Yale Has $26 Billion Socked Away Thanks to This $5 Million Manby
Chief investment officer’s 2014 compensation was $5.1 million
The $26 billion fund is a top performer in higher education
As the head of Yale University’s endowment, David Swensen earned $5.1 million in 2014, trailing counterparts at rival schools even as his fund outperformed them.
Swensen’s 44 percent increase in compensation included a $2.3 million bonus, deferred pay and benefits, according to the school’s most recently available tax filing. Swensen, 62, oversees a staff of about 50 people and an endowment that is consistently among the top performers in higher education.
Colleges are paying their endowment managers more because of the increasing complexity of the job and the need to attract talent from Wall Street, where pay is even higher. Many endowment managers could go work for big banks, according to Korn Ferry’s Stephen Trachtenberg.
“Much like big-time university football and basketball coaches, if they win, they get the money,” said Trachtenberg, a consultant at the executive recruiting firm and president emeritus of George Washington University. “Nobody will ever criticize people in the private investment world if they deliver performance.”
Bloomberg News has requested tax filings that include compensation data from schools with the largest endowments this month following the Internal Revenue Service deadline for tax-exempt organizations to report the information. The total compensation figures are from 2014 university tax filings known as 990s, and some numbers may include deferred compensation that was reported in previous years and paid out in 2014.
At $26 billion, Yale has the second-largest college endowment, behind only Harvard University, which has $37.6 billion in assets. Swensen has overseen the fund since 1985, and in the five years through June 30 has produced an annual average investment return of 14 percent, according to data compiled by Bloomberg.
Swensen’s counterparts at other top-performing schools had increases in their pay packages. Nirmal Narvekar, who has overseen Columbia University’s $10 billion endowment since 2002, had a 20 percent increase in his compensation to $7.2 million, which included salary, bonus, benefits and deferred compensation. The Ivy League school had a five-year average annual return of 12.3 percent through last June.
The compensation package for Scott Malpass, the University of Notre Dame’s investing chief since 1986, rose 12 percent to $5.3 million, also topping Swensen. Princeton University’s Andrew Golden had compensation of $4.6 million. Both trailed Yale in investment returns in the five years.
The package for Seth Alexander at the Massachusetts Institute of Technology was $1.6 million despite almost matching Yale and topping others with a 13.8 percent average gain over five years.
Harvard, which employs five times as many people at its endowment as Yale and others, stood apart, paying former investing chief Jane Mendillo $13.8 million. Mendillo, who retired at the end of 2014, got a $12.5 million bonus that reflected the fiscal year ended in June of that year and her final six months on the job, according to a person familiar with the matter.
Mendillo was succeeded last year by Stephen Blyth, who was paid $8.3 million as head of internal trading at Harvard in 2014. Harvard has lagged rivals, with a five-year average return of 10.5 percent, and Blyth has vowed to overhaul operations. Harvard said Monday that Blyth is taking an unspecified temporary medical leave and Robert Ettl, the fund’s chief operating officer, is the interim CEO.
Spokesmen for Yale, Harvard, Princeton, MIT, Notre Dame and Columbia declined to comment or didn’t respond to requests for comment on compensation.