As the stock market wobbles, officials at the Harvard Management Company (HMC) are reaping the rewards of last year's bull market with record-smashing compensation--millions higher than in previous years.

The total compensation of the top five investors for fiscal year '97, which ended in June, was $27.5 million--outstripping last year's total by nearly 300 percent.

HMC is a wholly-owned subsidiary of the University that manages its $10.8 billion endowment. Investors' compensation is based almost exclusively on their performance relative to industry benchmarks.

Bonuses are paid over several years, so when the endowment grew at nearly 26 percent for two years in a row, the result was a windfall this year for fund managers.

The highest paid fund manager, Jonathon S. Jacobson, made nearly $7.6 million managing Harvard's domestic equities and emerging market portfolio. Last year, Jacobson earned $4.7 million. Jacobson's compensation is nearly 30 times President Neil L. Rudenstine's salary.

Other top salaries ranged from $7.1 million down to $3.6 million. HMC President Jack R. Meyer rounded out the list at $1.6 million, nearly doubling his $875,000 salary last year.

These stellar salaries result from stellar performance. For the fiscal year ending in June, HMC earned 25.8 percent returns, 5.3 percent above the national average for university endowments, according to preliminary numbers from the National Association of College and University Business Officers.

"We had a spectacular performance and that's recognized in the compensation," said James H. Rowe III '73, vice president of government, community and public affairs. "I'm told by [Meyer] that the portfolio managers would be compensated far better on Wall Street, so they're getting literally a fraction of what they would if they joined their colleagues elsewhere."

But many members of the Harvard community balked at the suggestion that these salaries are fair.

"It would be nice, if Harvard is making that much money, for them to share the wealth with everyone who works here," said Donene M. Williams, president of the Harvard Union of Clerical and Technical Workers. "I don't begrudge [the money managers] because I know that's what the rest of the world pays them, but the whole thing just blows my mind."

Alex S. Myers '00, a campus activist, said these salaries must be understood within the context of American society.

"It does create an interesting issue when you look at the average faculty salary or the cost of attending university," Myers said. "There's definitely--in my sort of utopian view of the world--something wrong about it, but this is 20th century America."

Some students who are participating in corporate recruiting defended the high earnings.

"I'm well aware of the salaries on Wall Street and it seems that what these people make is commensurate with what other people are making," said Mark A. Price '98, vice president of the Undergraduate Council.

Meyer, the HMC president, defended his investors' compensation.

"HMC is not an academic institution. It is a money management firm," he said. "The people we hire come from the money management business and if they leave us they go back to a money management firm, so the pay standard is other money managers."

By that standard, Meyer said, Harvard spends only about half of what it would pay to out-source the management of its entire $11 billion endowment.

Meyer also pointed out that the HMC investors do not receive bonuses for performance merely on par with benchmarks; they must exceed the benchmarks with "value added" performance to earn bonuses.

Meyer said this year's salaries climbed so drastically in part because the benchmarks dropped while HMC's performance remained almost unchanged. In other words, this year investors had greater "value added."

This fiscal year, investors achieved 5.8 percent value added, while last year they earned 3.7 percent.

Though most universities use outside investment firms to manage their endowments, Harvard established the HMC in 1974 to oversee the investment of its endowment, pension and working capital, assets that today are worth over $13 billion