Turbulent times bring out the best and worst in every aspect of financial investing. Once again, mutual funds are proving to be an appropriate investment for individuals, families and small organizations. Mutual funds are safer and less volatile in turbulent times because of their professional management, diversification, transparency, and governance structure.

C. Meyrick Payne and Jay Keeshan, Management Practice, Inc (MPI).  Data for this Bulletin is principally drawn from the  MPI Annual Survey of Trustee Compensation and Governance Practices.

Independent mutual fund directors, who have the authority to annually review and renew the investment advisory contract, have proven to be a cost efficient and effective way to govern the collective investments of millions of Americans. Occasionally this statement is called into question. In the paragraphs which follow, we highlight four ways to quantify the cost efficiency and market effectiveness of independent mutual fund directors.

MPI has recently completed its third annual survey of Chief Compliance Officer Compensation and Organizational Practices. This Bulletin is a summary of the findings and is based on the submissions of 64 fund families following 46 which reported last year.

We analyzed the data by plotting the total compensation against assets under management. We found that CCO compensation increased as size increases but that economies of scale exist (i.e. a CCO is paid more for the first $1 billion of assets than the second $ billion and so on). We found that the highest paid CCOs approach $1 million per year and very few are paid less than $150,000. When we compared the same CCOs year over year we found an average pay increase of 9%.