Marcie Frost, CEO of the California Public Employees’ Retirement System (CalPERS), is set to earn over $1 million in total compensation for the first time, after receiving a $667,320 bonus. This bonus is more than triple her previous year's incentive of $192,682, bringing her total pay to more than $1.2 million, up from $752,000 last year. The decision follows a successful investment year for CalPERS, where the fund achieved a 9.3% return on its investments, surpassing its 6.8% target. As the nation's largest state-backed pension fund, CalPERS currently manages $528 billion in assets.
The significant bonus and total compensation for Frost come amidst public scrutiny and concerns about the fund's underfunded status. Despite the recent strong performance, both CalPERS and CalSTRS (California State Teachers' Retirement System) are considered underfunded, with assets worth approximately 75% of their future benefit obligations. Some public comments at board meetings have opposed such payouts, citing the state's budget deficit and rising health premiums for retirees. CalPERS has also faced challenges in retaining top talent, particularly in the Chief Investment Officer role, with Stephen Gilmore being the fourth person to hold that position since Frost joined in 2016.
Looking ahead, CalPERS reported a preliminary net investment return of 14.8% for the fiscal year ending June 30, 2026, driven by strong performance in public equity (24.1% gain) and private equity (17% return). This result exceeded both the previous year's 11.6% performance and the assumed 6.8% rate of return. The fund's assets grew to $637.1 billion, and its funded status improved to 85% from 79% in the prior fiscal year. This positive trend has been attributed to the fund's diversification into alternative investment categories and the adoption of a Total Portfolio Approach in November 2025, which gives the investment team greater flexibility to optimize for the entire fund rather than individual asset classes.
