Alaska Permanent Fund Corp. to boost pay for investment manager

$200,000 to $300,000 not enough, CEO says

Posted: Friday, July 04, 2008

The Alaska Permanent Fund Corp. has determined that a salary of between $200,000 and $300,000 may not be enough to attract a new chief investment officer to help manage the $37 billion fund.

The corporation's current CIO, Rich Shafer, who makes $215,000, is leaving. Executive Director Mike Burns said Alaska needs to pay more to attract top investment talent.

"We're aware the salary structure is not going to be adequate for a successful recruitment," Burns told the corporation's board of trustees at a Thursday meeting.

Burns, who makes $267,000 himself, asked the trustees to approve paying the CIO more.

He also asked them to remove a permanent fund policy that limits corporation salaries to less than that of the executive director.

Burns said the policy was out of date.

"It's not in sync with what is going on in the marketplace today," he said.

Board chairman Steve Frank said he was "reluctantly willing" to increase the salary range.

"We must have a qualified individual, obviously," he said.

At the same time, Frank said he wanted to make sure they were not distorting the salary relationship with other state agencies, such as the Department of Revenue's Treasury Division, which manages a $14 billion retirement account.

Frank said he had no objection if someone else at the corporation was paid more than Burns, however.

"I don't think there is anything magical about having the executive director being the highest paid person," he said.

The board of trustees unanimously agreed, and gave Burns the flexibility both to pay more than he can now, and pay someone more than he is making.

Burns said he was confident they'd be able to recruit a top investment professional to replace Shafer.

Burns said he has already received about 15 applications for the position and expects more strong candidates based on inquiries the fund's outside investment managers have been getting about Alaska.

"There's a lot of talk about it in the marketplace," Burns said.

Companies such as Goldman Sachs, Dodge & Cox and T. Rowe Price, which manage hundreds of millions each on behalf of Alaska, are getting inquires from investments professionals who are interested in Alaska, he said.

Others have been contacting Alaska directly, he said. One wanted to know if he could remain living in New York and do the job, but was told that would not be acceptable.

The CIO manages a staff of 11 investment professionals and 47 outside managers.

The application deadline is July 11.

Clarification

Alaska Permanent Fund Corp. officials in the process of hiring a new chief investment officer say they expect to pay between $200,000 and $300,000, not more than that, as was reported in Friday's Empire.

That's above the previous pay range, with a maximum amount of $244,000, said Laura Achee, corporation spokeswoman.

Mike Burns, the corporation's executive director, had already begun telling applicants of the higher pay range prior to board of trustees approval on Thursday, leading to the confusion.

The board removed the maximum amount limitation and also removed a requirement that the CIO be paid less than Burns, who is paid $267,000, according to Achee.

• Contact reporter Pat Forgey at patrick.forgey@juneauempire.com.



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