SAN FRANCISCO — The UC regents on Thursday hired an executive of a Canadian investment fund to be the chief manager of the university system's $82 billion in endowment and pension investments and will pay him more than $1 million a year if he achieves good returns.
Although that pay package triggered little public discussion, the salary for another new executive hire attracted more opposition at the regents meeting here. Some regents opposed the $450,000-a-year salary for Claude Steele, who is becoming UC Berkeley's provost and second-in-command. They complained that the pay is higher than that of some chancellors.
For the new investments chief, Jagdeep S. Bachher, the regents approved a $615,000 base salary and set a maximum total payout of $1.01 million if UC investments perform well. That would be slightly less than the $1.2 million that Marie N. Berggren was paid in 2012, her last year before she retired in July. The compensation comes mainly from investment returns, not tuition or tax revenues, officials said.
Bachher, who is an executive vice president of Alberta Investment Management Corp. in Edmonton and oversees large public sector funds, is to become UC's chief investment officer and vice president of investments April 1.
Regent George Kieffer, who heads the board's compensation committee, said many other large public and private universities pay more for comparable jobs.
"He is worth every penny," Kieffer said.
In addition to his basic package and potential incentive bonuses, Bachher is to receive $184,500 in relocation expenses and hiring bonuses to be paid out over four years. Bachher, 41, is a Canadian citizen with legal U.S. residency.
"I know that working to ensure the health and longevity of the university's financial assets has a direct impact on UC's educational, research and public service mission," Bachher said in a statement. "This is a chance to really make a difference."
Labor unions and other critics decried the high executive compensation.
The pay packages are "troubling for a public institution," said Todd Stenhouse, spokesman for the American Federation of State, County and Municipal Employees Local 3299, which represents UC custodians, food workers and some medical care employees and is in a lengthy contract dispute with UC.
UC President Janet Napolitano, in a statement, praised Bachher's "investment acumen, management expertise, scholarly research and great social skills."
A chief investment officer can play a vital role for a school like UC with such large assets, said Kenneth Redd, director of research and policy analysis at the National Assn. of College and University Business Officers. Investment decisions affect how much money is available for financial aid and faculty hiring and "can have a huge influence in students' lives," he said.
After declines in the 2008 financial collapse, UC investments more recently showed a 10.2% return in the year up to its most recent report on Sept. 30. The retirement plan and employees' retirement savings make up $61 billion of the $82 billion; individual UC campuses have some separate investments.
In the other major decision, Steele's UC pay, while $165,000 below his Stanford salary, will be $80,000 more than his predecessor, Berkeley provost George Breslauer. Steele is a social psychology expert and the dean of Stanford University's Graduate School of Education.
That salary will set a bad precedent, said the two regents who opposed Steele's package, Lt. Gov. Gavin Newsom and Norman Pattiz.
We are a public university with a public trust," Newsom said, adding that he "could not in good conscience support this."
Despite their opposition, Steele's pay level passed by a wide margin.
Steele will receive $135,000 extra for relocation costs and a hiring bonus.
In the past, Gov. Jerry Brown has opposed high salaries for UC and Cal State executives and expressed skepticism about incentive bonuses. His office said he would have no comment.
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