New Man for the Club

The managers of U.S. big business who earn more than half a million dollars a year belong to an exclusive club whose membership is hardly more than a dozen or two. Among them, the man who presides over Massachusetts Investors Trust, the nation's oldest and second largest mutual fund, receives one of the fattest paychecks.

The M.I.T. chairman gets more than $360,000 in a moderately good year, plus another $200,000 for doubling as boss of the sister fund, Massachusetts Investors Growth Stock Fund. (Though generous, this is still well below General Motors Chairman. Frederic Donner, who made $800,000 in 1964.) Starting soon, the huge M.I.T. check will be made out in the name of a new man. Last week the fund announced that Kenneth L. Isaacs, 60, M.I.T.'s vice chairman for the past eleven years, will succeed Dwight P. Robinson Jr., 65, as board chairman.

Slim Staff. Salaries at M.I.T. are based on a percentage of total assets and income--and both assets and income have been rising steadily. Since 1959, the fund has increased its total assets by 25% to $2.1 billion, and the value of shareholders' investments and reinvested dividends has risen more than 36%. The fund even rode out the 1962 market slump with a minimum of damage because of its cautious policy of investing in reliable, high-quality stocks. Despite the company's bigness, M.I.T.'s billions are still tended by only five trustees, ten senior investment analysts, and a home office work force of 39 (including messengers). Result: the cost of managing the fund is a bare $1.80 per $1,000 of assets, which M.I.T. claims is the lowest operating cost of any mutual fund.

Isaacs will make few changes in the way M.I.T. is run, since he has participated in all the major decisions that have set the fund's management style and investment policy. At Lehigh ('25) he got an engineering background; he now keeps personal watch on M.I.T.'s railroad, metal and mining investments. He has an exemplary record as a Harvard Business School grad, a Wall Street banker, and as the manager of Cornell's endowment investments be fore joining M.I.T. in 1936 as an investment analyst. Within a year, he was made a full trustee. Isaacs is mostly responsible for recruiting M.I.T.'s young and bright research staff.

Rising Competition. Isaacs, low-spoken and affable, is very much a part of the Boston establishment: his clubs include the Somerset, the Dedham Country and Polo and the Tennis & Racquet. He lives with his wife, who is a portrait painter, and their two children on a 500-acre farm near Boston. Besides his M.I.T. duties, he serves on several boards, carefully cultivates the fund's ties with the business community. Though he feels that rising competition is one of the main problems he will face as chairman, he also sees in it a bright side for M.I.T. The entry into mutual funds by Sears Roebuck and other companies, he says, means that mutual funds will inevitably become better known. Isaacs is sure that M.I.T. will benefit.

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