Harvard Paid Former Endowment Chief $14.9 Million in 2015

  • Blyth left last May after 18 months at $35.7 billion fund
  • New CEO Narvekar will hire outside managers, reduce staff

Harvard Said to Seek Sale of $2.5B in Endowment Assets

Former Harvard University investment chief Stephen Blyth received $14.9 million in 2015, making him one of three highly compensated employees at the endowment who have left the underperforming fund, according to a tax filing Friday.

Blyth, 49, was chief executive officer of Harvard Management Co., the university’s nonprofit investment arm, for about 18 months, before leaving last May for personal reasons. His pay, which includes salary and bonus, was larger than the $11.6 million median compensation in 2015 for a CEO in an S&P 500 company, according to data compiled by Bloomberg.

Stephen Blyth

Stephen Blyth

Photographer: Stephanie Mitchell/Harvard

He was replaced by N.P. ‘Narv’ Narvekar, who’s making sweeping changes to the $35.7 billion endowment that has struggled to rebound in the wake of the 2008 financial crisis. Blyth, who teaches statistics at Harvard, didn’t reply to a message seeking comment on his compensation.

By contrast, Harvard President Drew Faust was paid $1.9 million, according to the filing, more than her $1 million compensation in 2014. Her pay included deferred compensation that had been reported in previous filings and $300,000 that won’t be paid out for several years until it vests.

Harvard is known for paying top dollar to senior staff at the world’s wealthiest university fund. The top six executives and money managers earned a combined $53.5 million in 2015, a 7 percent increase from 2014, according to the filing. 

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Harvard’s endowment gained 5.8 percent in fiscal 2015, outpacing the average 2.4 percent return for all endowments but trailing most of its Ivy League peers. Harvard reported a 2 percent investment loss in fiscal 2016, magnifying a decade of lackluster returns compared with its elite rivals.

“The top people were making Wall Street money for terrible performance,” Charles Skorina, an executive recruiter for endowments and foundations based in San Francisco, said in an interview. “They couldn’t lose.”

Blyth, who was promoted to CEO in January 2015, saw his pay rise 80 percent from the previous year, when he was head of internal trading, despite the lackluster results. Blyth himself complained in an annual report that year that he could see “a steady decline in outperformance over the past 10 years.”

Harvard Management’s total compensation fell in the 12 months through June 2016, to $137 million from $175 million the previous year, according to the filing. Individual compensation figures are for calendar 2015.

New CEO

Narvekar wasn’t listed in the tax filing because he only started working at Harvard Management in December. The former head of Columbia University’s endowment has been guaranteed at least $6 million a year for three years, according to a person familiar with the matter.

He unveiled a new compensation structure in January in which performance bonuses will reflect the overall performance of the endowment instead of individual asset classes.

In addition to Blyth, at least four other employees who have departed or are planning to exit from the endowment were among the highest paid in 2015. Andrew Wiltshire, the former head of alternative assets, received $11.4 million, according to the filing. Portfolio managers Michele Toscani and Graig Fantuzzi, who plan to leave to start their own hedge fund, earned $5.9 million and $4.7 million, respectively. Marco Barrozo, who left in 2015 and started Cambridge Square Capital, received $4.9 million.

Fund Overhaul

Among current staff, chief operating officer Robert Ettl earned $4.8 million in 2014, up from $4.4 million in 2014, according to the filing. Jake Xia, chief risk officer, received $3.3 million, up from $2.6 million the prior year. Kathryn Murtagh, the chief compliance officer, made $1.3 million, up from $1 million.

Narvekar said in January the endowment plans to outsource most of its investment management and cut about half of its 230 staff.

Harvard traditionally has employed more people than other endowments because it has traders investing directly in stock and bond markets, as well as teams investing in other assets such as natural resources. Columbia and other universities parcel out their money to different managers specializing in stocks, bonds, hedge funds, private equity or other asset classes.

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