TEACHERS RETIREMENT BOARD. COMPENSATION COMMITTEE Item Number: 2

Transcription

1 TEACHERS RETIREMENT BOARD COMPENSATION COMMITTEE Item Number: 2 SUBJECT: Approval of Minutes of the April 6, 2016, Compensation Committee Open Session CONSENT: ATTACHMENT(S): 0 ACTION: DATE OF MEETING: June 9, 2016 INFORMATION: PROPOSED MINUTES Compensation Committee April 6, 2016 OPEN SESSION LOCATION: Sacramento River Room and American River Room, 100 Waterfront Place, West Sacramento, CA COMMITTEE MEMBERS PRESENT Harry Keiley, Chairperson Dana Dillon, Vice Chairperson Sharon Hendricks Nora Vargas Eraina Ortega, representing the Director of Finance, Michael Cohen OTHER BOARD MEMBERS PRESENT Paul Rosenstiel Eric Lawyer, representing the State Treasurer, John Chiang Lynn Paquin, representing the State Controller, Betty Yee STAFF PRESENT Jack Ehnes, Chief Executive Officer Christopher Ailman, Chief Investment Officer Brian J. Bartow, General Counsel Lisa Blatnick, Chief of Administrative Services Ashish Jain, Chief Technology Officer Cassandra Lichnock, Chief Operating Officer Robin Madsen, Chief Financial Officer Andrew Roth, Benefits and Services Executive Officer Melissa Norcia, Director of Human Resources Heidi Raveling, Counsel COMP3 1

2 OTHERS PRESENT Harvey Leiderman, Reed Smith, LLP (Fiduciary Counsel) Luis Navas, Global Governance Advisors Bill Gentry, Grant Thornton Eric Gonzaga, Grant Thornton Adam Burnett, McLagan Partners Michael Oak, McLagan Partners Jennifer Baker, CTA Christine Balentine, CTA Denise Bradford, CTA Ed Foglia, CTA/NEA-Retired Pat Geyer, CalRTA Phyllis Hall, CTA Rose Luna, CTA Jill Rice, CFT Loretta Toggenburger, UTLA-Retired Paula H. Weiss, CalRTA Eric Young, UTLA-Active A quorum being present, Chairperson Keiley called the Open Session meeting of the Compensation Committee to order at 1:13 p.m. I. APPROVAL OF COMMITTEE AGENDA / WORK PLAN (Item 1) MOTION duly made by, seconded by, and carried to approve the Committee Agenda. Mr. Rosenstiel joined the meeting at 1:19 p.m. II. INTERVIEWS AND SELECTION OF PRIMARY COMPENSATION STRATEGIST (Item 2) The committee received presentations from and questioned three finalists selected from the compensation consultant pool established through the Request for Proposal solicitations process, to select the primary compensation strategist and consultant to the committee. The committee received a presentation from the incumbent consultant, Mr. Navas from Global Governance Advisors. The committee recessed at 1:52 p.m. and reconvened at 2:12 p.m. The committee received a presentation from Mr. Gentry and Mr. Gonzaga, from Grant Thornton. The committee recessed at 2:49 p.m. and reconvened at 3:09 p.m. COMP4 2

3 The committee received a presentation from Mr. Burnett and Mr. Oak, from McLagan Partners. The committee discussed the presentations and evaluated the qualifications of each of the firms. MOTION duly made by, seconded by, and carried to retain Global Governance Advisors as primary compensation consultant for a contract period of five years beginning July 1, The committee recessed at 3:58 p.m. and reconvened at 4:17 p.m. III. REAL ESTATE PERFORMANCE MEASURE (Item 3) The committee considered a presentation from Ms. Norcia requesting the committee adopt new Real Estate incentive criteria for incentive compensation to more accurately align investment staff performance with investment objectives. MOTION duly made by, seconded by, and carried to adopt new Real Estate incentive criteria as outlined in Townsend s memo and as delineated in the Real Estate Incentive Compensation Evaluation Attachment 2 effective for the plan year. IV. GRADED-IN FORMULA (Item 4) The committee received a presentation from Ms. Norcia requesting committee authorization to discontinue the graded-in formula for incentives for investments staff. The committee clarified the incentive structure before and during use of the graded-in formula. The committee heard from Mr. Ailman about the negative impact the graded-in formula has had on recruitment and further discussed the need to provide fair compensation for investment staff. COMP5 3

4 MOTION duly made by, seconded by, and carried to discontinue the graded-in incentive formula. Chairperson Keiley V. EVALUATION OF DELEGATION OF AUTHORITY (Item 5) The committee received a presentation from Ms. Norcia concerning the delegation of authority for parts of the compensation policy to the Chief Executive Officer. The committee requested additional analysis of the proposed delegation revisions and for staff to prepare a recommendation. VI. APPROVAL OF MINUTES FOR THE NOVEMBER 5, 2015 COMPENSATION COMMITTEE MEETING OPEN SESSION (Item 6) MOTION duly made by, seconded by, and carried to approve the minutes of the November 5, 2015 Compensation Committee. VII. COMMITTEE WORK PLAN INPUT FOR FY (Item 7) The committee provided input on the FY Work Plan. VIII. CEO COMPENSATION STRUCTURE (Item 8) Mr. Ehnes excused himself from the meeting for this item. The committee received an analysis of labor market data for the position of Chief Executive Officer (CEO) from Mr. Oak. The committee discussed the analysis and clarified that the data presented did not include pension benefits, either from defined benefit or defined contribution plans, for any of the CEOs included in the analysis. I. REVIEW INFORMATION REQUESTS (Item 9) Pursuant to Item 5, the committee requested further analysis of the proposed delegation revisions and a recommendation.. DRAFT AGENDA FOR NET COMMITTEE MEETING (Item 10) The committee agreed to move the next Compensation Committee meeting to June COMP6 4

5 I. II. OPPORTUNITY FOR ADDITIONAL STATEMENTS FROM THE PUBLIC There were no statements from the public. ADJOURNMENT There being no further business to conduct, Chairperson Keiley adjourned the Compensation Committee meeting at 5:12 p.m. Harry Keiley, Chairperson Jack Ehnes, Chief Executive Officer And Secretary to the Teachers Retirement Board Prepared by: Heidi Raveling, Counsel COMP7 5