Permanent Fund trustees create committee to vet benchmarks tied to staff bonuses

The Alaska Permanent Fund missed its benchmark this year, so most staff did not receive incentive pay, Board Chair Jason Brune told the Alaska Permanent Fund Corporation Board of Trustees on Thursday. At the same annual meeting in Nome, trustees created a committee to review the benchmarks that help decide those bonuses, and staff already want some changed this fall.

Trustees adopted a charter for the new Benchmark Review Committee, APFC's meeting record shows. The committee will review proposed changes to staff performance yardsticks and forward recommendations to trustees, who keep final authority. The motion carried on a roll call, with every trustee who answered voting yes. One trustee was offline.

The committee has three members: one member of the corporation's Investment Advisory Group, a representative of investment consultant Callan and the chief executive officer. It will review existing policy benchmarks annually and evaluate staff requests for changes. Staff said requests must reach the committee before the December board meeting because benchmarks take effect July 1.

Vice Chair Ethan Shutt, who chairs the Governance Committee, made the motion. Shutt called the review critical "given the nature of how benchmarks can incentivize behavior by investment teams and staff and/or reward them with their near-annual performance bonuses." "This is how we ensure that the benchmarks are appropriate and fair and don't ultimately create incentives to do the wrong thing for staff and reward staff for doing the right thing," Shutt said.

The charter sets a Sept. 30 proposal deadline. CEO Deven Mitchell said that date had already passed, and staff "do have some identified adjustments to some of the asset class benchmarks that we would like to examine this fall." Shutt and the seconding trustee accepted Mitchell's suggested Oct. 31 date as a friendly amendment for this first year.

Staff first proposed a formal review process in the December 2025 quarterly meeting packet, after talks with Callan and advisory group members. The Governance Committee reviewed the draft charter July 20.

Alaskans for Sustainable Budgets, an advocacy group tracking the fund's performance, has argued on social media that underperformance against existing benchmarks should prompt a review of investment policy, not the benchmarks. The group called that approach "failing performance, change the goalpost."

Brune said trustees expect staff recommendations by Oct. 31. The committee will send them straight to the full board before the December meeting.