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CalSTRS compensation committee authorizes RFP to establish consultant pool, removes succession item from scope
Summary
The CalSTRS Compensation Committee voted to start a procurement to create a pool of compensation consultants and to select a primary strategist, removing a proposed succession-planning task from the consultant scope to preserve that work for the governance consultant.
The California State Teachers Retirement System (CalSTRS) Compensation Committee voted to begin a request-for-proposal process to establish a pool of compensation consultants and to select a primary compensation strategist, and agreed to remove a succession-planning task from the consultant scope.
Assistant Director of Human Resources Christine De Leon told the committee staff are seeking approval “to begin the process to issue an RFP to establish a pool of compensation consultants for services to the committee and board, as well as the selection of your primary compensation strategist.” She said current contracts with Global Governance Advisors (primary strategist) and Mercer (pool member) were established in July 2021 for five years and expire June 30, 2026, with no ability to extend, and staff want to start the procurement earlier to ensure continuity.
The committee discussed specific scope language carried over from the 2020 scope of work. Crystal, a staff member, noted legacy language around executive and investment-management succession planning and told the committee the governance consultant has taken on much of the CEO/CIO evaluation and succession work. “Item 6 specifically on succession planning… I don't think they traditionally have been,” Crystal said, and members agreed succession tasks could be removed from the compensation consultant solicitation.
Miss Perrault urged the RFP and consultants to account for constraints and unique elements of total compensation for a public pension system — including state budget limits, pension benefits, hybrid work and other non-cash benefits — so the solicitation does not favor only private-investment compensation firms.
After discussion the committee moved to advance the RFP with the removal of item 6. Mister Tang moved the motion; Miss Sanders seconded. The roll call recorded affirmative votes from the attendees listed by the roll-taker: Director of Finance (present), Miss Faroe (present), Controller Cohen (present), Mister Tang (present), Miss Hendricks (present) and Miss Sanders (present). The motion passed.
Counsel advised committee members to provide contact information for potential bidders to counsel, who will pass it to the procurement analyst; once the RFP posts the public procurement rules include a no-contact period. Staff said they expected to publish the RFP within a week or two and described the procurement timeline as aggressive. The committee also set a January meeting focused on education about the compensation policy and related topics.
The motion and vote mark the committee's formal direction to staff to begin procurement for compensation consulting services, with the stated goal of identifying a primary strategist and ensuring consultative continuity when current contracts lapse on June 30, 2026.
