A recent decision by the North Dakota Retirement and Investment Office allows its top officials to earn up to 100% of their salaries as an incentive compensation program. This initiative aims to incentivize better performance in investments, with the hope of saving the office millions of dollars annually. The office plans to internally manage 50% of the state’s assets, with an estimated annual savings of $45 million.
The State Investment Board approved this program in February, with some opposition from board members due to concerns about salary disparities within state government. The program includes various positions within the office, not just investment advisors, and focuses on rewarding long-term investment performance.
The plan is designed to attract and retain talented professionals, earn high investment returns at a reasonable cost, and motivate staff to make good decisions. However, some lawmakers express concerns about the specifics of the program, such as the small margin required to qualify for bonuses and the allocation of bonuses across different positions.
The implementation of this program represents a significant shift in how the office manages its assets and compensates its employees. It will be interesting to see how this program affects the office’s investment performance and if it achieves its intended goals of cost savings and improved investment outcomes.
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