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

60 Pages Posted: 1 Jan 2020 Last revised: 12 May 2020

See all articles by Matteo Binfarè

Matteo Binfarè

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Robert S. Harris

University of Virginia - Darden School of Business

Date Written: 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.

Keywords: Bonus, CIO, Compensation, Endowment, Nonprofit, Performance

JEL Classification: G23, J24, J31, J33, J44

Suggested Citation

Binfarè, Matteo and Harris, Robert S., Does Chief Investment Officer Pay Reflect Performance? Evidence from Non-profits (December 15, 2019). 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

Matteo Binfarè (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Robert S. Harris

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4823 (Phone)
434-924-4859 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/harris.htm

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