04/17/2013 03:35 EDT | Updated 06/17/2013 05:12 EDT

Caisse CEO Michael Sabia's 2012 compensation totals just over $1.7 million

MONTREAL - The head of pension fund manager Caisse de depot et placement du Quebec earned just over $1.7 million in total compensation for 2012 including $700,000 in a deferred bonus.

CEO Michael Sabia's remuneration also included $500,000 in salary, a $500,000 bonus and $40,000 in other compensation.

That compared with $500,000 in salary, a $400,000 bonus, $40,000 in other compensation and $800,000 in a deferred bonus for a total of just over $1.7 million in 2011, the same as 2012.

Excluding the deferred bonus, Sabia's direct compensation for 2012 was $1.04 million, up from $940,000 in 2011 when he elected to defer more of his bonus for the year.

The Caisse requires at least 40 per cent of Sabia's bonus be deferred and tied to the performance of the pension manager over a three-year period.

The $700,000 in deferred bonus for 2012 will be paid in 2015 after being adjusted to the Caisse's average return from the three previous years. That compared with $800,000 that was deferred in 2011 and will be paid in 2014.

Most of the 2,678 employees of the Caisse and its subsidiaries received bonuses, which totalled $35.3 million in 2012, up from $31.4 million a year earlier.

The Caisse generated a 9.6 per cent return on investments in 2012, raising its assets to $176.2 billion from $159 billion in 2011.

The returns for its top seven depositors ranged between 8.2 and 10.5 per cent. The Quebec Pension Plan achieved the top returns after gaining just 2.8 per cent in 2011.

By slightly beating the benchmark index of 9.3 per cent, the Caisse added $14.9 billion in net investment returns and $2.3 billion in net deposits.

Despite disastrous results in 2008, which saw its asset base drop by nearly 23 per cent to $120 billion, the Caisse's annualized returns over the last decade are 6.7 per cent.

Note to readers: This story clarifies an aspect of Michael Sabia's compensation. It specifies that his total compensation did not increase from 2011 to 2012. An earlier version may have left an incorrect impression it had increased.

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