(Bloomberg) — The head of the world’s largest investor of retirement savings just got a 64 percent pay rise.
Japan’s Government Pension Investment Fund will increase total annual compensation of its president to about 31 million yen ($260,000), including salary, bonuses and allowances, according to calculations by Shinichiro Mori, a director at the fund’s planning section. That compares with 18.9 million yen previously slated for the year ending March 31, Mori said by phone. The pay increase is effective this month, he said.
Boosting pay may help the pension fund hire more money managers from the private sector as it shifts more of its $1.1 trillion from bonds to riskier assets. Even after the increase, the GPIF’s top executive will be paid almost 40 percent less than his counterpart at the California Public Employees’ RetirementSystem, the largest U.S. public pension.
“Compared with global standards and given the responsibility as the top asset manager, the amount still isn’t that big,” said Tetsuya Sakabe, managing director at recruitment adviser Kanae Associates Ltd. in Tokyo. “But it’s positive to see that they’ve improved the compensation structure and the amount is reasonable enough to avoid incurring criticism from the public.”
Current GPIF President Takahiro Mitani, a former Bank of Japan official, has indicated he will step down when his five-year term finishes in March.
The fund’s chief investment officer, a new role created after it changed its strategy to seek higher returns, will be paid about 30 million yen annually, Mori said. Hiromichi Mizuno, a former partner of London-based private-equity firm Coller Capital Ltd., became its first CIO this month.