CalPERS subcommittee recommends contract with Global Governance Advisors after finalist interviews

The California Public Employees' Retirement System (CalPERS) Performance, Compensation and Talent Management Subcommittee voted to recommend that the full board award a contract to Global Governance Advisors LLC to provide executive and investment compensation consulting, subject to final negotiations, conflict‑of‑interest clearance and satisfaction of all contract requirements.

CalPERS staff told the subcommittee that the board released the solicitation on June 16, 2025 and received six proposals by the final filing date of July 2, 2025. Three firms advanced to the oral interview stage: Global Governance Advisors LLC, Hugessen Consulting Inc., and Mercer LLP. Justin Heap, CalPERS procurement manager, said the committee would assign interview scores up to 1,200 points per finalist; those interview scores would be combined with the preliminary proposal totals to produce a final ranking.

The interviews took place in a confidential format: the subcommittee turned off the public webcast while each finalist presented and then resumed the webcast for subcommittee discussion and scoring. Each finalist was allotted 45 minutes total — five minutes for a presentation and 35 minutes for questions from the five voting subcommittee members.

Global Governance Advisors emphasized its public‑pension and governance education experience, noting work with CalPERS over the last five years and prior projects on compensation policy, long‑term incentives and CEO evaluation. Partner Brad Kelly said the firm focuses on educating trustees and stakeholders and on creating defensible peer groups and quantitative rationale for incentives. "When we work with clients, we truly believe that it's not just our recommendations that come forward, it's also the rationale as to why we're requesting, making these recommendations," Kelly told the subcommittee.

Hugessen Consulting, represented by Bridget McKellar and Richard Liu, highlighted long engagements with large Canadian pension funds (the so‑called Maple 8) and emphasized board‑first advisory work, governance, disclosure and stakeholder communications. Hugessen proposed adapting practices from highly funded Canadian funds to CalPERS' U.S. regulatory and political environment.

Mercer presented a multi‑person team and stressed benchmarking strength, saying that "Mercer has the world's largest compensation survey database" and offering extensive survey and benchmarking capability as a foundation for pay‑for‑performance design and comparator selection.

Committee members asked finalists how they would balance public sector and private‑sector comparators, design measurable quantitative and qualitative performance objectives, handle incentive payouts in down markets, and adapt compensation measures if CalPERS adopts a third‑party administrator (TPA) investment model. Finalists described approaches that included stress testing payout scenarios, using defensible peer groups, strengthening disclosure and, where appropriate, conducting third‑party audits of incentive calculations.

Staff read the interview scores and combined totals aloud. Interview scores were: Global Governance Advisors LLC — 1,200; Hugessen Consulting Inc. — 1,000; Mercer LLP — 1,125. When combined with the previously announced preliminary proposal totals, the final scores were: Global Governance Advisors LLC — 2,055; Hugessen Consulting Inc. — 1,838.8; Mercer LLP — 1,933.8. A staff member announced, "The finalist with the highest total score is Global Governance Advisors." The subcommittee then moved, seconded and approved a recommendation that the full CalPERS board award the contract to Global Governance Advisors, subject to negotiation and clearance of any conflicts of interest. The motion passed by voice vote; no opposing votes or abstentions were recorded on the motion following the roll call and discussion.

The subcommittee instructed staff to begin contract negotiations with Global Governance Advisors and included contingency language directing staff to open negotiations with Mercer LLP if negotiations with the top‑ranked firm are unsuccessful. The meeting record reminds members of the restricted contact rule for vendors under Government Code section 20153. The subcommittee concluded with no public comments and adjourned.

What happens next: staff will begin contract negotiations and complete standard conflict and compliance checks before the matter goes to the full CalPERS Board of Administration for final action. If negotiations with the top‑ranked finalist fail, staff will proceed to negotiate with the next‑ranked firm (Mercer LLP) per the subcommittee motion.