STRS FLASHBACK - 7 Years Ago - Hey, Lynn, the bonuses were stopped but investment staff didn't 'leave in mass,' did they?

From John Curry, July 16, 2010

And besides that...........where else could one work and get fired for malfeasance or non feasance AND GET A YEAR'S SALARY?

But if the teachers pension fund fires Mitchell for malfeasance or nonfeasance, either wrongdoing or not doing his job, it must pay him a year’s salary at his base pay at the time.
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Sen. Lynn R. Wachtmann, R-Napoleon and chairman of the study council, said he wants to see the incentive program for the investment staff return in some form “sooner rather than later” because he doesn’t want “the investment staff to leave in mass.”

Canton Repository, July 17, 2003

Bonuses adding up for man who steers STRS investments

By PAUL E. KOSTYU Copley Columbus Bureau chief

COLUMBUS — The man who oversees the investment portfolio of the State Teachers Retirement System has a contract that gives him three opportunities each year to increase his total compensation.

Most recently, those three chances brought his total pay up to nearly $285,000.

Stephen A. Mitchell, deputy executive director of investments, is one of two STRS employees who have a contract with the teachers pension fund board. The other is Executive Director Herbert Dyer.

Like Dyer’s contract, Mitchell’s covers multiple years and has a bonus based in part on the bonuses his staff gets.

It also has a buyout clause that pays Mitchell’s even if he’s fired for wrongdoing.

Mitchell’s contract covers Jan. 1, 2001, to March 31, 2005. His initial base salary was $215,000. But he got a $7,525 raise six months later because he gets a raise each July equal to 3.5 percent or the change in the Consumer Price Index, whichever is greater. The index has not been higher than 3.5 percent since 1991.

Mitchell’s base salary is now $238,376.

But he gets more.

• At the end of each calendar year, he is eligible for a performance bonus of 20 percent of his base pay. He got $46,063 this past March for his work in 2002.

Mitchell gets that 20 percent bonus if more than half the staff that reports “to or through” him qualify for bonuses, according to his contract.

In other words, if enough of his own staff get bonuses, he gets one, too. In the past three years, all his staff got bonuses except one employee last year, according to pension board records.

• Mitchell’s annual pay also can get a boost of up to $50,000 a year at the “sole discretion” of Dyer. That money comes through a reward and retention program to keep its investment staff in place. The pay is based on how well staff manage the pension fund’s portfolio.

• The state teachers fund also pays both the employer and employee share of Mitchell’s contributions to the Public Employees Retirement System, and makes contributions to the Ohio Deferred Compensation Fund on Mitchell’s behalf. Together, the contributions are capped at $18,307 each year.

• To end his contract, Mitchell must provide the teachers system with a three-month notice. If he doesn’t, he owes the system $100,000.

But if the teachers pension fund fires Mitchell for malfeasance or nonfeasance, either wrongdoing or not doing his job, it must pay him a year’s salary at his base pay at the time.

That’s cheap compared to the cost of getting rid of him for any other reason. Absent malfeasance or nonfeasance, it must pay him the remainder of his contract as long as Mitchell remains available as a consultant, lives within 35 miles of the Columbus headquarters and does not get another job that pays him more than $100,000.

Teacher’s retirement system officials have said the bonus program for the investment staff meets industry standards and is necessary to keep qualified and trained money managers at the pension fund. The fund handles most of its $47.2 billion portfolio in-house.

Deborah Scott, chairwoman of the STRS board, recently told the Ohio Retirement Study Council, that the bonus program follows recommendations by consultants hired by the board. That program has been suspended pending review by the board. But the suspension does not affect Mitchell because of his contract.

Sen. Lynn R. Wachtmann, R-Napoleon and chairman of the study council, said he wants to see the incentive program for the investment staff return in some form “sooner rather than later” because he doesn’t want “the investment staff to leave in mass.”