $32.7 billion.
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