As these numbers show, insurance is TIAA’s biggest business by far. It is a joint stock life insurance company whose shares are held by the supervisory board of TIAA. Most of the money it generates in its businesses is either reinvested in the business or paid out to TIAA annuity holders, according to the company. Last year it paid out $ 3.8 billion to these holders.
TIAA employees were paid nearly $ 1 billion in 2016, according to its statements.
TIAA’s executive compensation packages are comparable to those on Wall Street. During 2016, Mr. Ferguson, its Chief Executive Officer, received $ 18.5 million in compensation, $ 5.1 million more than Michael Corbat, CEO of Citigroup, has received.
Although TIAA claims that its sales representatives are not paid commissions, it grants bonuses to financial consultants and advisers if they sell internal products or services. “Consultants are encouraged to refer or recommend that you open TIAA accounts, products and services,” a TIAA filing said with the SEC.
TIAA’s financial consultants who deal with institutions also receive bonuses based on their success in keeping clients’ money in-house, according to the filing.
The company indicates in the file that it deals with these conflicts of interest “by disclosing them to you”. Although the long document is sent to TIAA customers, they may not read it. Conflicts are not discussed in TIAA’s current private assets management brochure, dated March 2017, which reads: “Your team always manages your portfolio in your best interests.
But the whistleblower’s complaint recounted a comment made by an executive at a company counselors convention in Orlando, Fla., In 2014. At the event, according to the complaint, Carol Deckbar, then executive vice president and chief operating officer at the company, urged advisors to invest more of their clients in internal mutual funds. “Where do you think you get your bonuses?” The executive asked the crowd, according to the complaint.
Ms Deckbar, now head of institutional investment and endowment products and services at TIAA, declined to comment through the TIAA spokesperson. The spokesperson also declined to comment.