A small group of Harvard University alumni is protesting the multimillion-dollar bonuses paid to the money managers of the university’s endowment, which has lost more than $8 billion since the end of the last fiscal year.
The five highest-paid executives at Harvard Management Co., which oversees the endowment investments, earned between $3.9 million and $6.4 million each – made up mostly of bonuses – for their performances during the last fiscal year, according to a university announcement last month. During that time, the Harvard endowment earned 8.6 percent. In comparison, college endowments lost an average of 3 percent in that period, according to an industry survey released this week.
There was a loss last year but in comparison to the hits the market took it appears that the fund managers’ return was very favorable.*
But amid the current financial crisis in the economy, executive bonuses are under intense scrutiny.
Last month Andrew Cuomo, New York’s attorney general urged Merrill Lynch to withhold a reported $10 million bonus for CEO John Thain. Cuomo’s intent was to ensure that executives of financial institutions asking for and receiving government bailout funds, not receive bonuses.
Goldman Sachs decided to withhold executive bonuses and was lauded by Cuomo as a positive role model.
What do you think?
Accountability…sour grapes…reality check ???
* source: Harvard Management Company filings
** MetWest Scene Update February 21, 2009 – How Harvard Superstars Crashed/Forbes.com
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