The CalPERS board approved a $1.15 million performance bonus for Frost, a sizable jump from the $766,000 incentive she received the previous year. Combined with a newly approved base salary of $641,000 — up from $601,000 — Frost’s total pay package now exceeds $1.7 million.

The raise comes as CalPERS continues to post strong investment gains and enjoys a rare stretch of steady leadership. Frost took the helm of the fund in 2016, a time when CalPERS held assets covering only about 65% of what it owed retirees, a lingering scar from the 2008 financial crisis. Since then, the fund has required government employers to increase contributions toward their workers’ retirement benefits, and it has now strung together three consecutive years of investment returns that outpaced targets.

Last year alone, CalPERS reported a 14.8% return, more than double its long-term goal. As of June 30, the fund’s portfolio was valued at $637.1 billion, enough to cover about 85% of its long-term obligations to members — a marked improvement from where things stood when Frost arrived.

CalPERS Board President Theresa Taylor praised Frost’s leadership in a statement, calling her “a CEO on top of her game” who is “delivering excellent results for CalPERS members.”

Not everyone on the 13-member board agreed. Board member Mulissa Willette and a representative for state Controller Malia Cohen cast dissenting votes. Deborah Gallegos, speaking on Cohen’s behalf, told the board during Wednesday’s meeting that the pay package failed to reflect the full range of opinions among board members and ignored California’s current budget challenges.

“The views of the board members with dissenting views were dismissed,” Gallegos said. “I cannot stand behind a motion which does not equitably take into consideration all relevant factors, particularly in light of the current structural deficit in California.”

The bonus also drew criticism from several retirees affiliated with the Retired Public Employees Association, a group led by former CalPERS board member Margaret Brown, who addressed the board directly.

“There is something fundamentally wrong when public service compensation begins looking like Wall Street compensation,” Brown said.

Despite the record bonus, Frost remains far from the top earner among California’s two major public pension systems. Chief investment officers at both CalPERS and the California State Teachers’ Retirement System typically out-earn their agencies’ chief executives. CalPERS Chief Investment Officer Stephen Gilmore brought home $2.2 million in total compensation last year, while his CalSTRS counterpart, Scott Chan, earned $1.4 million, according to figures from the State Controller’s Office.

Frost’s bonus tends to draw early attention each year simply because of scheduling — CalPERS board meetings fall earlier in the calendar than those at CalSTRS, which does not disclose its own executive bonuses until November.

Frost’s time leading CalPERS has not been without turbulence. Between 2019 and 2024, the fund churned through three different chief investment officers, the executive responsible for shaping CalPERS’ investment strategy toward its 6.8% annual return target. That instability ended when Gilmore was hired in 2024, bringing a measure of continuity to the fund’s top investment post.

Original source: CalMatters

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