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Compensation Philosophy

Objectives of our executive compensation program

The compensation philosophy of CFA Institute is designed to attract, reward, and retain top-level executive talent. The compensation philosophy aligns with our mission and cultural values and further reinforces our results-driven focus through differentiated performance awards that are necessary to deliver sustained high performance.

We apply the same compensation principles for our executives as we do for the rest of our employees. These principles are:

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    Competitive and equitable programs that support the strategic goals of our organization;

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    Global consistency in the design of our compensation programs while recognizing the need to reflect local practices where necessary;

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    Balancing the need to attract talent from the industry, while simultaneously recognizing the not-for-profit structure of our business when designing pay practices; and

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    Programs that are consistent, fair, and free from discrimination.

Form 990 is used by tax-exempt organizations to report their activities to the United States Internal Revenue Service (IRS) and is a required annual filing.

How We Make Executive Compensation Decisions

Role of the People and Culture Committee

We are committed to having a strong and effective corporate governance framework. The People and Culture Committee (PAC) of the CFA Institute Board of Governors provides oversight on executive pay. There are four independent governors on this committee. They are free of any relationship that would interfere with their exercise of independent judgment or have fully declared any possible conflicts and have recused themselves of decisions where appropriate. The PAC meets frequently throughout the year to discuss matters related to executive pay and to provide direction.

We refer to our President and CEO and to our managing directors as “executives.” The PAC determines the compensation of our CEO, including any incentive, and the group may engage independent consultants to provide necessary compensation recommendations. The PAC also approves the compensation plan for the organization for implementation by the CEO, which includes how much we spend in aggregate on salary increases and incentives for our employees. In addition to the CEO, the Chief Compliance, Risk & Ethics Officer (CCREO) reports directly to the Board, while the Chief Legal Officer (CLO) has a dual reporting relationship with the CEO and the Board Chair. The compensation for both the CCREO and CLO is reviewed and approved by the PAC.

Successful and sustainable delivery against the mission is at the forefront of our executive compensation program. As an organization, we value the development of strong goals for our executives. We focus on selecting the right metrics to measure not only progress toward these goals but also the degree to which our executives exhibit critical leadership capabilities in how they progress towards these goals. This better enables us to assess and calibrate performance in a meaningful way. Our objective is to recognize the needs of the organization while keeping in mind both financial and strategic priorities that create value for our members. At the end of the year, the PAC considers other factors as well, such as the organization’s overall performance and how much progress was made towards our strategic objectives to determine the CEO’s compensation.

We review and discuss any disclosures regarding our compensation plans, policies, programs, and practices with the PAC and obtain guidance on executive employment agreements and severance arrangements.

We believe it is essential to have the right people in the right place at the right time. We review succession plans for our CEO and other executives with the PAC, and periodically with the whole Board, to ensure we are prepared for the future and have leadership continuity within our organization by recruiting and/or encouraging individual employee growth and development.


Role of the CEO

The CEO makes performance and compensation decisions for all executives, with the exception of the CCREO and CLO.

The CEO looks at each executive’s contribution, individually and collectively as an executive team, and takes into consideration the successful execution of the organization’s annual strategic goals and progress towards our long-term strategy. The CEO also considers individual experience, individual performance, internal and external pay equity, development and succession status, time in the position, and other individual or organizational circumstances.

At the end of the performance cycle, the CEO reviews his or her assessment of each executive’s individual performance and compensation recommendations with the PAC before implementing his or her decisions.

Our CEO does not play any role with respect to any matter affecting his or her own compensation.


We retained a global management consulting firm to conduct the 2019 executive market survey. The study is conducted on an independent fee basis, and the PAC provides oversight of this study.

There are a limited number of companies that closely resemble us in size, scope, and nature of business operations. The objective is to acquire a fair and relevant view of pay practices in markets where we are most likely to recruit our executive talent. As a result, for each executive position the peer group selection differs and could span different industry sectors including not-for-profit firms, investment firms, academia and higher education, and general industry.

We evaluate the relevance of benchmarks based on similar:

  • size and complexity,
  • global scale and scope,
  • talent profile, and
  • mission-driven membership/education focus.