§21–118.1.

    (a)    Notwithstanding any other provision of law, on the recommendation of the Executive Director and the Investment Committee, the Board of Trustees shall determine the qualifications and appointment, as well as compensation and leave, for the Chief Investment Officer who shall be the head of the Investment Division.

    (b)    (1)    In making determinations and appointments under this section, the Executive Director and the Investment Committee shall consider the comparative qualifications, compensation, and leave of employees serving in similar positions and discharging similar duties at comparable public pension funds.

        (2)    (i)    1.    The Board of Trustees shall adopt objective criteria for setting the qualifications and compensation of the Chief Investment Officer.

                2.    The Board shall consider the recommendations of the Objective Criteria Committee under § 21–122(g) of this subtitle before adopting objective criteria for setting compensation.

            (ii)    The criteria adopted under subparagraph (i) of this paragraph shall include objective benchmarks of investment performance that shall be met or exceeded for the Chief Investment Officer to be eligible for an increase in compensation.

            (iii)    The Board may not grant any increases in compensation to the Chief Investment Officer in a fiscal year in which State employees are subject to a furlough.

            (iv)    The Chief Investment Officer’s compensation may not be adjusted in accordance with cost–of–living adjustments and merit increases available to State employees.

    (c)    (1)    In addition to the Board of Trustees setting the compensation of the Chief Investment Officer under subsection (a) of this section, the Board of Trustees may also award financial incentives to the Chief Investment Officer in accordance with this subsection and subsection (d) of this section.

        (2)    (i)    Any financial incentives paid shall be paid over multiple fiscal years in equal installments.

            (ii)    The dates on which financial incentives awarded under this section shall be paid shall be set by the Board of Trustees at the time the financial incentives are determined.

            (iii)    The dates set under subparagraph (ii) of this paragraph may not be changed after being set.

        (3)    (i)    Except as provided in subparagraph (ii) of this paragraph, if the Chief Investment Officer separates from employment, the Board of Trustees may not pay out any remaining financial incentives due to be paid after the date of separation from employment.

            (ii)    The Board of Trustees may pay any remaining earned financial incentives after the date of separation from employment if the Chief Investment Officer retires directly from the Investment Division on or within 30 days after the date of separation from employment.

        (4)    (i)    The Board of Trustees may not pay financial incentives in a fiscal year in which State employees are subject to a furlough.

            (ii)    The Board of Trustees shall pay out any financial incentives not paid in accordance with subparagraph (i) of this paragraph only:

                1.    after the furlough period has ended; and

                2.    if the Chief Investment Officer is currently employed as the Chief Investment Officer.

    (d)    (1)    (i)    1.    On the recommendation of the Investment Committee, the Board of Trustees shall establish objective criteria for awarding financial incentives to the Chief Investment Officer.

                2.    The Board shall consider the recommendations of the Objective Criteria Committee under § 21–122(g) of this subtitle before adopting objective criteria for awarding financial incentives.

            (ii)    Financial incentives may only be awarded based on the objective criteria adopted in accordance with subparagraph (i) of this paragraph.

        (2)    The criteria under paragraph (1) of this subsection shall include:

            (i)    objective benchmarks of investment performance for the assets of the several systems that shall be met or exceeded;

            (ii)    objective criteria used by comparable public pension funds awarding financial incentives to chief investment officers; and

            (iii)    limitations on the amount of financial incentives in a fiscal year, not to exceed 33% of the Chief Investment Officer’s compensation exclusive of financial incentives.

        (3)    The Chief Investment Officer may not participate in any deliberations regarding the establishment of criteria under this subsection.

        (4)    The criteria established under this subsection shall be included in the investment policy manual.

        (5)    On or before September 1 of each year, the Board of Trustees shall submit to the Joint Committee on Pensions, in accordance with § 2–1257 of the State Government Article, a copy of the most recent criteria established under this section and any financial incentives that were awarded for the previous fiscal year to the Chief Investment Officer.

    (e)    The Chief Investment Officer appointed under this section is a State employee and shall be entitled to participate in the Employees’ Pension System under Title 23 of this article.

    (f)    On the recommendation of either the Investment Committee or the Executive Director and on receiving an affirmative vote from a majority of the Board of Trustees, the Executive Director shall terminate the appointment of the Chief Investment Officer.