Beating its own benchmark returns has paid off handsomely for most employees of the Wisconsin state pension fund.
Pension fund managers and those who work directly with the state’s investments will receive bonuses totaling nearly $14 million this year, the highest total ever, as a reward for strong returns, the State of Wisconsin Investment Board (SWIB) announced on April 21.
The bonuses are awarded based on investment performance above market returns over the past five years, according to the state pension board. It also said that in 2016, the fund beat its one-, three- and five-year performance benchmarks, and over the past five years, investment returns added $1.2 billion to the retirement system.
The $13.8 million in bonuses was approved for 152 of 163 board employees, and were greater than the $11.1 million paid out in 2016. Fifty-one employees — a third of those who got bonuses — received $100,000 or more, while 11 people failed to receive bonuses because they did not qualify or their job performance was below expectations, said board spokeswoman Vicki Hearing. The 2017 bonuses were $500,000 more than the previous record high of $13.3 million paid out in 2014.
Several employees received bonuses worth nearly twice their base salary. Michael Williamson, the board’s executive director, received the highest bonus at $520,000. Chuck Carpenter, a managing director, was second highest at nearly $550,770. His annual salary is $291,500. David Villa, chief investment officer, was third highest at $582,489. Todd Ludgate, another managing director, received $541,221 and his 2016 salary was $236,000.
In 2016, the diversified “Core Fund,” posted an 8.5% return, while the higher risk “Variable Fund” posted a 10.6% return.
The board manages more than $104 billion in assets, most of which is in the 600,000+-participant Wisconsin Retirement System
In a statement, Executive Director Michael Williamson said “SWIB operates in a highly competitive industry and seeks to hire and retain talented professionals, then compensates them based on their ability to meet aggressive targets and add value to the trust funds.”
According to the Pew Charitable Trust, Wisconsin was one of only15 states to have a positive net amortization as a percentage of covered payroll of about 4.75% in 2014.
Editor’s note: A previous version of this story contained numbers that were not updated.