HMC Officials Earn Record Compensation

Officials at Harvard Management Company (HMC) received record compensation last year for leading Harvard's endowment to an above average performance.

Continuing a trend of rapidly escalating compensation packages at HMC, six officials earned at least $800,000 from salaries, bonuses and contributions to benefit plans in fiscal 1993, according to returns recently filed with the Internal Revenue Service.

HMC earned a return of 16.7 Percent last year, better than the previous year's 11.8 percent, but still not spectacular compared to other university endowments. Yale, for example, earned a 17.3 percent return and has outperformed Harvard for five straight and eight of the last ten years.

HMC Vice-president Jon Jacobson, equity and portfolio manager, was the highest paid University official last year with total compensation of $1,282,545. His earnings made him the second highest paid HMC official ever and marked a huge 66 percent increase from his $770,814 earnings in 1992.

Jacobson was closely followed by the previousearnings leader, Dave Mittelman, senior vicepresident and director of fixed income investment.Mittelman was the only top HMC official to see hissalary decline, albeit minutely. Mittelman tookhome $1,215,898, down from his $1,237,874 of lastyear.

HMC President Jack R. Meyer, the company'sthird highest paid officer, saw his pay continueon an upward spiral, as it rose 30 percent from$739,000 to $962,213.

To put the salaries in perspective, PresidentNeil L. Rudenstine earns slightly more than$200,000.

Meyer had no comment on the reason for therising salaries or on any issue relating to HMC'sperformance. Other highly paid HMC employees couldnot be reached for comment.

Upon his arrival at HMC, Meyer restructured thecompensation system in response to complaints thatsalaries were too high.

But some have said that the new system enablesHMC to make itself appear to be doing artificiallywell.

Compared with others of the 10 largestuniversity endowments in the country Harvard hasnot done particularly well in the last decade.

According to a comparison of average returns onthe 10 largest university endowments from1983-1992, as reported in the Wall Street Journal,Harvard paid the highest price for its investmentmanagement and received a below average return of14.9 percent.

Harvard's endowment was outperformed byPrinceton, Yale, Stanford and Emory.

At the same time Stanford was the only otherinstitution with a money manager making over$300,000, while Harvard had at least six managersearning over $400,000.

The first HMC employees to break the milliondollar barrier were Scott M. Sperling and MichaelEisenson, managing partners of the high-riskAeneas subsidiary, who earned the record salariesin 1989.

Two years later Aeneas' portfolio was markeddown by 20 percent of its value at the time, or$200 million.

In fiscal 1993 Eisenson earned $795,500 andSperling took home $780,083, significant increasesfrom their 1992 $473,500 earnings. Each alsoreceived $100,000 in benefits contributions.

Rounding out Harvard's Highest paid employeeswas Maurice Samuels, vice president forinternational fixed income portfolio, who earned$820,020; HMC Treasurer Verne Sedlacek, who earned$566,660; and HMC Clerk Michael Thomis, who earned$434,300

Jacobson was closely followed by the previousearnings leader, Dave Mittelman, senior vicepresident and director of fixed income investment.Mittelman was the only top HMC official to see hissalary decline, albeit minutely. Mittelman tookhome $1,215,898, down from his $1,237,874 of lastyear.

HMC President Jack R. Meyer, the company'sthird highest paid officer, saw his pay continueon an upward spiral, as it rose 30 percent from$739,000 to $962,213.

To put the salaries in perspective, PresidentNeil L. Rudenstine earns slightly more than$200,000.

Meyer had no comment on the reason for therising salaries or on any issue relating to HMC'sperformance. Other highly paid HMC employees couldnot be reached for comment.

Upon his arrival at HMC, Meyer restructured thecompensation system in response to complaints thatsalaries were too high.

But some have said that the new system enablesHMC to make itself appear to be doing artificiallywell.

Compared with others of the 10 largestuniversity endowments in the country Harvard hasnot done particularly well in the last decade.

According to a comparison of average returns onthe 10 largest university endowments from1983-1992, as reported in the Wall Street Journal,Harvard paid the highest price for its investmentmanagement and received a below average return of14.9 percent.

Harvard's endowment was outperformed byPrinceton, Yale, Stanford and Emory.

At the same time Stanford was the only otherinstitution with a money manager making over$300,000, while Harvard had at least six managersearning over $400,000.

The first HMC employees to break the milliondollar barrier were Scott M. Sperling and MichaelEisenson, managing partners of the high-riskAeneas subsidiary, who earned the record salariesin 1989.

Two years later Aeneas' portfolio was markeddown by 20 percent of its value at the time, or$200 million.

In fiscal 1993 Eisenson earned $795,500 andSperling took home $780,083, significant increasesfrom their 1992 $473,500 earnings. Each alsoreceived $100,000 in benefits contributions.

Rounding out Harvard's Highest paid employeeswas Maurice Samuels, vice president forinternational fixed income portfolio, who earned$820,020; HMC Treasurer Verne Sedlacek, who earned$566,660; and HMC Clerk Michael Thomis, who earned$434,300