Record endowment returns for $2M salary
- For nearly 20 years, L. Erik Lundberg has overseen investments for a the University of Michigan's endowment fund that last year reached $10.9 billion after yielding 13.8% in returns — 1.6% better than the average of more than 800 colleges nationwide with large endowments, according to the Detroit Free-Press.
- Lundberg is one of the nation's top-grossing chief investment officers managing a public institution's endowment. He grossed more than $2 million in compensation in 2016 with an incentive-supported base salary of $690,000.
- Auditors and critics have questioned Lundberg's freedom to serve on paid boards and to conduct outside investment work. But Michigan officials said that he frequently gives these earnings to need-based scholarships and according university gift records, donated more than $900,000 between 2006 and 2016.
Recent research shows the range of support that college endowment returns can provide to campuses. In 2016, the Endowment Trust suggested that increasing annual endowment spending across higher education by less than one percent — about $418 million collectively — could help generate tuition support for low-income students that would reduce costs by nearly $8,000 per year per learner.
With lower returns on investments, which averaged a loss of 19% nationally according to 2016 statistics from the National Association of College and University Business Officers, chief investment officers are far more valuable to schools looking to avoid negative press about endowment losses, as Harvard University has experienced over the last three years.
- Detroit Free Press Endowment chief is U-M's $2-million man. Auditors wanted to know more.
- Education Dive Endowment returns hit historic lows but institutional spending is up
- Education Dive How one small college endowment outpaced Harvard's investment team