Chief executive officers at Canada's biggest pension funds saw their pay change marginally last year despite some of their public-market investments experiencing losses due to rising inflation and higher interest rates.
The modest changes at most of the largest pension funds are a result of compensation philosophy that emphasize long-term performance of the funds, which is typically measured over five years.
Some funds did not meet their benchmark target for fiscal 2022, but they still increased the pay of their top executives, while others reported single-digit decreases in compensation.
Seven Canadian public pensions break down their senior executive compensation policies in their annual reports, despite not being legally required to do so. Most CEOs and three to five additional executives receive compensation, while highly-paid investment managers below the executive level are not included in the company's financial disclosures.
With $233 billion in assets, British Columbia Investment Management Corp. reported the highest pay increase for its CEO, with Gordon Fyfe receiving $5.04 million in the latest fiscal year, up 23 per cent from $4.1 million a year earlier. Fyfe's long-term incentives rose from $1.43-million in 2021 to $2.14-million in 2022, and he received an annual bonus of $1.92-million, up from $1.77-million in 2021.
BCI posted a revenue of 3.5 per cent in the fiscal year ended March 31, beating its internal benchmark of 0.3 per cent.
BCI has updated its compensation policy so executives with 'excellent performance' would be around the top 25 percent in the industry in terms of pay.
Its long-term incentives are based on five- and 10-year returns. The pension manager reported a year-on-year annualized return of 8.5 per cent, compared to a benchmark of 7.2 per cent.
The CEO of the Canada Pension Plan Investment Board, which has $570-billion in assets, saw his total compensation increase by a modest 0.5 percent to $5.38-million in the past fiscal year. Of that, $670,822 was salary.
CPPIB generated 1.3 per cent of profits in the fiscal year, which beat its internal benchmark.
CPPIB is based on a five-year return, looking at both the absolute number and the amount by which it beats its benchmark.
The Ontario Municipal Employees Retirement System, with $124 billion in assets, paid CEO Blake Hutcheson $5.16-million last year, up 0.4 percent from $5.14-million in 2021. OMERS had a return of 4.2 percent in 2022, less than its benchmark of 7.2 percent.
OMERS also uses five-year average performance for compensation. Hutcheson's annual and long-term incentive pay dipped slightly to $4.4 million. His base salary can be attributed to an increase in his base salary, to $600,000 in 2022 from $565,000 in 2021.
CEOs of public pensions have an unquestionably substantial salary, but they still receive lesser pay than private-sector peers. The median pay package at 100 of the largest Canadian corporations listed on the Toronto Stock Exchange, surveyed by The Globe and Mail and consulting firm Global Governance Advisors, was $8.6 million in 2022.
Some pension fund CEOs faced small cutbacks in their paycheques last year.
The Ontario Teachers' Pension Plan, which manages $247-billion in assets, reduced CEO Jo Taylor's total compensation from $5.6 million in 2022 to $5.16-million from $5.6 million in 2021.
Caisse de dépôt et placement du Québec, which manages $402 billion in assets, has cut CEO Charles Emond's compensation to $4.21-million, a 4.9-per-cent decrease, after recording a loss of 5.6 per cent in the fund's latest fiscal year.
In their first year of employment, employees saw robust paycheques from their bosses.
The Public Sector Pension Investment Board, with $244 billion in assets under management, paid CEO Deborah Orida $ 8.63 million in the latest fiscal year. She assumed leadership on Sept. 1, 2022, almost half a year into the plan's fiscal year.
A $1.5 million'special cash grant' and a $150,000 relocation allowance are part of the pay package.
Alberta Investment Management Corp., which manages $158 billion in assets, paid CEO Evan Siddall, $4.96 million. When he joined AIMCo in July, 2021, he made $1.33 million in his first year of work.
The Healthcare of Ontario Pension Plan doesn't provide any compensation for its CEOs.