Accordingly, HMC portfolio managers were paid handsomely, with salaries that outpaced any other paid individual in higher education and rivaled some on Wall Street.

But those salaries also contributed to Meyer’s ignominious departure from HMC.

In 2003, outrage erupted among Harvard alumni when it became public that HMC’s two top earners were earning around $35 million per year. Though that number dropped to $25 million in 2004, the scandal over salaries persisted.

“I don’t apologize at all for the compensation system,” Meyer said in a recent interview with The Crimson. “But it was an enormously difficult situation for Harvard. You don’t want the tail wagging the dog, and HMC was the tail.”

Though Meyer said he felt the principles underlying the system were valid, the dispute nonetheless strained relations between HMC and the rest of the University.

“We were a little less involved with people at the University than I would have liked,” Meyer said. The controversy over compensation “tended to poison relationships.” According to Meyer, he would have liked to have a more productive relationship with those across the river, “but we couldn’t because everyone was mad about compensation,”

Openly frustrated by increasing media scrutiny of endowment managers’ salaries and ready to move on after nearly 15 years at the helm of HMC, Meyer left the company to start his own hedge fund, bringing 30 of the 175 staff members with him.

Meyer’s successor, Mohamed A. El-Erian, mused that he inherited a car without an engine, according to an individual with ties to the company.

But Meyer said that he was very conscious of this concern when he departed. Meyer said he assumed that HMC would be moving away from the type of fixed income strategy used by the team he took with him.

“We thought we left it in great shape,” Meyer said.

Mendillo has since enacted changes to the compensation structure to encourage long-term thinking and diligence.

“Everyone who wants to work here knows that our compensation structure has to be uniquely well-aligned with the University,” Mendillo said in an interview with The Crimson. “And if they don’t meet their markers, they stand to lose their bonuses.”

Compensation for many HMC investors is performance-based, and over 90 percent of compensation paid to portfolio managers is variable, based on investment performance, according to a May press release.

Mendillo also made the company’s “clawback” policy more robust, extending the number of years that compensation is subject to review.

Additionally, HMC’s senior management team’s compensation is now linked to performance of the overall endowment portfolio. Caps have been adopted to limit the amount of compensation a manager receives in any year when the endowment has a negative nominal return.