Communicating what is value for money and developing appropriate pay structures as part of this measurement is a challenge.

The ranking of CIOs by performance and pay as measured by Skorina seems crude. It seems to consider neither the working environment, benchmarks, constraints and governance, nor responsibilities such as reporting, staff training and motivation, technology oversight and strategic thinking.

Charles Skorina argues that none of this matters, that institutions are paying their CIOs to generate a return and so they can be measured against that return.

To some extent that is true, however life isn’t quite so simple. But at least Skorina is bringing the idea of accountability for salary to the fore, and perhaps it is a starting point.

The industry is grappling with is an appropriate pay structure. The 2011 Mercer Financial Services Executive Remuneration Survey in the UK shows across that sector that pay continues to move away from short-term incentives.

Mercer reveals that from 2008 to 2010, base pay for senior positions in this sector rose from 25 to 34 per cent. At the same time, the proportion of long-term incentives for chief executives increased from 36 to 46 per cent as annual bonuses dropping from 39 to 23 per cent of annual salaries.

There is no formula for success. A number of funds, however, have spent and continue to spend an increasing amount of time on this issue. CalPERS has a performance and compensation committee, as well as an elaborate measurement system for its executive pay structure.

The CIO is measured against a variety of short and long-term, investment and organisational issues. Similarly the Canadian Pension Plan Investment Board (CPPIB) has identified executive pay as a key organisational issue, particularly because it employs more than 800 people and manages all assets in house.

Keith Ambachtsheer’s paper – How Should Pension Funds Pay Their Own People? – provides a case study of CPPIB. More widely, Ambachtsheer identifies executive remuneration as one of five critical pieces of the puzzle if a pension fund is to invest productively, administer efficiently and advise wisely.

To do these well, he says, requires aligned interests with stakeholders, good governance, sensible investment beliefs, effective use of scale and competitive compensation.