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Table 3 Savers-principals and their agents

From: Pension and state funds dominating biomedical R&D investment: fiduciary duty and public health

Distance from principals

Agents

Financial flows order of magnitudea

Authority by

Incentive

Compensation

Geography

Principals

Savers

Thousands

Asset ownership

Welfare

May be based on financial performanceb. Linear scaling

Dispersed

1

Pension fund board

Billions

Election or political appointment

Political

Fixed retainer fee

Concentrated: regional or national

2

Pension fund executives

Appointment by pension fund board

Financial return

Based on financial performance. Superlinear scaling

3

Investment managers

Trillions

Appointment by pension fund executives

Financial return

Based on financial performance. Superlinear scaling

Concentrated: global financial centres

4

Corporate directors

Millions

Appointment by investment managers’ vote on shares

Financial return

Based on financial performance. Superlinear scaling

Concentrated: global economic hubs

  1. aAnnual pension contributions in high-income countries amount to several thousands to tens of thousands of USD. Pension funds can range from several billion to several hundred billion USD, while the largest investment managers have several trillion USD under management. They invest in stock-exchange-listed corporations and vote their shares to elect corporate executives. Corporate executives then have authority over smaller operational budgets that can amount to hundreds of million USD (for instance, Alexion Pharmaceuticals annual R&D budget in 2018 was $730 million [22]).
  2. b Savers can benefit from their pension fund’s strong financial performance in other ways, for instance, through a reduction of monthly contributions