N.P. Narvekar, head of Harvard Management Co., scored a pay package of $9.25 million in his first full year spearheading an overhaul of the university’s ailing $39 billion endowment.
The compensation for 2017 included $2.75 million that the school agreed to pay Narvekar to reimburse him for compensation he forfeited when his job overseeing Columbia University’s investment office ended in 2016, Harvard Management said in a release Friday.
Harvard, the world’s richest school, has drawn criticism because it pays investment staffers more than peers while generating mediocre returns. The school hired Narvekar to overhaul the investment office, including changing compensation by tying bonuses to overall performance instead of the asset class in which staffers specialize. Narvekar also slashed headcount and shifted away from making direct investments in real estate and using hedge fund strategies in-house.
Amid the changes, Harvard’s performance has trailed peers. Less than a year into Narvekar’s tenure, the university reported a 8.1% gain on June 30, 2017, which was more than four percentage points below the industry average for endowments. Last June, Harvard reported a 10% return for the year, beating the industry average but still trailing most of its Ivy peers.
“The turnaround of HMC is a multi-year undertaking and the board of directors was impressed by the progress Narv made in his first year to position the endowment for future success,” Paul Finnegan, chairman of Harvard Management’s board, said in the release.
Stephen Blyth, Narvekar’s predecessor as chief executive officer, got $14.9 million in 2015, his one full year on the job. By contrast, Yale University investing chief David Swensen, who has produced top returns for decades, was paid more than $4 million in 2016.
Narvekar, who spent 14 years running Columbia’s investment office, wasn’t the highest paid investment professional at Harvard Management in 2017. Daniel Cummings, the former head of real estate who left at the beginning of last year for Bain Capital, got $10 million. The year prior, Cummings was paid $23.8 million, reflecting bonuses he accumulated as the portfolio he oversaw outperformed other asset classes at the endowment.
The other highest-paid people at Boston-based Harvard Management in 2017 were:
– Michele Toscani, a former managing director who left two years ago to co-found hedge fund TPRV Capital, received $5.46 million.
– Bob Ettl, the outgoing chief operating officer, received $5.25 million.
– Adam Goldstein, who joined from Columbia after Narvekar was hired, got $5.24 million.
– Carlos Saravia, another former Columbia investment office staffer, earned $5.22 million.
Harvard discloses compensation for some top executives in annual tax filings to the Internal Revenue Service, which nonprofits must make available to the public.