The best-paid names on California's state payroll last year didn't run prisons, universities or agencies. They managed money for retired public workers — and the one at the very top cleared roughly $2 million, most of it a performance bonus.

The California State Controller's 2025 pay records, posted this summer for every state worker, show a pattern that has nothing to do with the stereotype of the overtime-padded public employee: the biggest paychecks belong to the investment officers who run CalPERS and CalSTRS, the two pension giants that hold the retirements of roughly three million California teachers and public workers, many of them in the Bay Area. Their compensation is inflated not by wages or overtime but by incentive awards tied to fund performance — bonuses that swell in good years even as both funds remain billions short of what they owe.

The state's payroll ledger is public. Every year California employers report compensation to the Controller's Office, which posts it at publicpay.ca.gov (external source, opens in a new tab) — some 400,000-plus state positions for 2025 alone. Search the database by department and the same job titles keep surfacing at the top of the pay range: not wardens or campus presidents, but the money managers at the California Public Employees' Retirement System and the California State Teachers' Retirement System.

The clearest example is Stephen Gilmore, CalPERS' chief investment officer. Public compensation disclosures put his 2024–25 package near $2.26 million, of which roughly $1.54 million was an annual incentive award rather than base salary. The mechanism is legal and, on its own terms, earned: CalPERS posted an 11.6% return (external source, opens in a new tab) for the fiscal year ending June 2025, its best result in four years. "Despite some market headwinds earlier in the year, our investment strategy paid off," Gilmore said in the fund's announcement.

CalSTRS runs a similar system. The teachers' fund earned an 8.5% net return (external source, opens in a new tab) for 2024–25, and its board routinely approves eight-figure incentive pools for investment staff.

The reason the pay looks nothing like the rest of state government is structural. These are not salaried administrators; they are investment professionals whose compensation is built to echo Wall Street, where a large share of the check is "at-risk" and released only when the funds clear internal performance targets. That design is why base salary can be a minority of total pay, and why a single strong market year can vault a public servant past $1 million. As CalMatters has reported (external source, opens in a new tab), a stretch of good returns recently pushed both funds' chief executives past seven figures and fattened the incentive pools paid to dozens of investment employees — on the order of $22 million at CalSTRS in one cycle.

The stakes are not abstract for Bay Area readers. CalPERS covers about two million members, including city and county workers across the region; CalSTRS backs roughly a million teachers and retirees. Yet both funds hold only about three-quarters of what they owe their beneficiaries, a gap that has persisted since state lawmakers enriched retirement benefits during the dot-com boom, according to CalMatters. When markets disappoint, that shortfall lands on state and local budgets — the same budgets that finance the incentive awards when markets soar.

That is the tension the fresh pay data lays bare. The people who decide how three million Californians' pensions are invested are now among the highest-paid names on the state's books — rewarded in the years the bets pay off, against benchmarks the funds themselves help set, while the long-term funding hole stays open. For a Bay Area teacher or city worker counting on those checks decades from now, the question is less whether the managers are worth it than who is keeping score.