Cuts? What cuts? £450,000 bonuses for Cambridge University Investment staff

Cartoon - Alex Driver 27 January 2011

Key figures in the University’s Investment Office are receiving huge bonus payouts for their work last year, a document leaked to The Cambridge Student reveals.

Four members of the Office, which manages Cambridge’s endowments, earned bonuses totalling £450,000 last year, in addition to combined salaries of £461,500. Nick Cavalla alone, a former investment banker and the Office’s head, was allocated £195,832 – almost £30,000 more than the value of his salary. King’s graduate Cavalla has led the Investment Office since 2007, when he was headhunted from hedge fund Man Global Strategies.

In an interview with Cambridge’s alumni magazine, he explained that the University employs “top external fund managers” who invest its capital in return for a fee.

Nick Shaw, the second highest-paid member of the Office, was allocated a bonus of £165,275, in addition to a salary worth £146,000. In total, the amount earned by Investment Office staff in bonus fees alone would pay for the tuition fees of 21 students taking 3-year courses under the government’s new maximum fee cap – or possibly, for the teaching and administration of one small paper in an arts tripos.

Last week, TCS revealed that University working groups were looking into culling less popular papers in the wake of government cuts.

Commenting on the leak, CUSU Student Support Officer Morgan Wild said, “The potential threat to small papers was, for us, perhaps the most concerning element of the PRC working group’s investigation into efficiencies. Small papers, such as Ancient Greek Democracy in History and Mathematical Logic in Philosophy, form a fundamental part of the University’s mission, as it has a duty to teach in areas of specialist intellectual interest.”

“We would expect that if the University has been able to find the money to remunerate financial staff so generously, it will be able to find the money to ensure that small papers continue to exist.”

The leaked document also details concerns over the number of staff receiving salaries between £110,000 and £120,000. It reveals that the University’s Remunerations Committee – the body responsible for overseeing bonus payments and salary levels – “wished to be provided with an explanation for the sharp increase” in the number of staff in this bracket, from 28 in 2009 to 41 last year.

A spokesperson for the University told TCS: “It is the duty of the University’s Remuneration Committee to scrutinise and approve salary payments to senior staff.”

“The bonuses approved for the staff of the Cambridge Investment Office, which are agreed on the basis of results achieved, are made against criteria agreed by the Committee and on the advice of the University’s Investment Board. The amounts are published annually in the Reporter as are the different salary bands for all staff as well as any payments for additional responsibilities.”

Last year, the University claims it saw a 19.2 per cent increase in the total value of its investments.

James Burton – News Editor

Cartoon – Alex Driver