Justin Heeb

The subcommittee focused on the transition to a Total Portfolio Approach (TPA) for incentive metrics. Key discussions included the adoption of performance hurdles for fiscal year 2026-2027, the establishment of incentive plans for executive and investment management roles, and the grandfathering of existing metrics. The subcommittee also reviewed compensation incentive structures, the role of qualitative versus quantitative performance measurements, and received feedback from stakeholder representatives regarding current performance evaluation standards.

The committee meeting focused on the approval of the current CEO Delegation Resolution. Furthermore, the members engaged in a discussion regarding the requirements and procedural steps necessary to complete the Board's self-assessment for the current cycle.

The committee recommended Board approval for the family building benefit for PPO Basic plans, effective July 2027. Reports were provided regarding Preliminary 2027 Health Maintenance Organization and Preferred Provider Organization plan premiums. Public commentary addressed concerns regarding the grouping of Amador County into Region One, the availability of health plans in that county, and risks associated with private equity acquisitions in healthcare. The Chair requested a future spotlight on Sutter Health Plan and the preparation of communications concerning the exit of UHC's Basic plans from the CalPERS Health Program.

The committee held a meeting to discuss incentive metrics for the upcoming fiscal year. Key topics included the transition to a Total Portfolio Approach, the recommendation for incentive hurdle rates, and the proposed incentive plan for the chief executive officer. The committee evaluated performance against a reference portfolio and considered adjustments to weightings for enterprise operational effectiveness and total fund metrics. Additionally, a grandfathering approach for the performance cycle was recommended to ensure fairness to program participants during the transition.

The committee meeting focused on executive reports regarding leadership changes, including the promotion of the deputy chief investment officer for private markets and the appointment of a new managing investment director for the total fund team. Significant portions of the meeting were dedicated to public comments from various faculty members and stakeholders, who raised ethical concerns regarding the committee's investment holdings in companies like Palantir Technologies, Tesla, and Axon. These speakers urged the board to reconsider its investment strategies, citing issues related to immigration enforcement, perceived financial risks, and ethical considerations.