Harvard portfolio managers' pay drops
By Robert Weisman, The Boston Globe, 22 December 2005
Dec. 22--Harvard Management Co., which invests the university's giant $25.9 billion endowment, paid its
top six investment professionals a total of $56.8 million for the year ending June 30, a 27.6 percent drop
from the $78.4 million earned by the group in the prior year.
The smaller payouts reflected a slightly lower endowment return in the university's fiscal year 2005, and
the holding back of portions of departing executives' bonuses that were based on incentives for future
performance, said James F. Rothenberg, the treasurer of Harvard University and chairman of the Harvard
Harvard's top-paid money managers again were David R. Mittleman and Maurice Samuels. Mittleman
pulled in salary and benefits of $18 million for fiscal 2005, down from $25.4 million a year earlier, while
Samuels pocketed $16.9 million, down from $25.3 million.
It was the final year at the endowment for five of the six executives who, led by former Harvard
Management president Jack Meyer, left in September to form Convexity Capital, a private hedge fund that
will manage up to $500 million of Harvard's assets. Meyer's paycheck was $6 million last year, down from
$7.2 million a year before.
Harvard's endowment earned a return of 19.2 percent for fiscal 2005, higher than the 15.8 percent median
return of the nation's 25 largest university endowments, but less than the 21 percent return for Harvard's
endowment in 2004. "Last year's performance was impressive, and we're pleased with it," said Al Powell, a
Harvard spokesman who noted that the endowment's return fluctuates from year to year.
Compensation for Harvard's endowment managers includes a base salary and performance bonuses based
on measurements for the asset class they manage. The payouts have been a lightning rod for critics,
including some Harvard alumni who have objected to money managers' earning more than the university's
president and faculty members at a time when student tuition has been rising rapidly.
"This is inappropriate, unnecessary, and contrary to the values of a great university," Virginia author and