The Canadian Pension Plan pays its people handsomely, despite poor performance
Private equity recruits the best of the best. The best analysts from the best investment banks; the best students from the best schools. But not all private equity firms were made equal: some are Canadian.
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Results published by the Canadian Pension Plan Investment Board for its fiscal year 2025, ending March 2025, illustrate the scale of compensation available even to those distinctly average who want to work in the industry.
In recent years, the CPP hasn’t performed very well at all. Overall, it returned 9.3% in 2024. Its public equities investments returned 10.6%, while the S&P returned 16.9%. Its private equity portfolio had a 10% target, but returned just 9.6% in 2024.
Despite the poor performance, the CPP’s board were impressively well-paid. President, CEO, and 17-year veteran John Graham was paid US$3.7m, of which $1.5m was immediate (salary and non-deferred bonuses) and $2.1m deferred.
Head of Europe and former BNP director Maximilian Biagosch – a region of the world in which CPP’s investments returned just 8.8% - received a US$3.26m pay package, with both the highest base salary ($539k) and highest non-deferred bonus ($1.2m) of the entire board.
The most egregious example is probably in APAC. There, CPP’s local head and former Citadel portfolio manager Agus Tandiono, who has responsibility for 21% of CPP’s assets, was paid a handsome $2.74m for his performance. Just $1.1m of that was deferred at all. CPP’s 2024 return in APAC was 7.3%, below the rest of the company.
The APAC and European performances weren’t a case of unfortunate sailors caught in geopolitical storms, either. Over the last five years, they’ve delivered average returns of 6.2% and 6.6%, respectively: not only well below CPP’s overall average (9.0% across that period), but also below the fund’s 10.9% benchmark.
The implication, therefore, is that if you’re not a particularly good private equity professional, you can be well-rewarded by taking care of Canadian pensioners’ money. Probably not as well-rewarded as you would be if you stayed in private equity, given the impact of carried interest – but are you good enough for that, anyway?
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