Wednesday, 26 November 2014
Last updated 13 min ago
May 25 2010 | 11:47am ET
Upset with proposals to limit his pay and with a gubernatorial candidate’s vilification of him, the head of Massachusetts Pension Reserves Investment Management is quitting to join a hedge fund.
Michael Travaglini, who has led the $44 billion public pension fund for six years, will resign next month and join Grosvenor Capital Management. He’ll serve as managing director for business development at the Chicago-based firm, marketing its wares to public pension funds.
Travaglini, who has worked in Bay State government for years and whose brother, Robert, formerly led its state Senate—said a pair of legislative proposals to limit his pay and bonuses, as well as those of other Mass. PRIM employees, sparked his decision.
“The issue of incentive compensation here is back on the front burner,” he told the Boston Globe. “If you need the context of my decision, it’s an entirely personal one. I have a wife and three children, and I’m going to provide for them.”
Massachusetts legislators are considering two bills that could cap pay at its pension system, under Travaglini one of the most successful in the country. One proposal would bar Mass. PRIM from paying any bonuses in a year it loses money; the other would limit the ability of state employees to earn more than the governor. Massachusetts Gov. Deval Patrick makes $143,000 per year; Travaglini earns $322,000.
Travaglini also struck out at Republican-funded ad campaign on behalf of independent gubernatorial candidate Timothy Cahill, which blast Mass. PRIM for paying out bonuses in 2008, when it was one of the worst-performing public pension funds in the country. Travaglini says the ads are “false” and “irresponsible” coming from Cahill, who, as state treasurer, serves as chairman of the Mass. PRIM board.
The outgoing executive director warned that limiting or barring incentive pay will make it hard for Mass. PRIM to attract the kind of talent it needs to maintain its strong track record.
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