FROM: Stacey Barnier, Director of HR and Risk Management
SUBJECT: Incentive Compensation for Investment Officers
RECOMMENDATION:
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Approve the addition of Incentive Compensation for Investment Officers; and adopt Resolution No. 2022-2: Approval of the Implementation of San Bernardino County Employees' Retirement Association Investment Staff Incentive Awards and Designation of Employees
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BACKGROUND:
At its April 2, 2015 meeting, the Board approved the Incentive Compensation Plan which included the Chief Investment Officer (CIO) and Senior Investment Officer (SIO) positions as eligible for this compensation. As SBCERA's Investment program has grown in size, stature, and complexity, we must ensure that we can recruit and retain top talent for the Investment team. With historically tight labor markets, recruiters are actively pulling out top talent from pension systems and new job applicants often have multiple offers to consider. Many investment professionals are attracted to or accustomed to a partial variable pay-for-performance model such as our Incentive Compensation Plan.
The structure for the Investment team has changed with the departure of a Senior Investment Officer in June 2020; at that time, we underfilled the vacancy with an Investment Officer. At this time, staff recommends that the Board consider adopting the Incentive Compensation Plan for the Investment Officer incumbents, Jacob Abbott and Thomas Kim. The Investment Officers at SBCERA are critical to the process of evaluating new investment opportunities, managers and co-investment opportunities; they are critical to the ongoing evaluation and management of SBCERA's portfolio and regularly contribute to the asset allocation strategy adopted annually by the Board. Currently, the two investment officers have primary responsibility for $2.8 and $4.9 Billion in investments, over 8 and 10 manager relationships, respectively. Staff believes that with the way the work is st...
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