Financial Plan - Cornell University Division of Budget & Planning

U.S. Senate Response (continued)11f ) Please explain what relationship, if any, existsbetween endowment size and/or growth and the compensationgiven to the college or university presidentand the endowment manager.Response:There is no direct relationship between Cornell University’sendowment size and/or growth and the compensationprovided to Cornell’s president. The president’s compensationis established and maintained by the Board of Trustees.They take into consideration the incumbent’s qualificationsand performance towards pre-established institutional goals,within a market-competitive range. That range is defined bypresidential compensation among peer institutions and considersbroad scope data including undergraduate enrollment,graduate enrollment, annual operating budget, annual researchbudget, advanced degree graduates, faculty headcount,staff headcount and endowment size. The current and formerpresidents’ compensation arrangements do not provide anyopportunity for earned incentive payments in relation to anyaspect of the role’s responsibilities.In 2006, Cornell implemented a compensation plan for itsChief Investment Officer (CIO). The CIO’s compensation isestablished and maintained considering incumbent qualificationsand performance within a market-competitive range.That range is defined by compensation received by top investmentofficers employed at peer institutions having a similarlysized and similarly managed endowment.Under the plan implemented in 2006:• The CIO’s compensation consists of a base salary and theopportunity to earn incentive pay based on a combination ofquantitative investment performance results and the accomplishmentof established annual qualitative performance goals.• Investment performance returns are evaluated in relationshipto standard investment industry benchmarks. The quantitativeincentive component of the CIO’s pay is based on the fund’sperformance as compared to pre-established industry benchmarks;it is not calculated on the fund’s aggregate growth.11g) Please list what endowment-related bonuses, if any,either the college or university president or the investmentmanager has received year-by-year for the lastten years.Response:The current CIO was hired in 2006 and has not yet receivedany incentive payments based on entity performance. The firstopportunity for such incentive is anticipated to occur basedupon 2008 entity performance. Former incumbents employedin the CIO role from 1997 to 2006 did not receive any incentivepayments based upon the performance of the endowment.88