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With pay raise, state pension chief’s salary hits nearly $500,000

The state Pension Reserves Investment Management board also approved an additional $197,381 bonus for Michael Trotsky, who doubles as the agency’s chief investment officer.
The state Pension Reserves Investment Management board also approved an additional $197,381 bonus for Michael Trotsky, who doubles as the agency’s chief investment officer.

The director of the agency overseeing the state’s $72 billion pension fund has scored another pay raise, pushing the base salary of the state’s already highest-compensated quasipublic official to $495,000 a year.

The $25,000 pay hike — unanimously approved last month by the state Pension Reserves Investment Management board — amounts to a 5.3 percent bump from Michael G. Trotsky’s previous $470,000 salary. The board also approved an additional $197,381 bonus for Trotsky, who doubles as the agency’s chief investment officer.

The raise, which went into effect Dec. 1, marks Trotsky’s fourth major increase in as many years, following hikes of $40,000 in 2017 and $35,000 in each of the previous two years. His total compensation in 2017 fell just shy of $619,000, the highest among all officials at quasipublic agencies and more than any state employee outside the University of Massachusetts system, according to state payroll records.

Pension board members have lavished praise on Trotsky during his tenure, and emphasized a need to keep his salary competitive with similar public and private sector fund managers. Robert L. Brousseau, who chairs the board’s administration and audit committee, said at the November meeting that the goal is to make sure “we don’t fall behind as we did many years ago” on keeping a competitive salary for the post.

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The bonus is also tied directly to the fund’s performance. Trotsky earlier this year heralded a 9.5 percent net return on investment in fiscal year 2018, exceeding estimates but falling short of the fund’s 12.8 percent net return from 2017.

He said in August that the agency knew “of no other fund our size or larger that outperformed us” during the past fiscal year, and a board spokesman said Wednesday that the fund remains one of the highest performing in the country.

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That’s helped keep Trotsky’s pay on a steady ascent. Named director in 2010, his base salary has more than doubled from his initial $245,000 after eight years — increases officials say they’ve pursued to keep his pay in line with the top end of Trotsky’s industry peers. Working with a compensation consultant, the board has said that salary range reaches as high as $540,000.

The board has also credited Trotsky with ending what they called a cycle of regular turnover within the agency. On a staff of 45, the fund lost just one “senior-level” employee in the last year, according to Trotsky, and that openings now attract hundreds of applicants.

“Certainly, Michael Trotsky could go out and join a private equity firm tomorrow,” state Treasurer Deborah B. Goldberg, who chairs the pension board, said at the November meeting in reference to the allure of the pay elsewhere in the industry.

Goldberg, who won a second four-year term in November, said when she “recommitted to four years, [Trotsky] said he was staying.”

“We have a strategy and agenda moving forward that requires us to build on what we have, not disrupting anything in any way,” she said.

Trotsky’s evaluation was formally discussed by the board in August, during which his performance was described as “A plus” and “outstanding,” according to a transcript of the meeting.

“We’ve seen a complete transformation of the PRIM organization from what we were back in 2010 to what we are today in terms of how we operate, the size of our staff, and the success of the organization,” Brousseau said, adding: “Staff and the board are confident in his leadership.”

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Reach Matt Stout at matt.stout@globe.com. Follow him on Twitter @mattpstout