Does Chief Investment Officer Pay Reflect Performance? Evidence from Non-profits

Sunday December 15, 2019

Abstract

This paper provides the first study of compensation and pay-for-performance for top executives at non-profit endowments. Using a detailed breakdown of compensation from IRS filings over the 2009-2017 period, we find that pay packages of Chief Investment Officers (CIOs) depend more heavily on bonuses than do those for other non-profit executives. As in the for-profit sector, compensation is highly correlated with the size of an organization. Even controlling for size, CIO compensation is significantly positively related to endowment performance. Both compensation levels and the sensitivity of pay to performance vary with a foundation’s financial model, its location and governance policies.

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Citation

Binfarè, M., & Harris, R. S. (2019) Does Chief Investment Officer Pay Reflect Performance? Evidence from Non-profits. Kenan Institute of Private Enterprise Research Paper No. 20-01. Available at SSRN: https://ssrn.com/abstract=3504212 or http://dx.doi.org/10.2139/ssrn.3504212