The Board of Directors of the Nobel Foundation met yesterday and announced that: The Size of the Nobel Prize Is Being Reduced to Safeguard Long-Term Capital:
They explain:
Worth checking out: the Nobel Foundation's annual report for 2011 (warning ! dreaded pdf format !), where you can see the actual numbers -- notably:
At its meeting on June 11, 2012, the Board of Directors of the Nobel Foundation set the amount of the 2012 Nobel Prizes at SEK 8.0 million per prize, at today's exchange rate equivalent to USD 1.1 million.This is not the first time the prize-amount has been decreased -- beginning with a nominal value of SEK 150,782 in 1901 (worth 8,123,951 in 2011 SEK) the nominal value has been as low as SEK 121,333 (2011 SEK: 2,370,660) in 1945 -- but it's been uphill or stable since then, peaking at an SEK-2011 value of 11,659,016 in 2001. The real value has been declining steadily since then (interrupted by a brief up-tick in 2009); see all the prize amounts here (warning ! dreaded pdf format !) .
They explain:
The decision to lower the prize sum, from SEK 10.0 to 8.0 million, is related to the assessment that the Board of Directors makes today of the potential for achieving a good inflation-adjusted return on the Nobel Foundation's capital during the next several years. Another part of the picture is that during the past decade, the average return on the Foundation's capital has fallen short of the overall sum of all Nobel Prizes and operating expenses.I.e. they've not been doing quite so well with their investments -- no wonder (and high time) that: "During the autumn, the Foundation began the task of gradually reducing the number of managers from the existing 35 or so to a benchmark of around 20".
Worth checking out: the Nobel Foundation's annual report for 2011 (warning ! dreaded pdf format !), where you can see the actual numbers -- notably:
Book profit amounted to SEK -19.2 m (68.0). The year's deterioration in earnings was mostly attributable to portfolio changes in the equities asset class, which showed a net realised change in value of SEK 19.8 m, compared to SEK 83.6 m in 2010.Indeed, all those managers can't just blame lousy market conditions, as they seem to have done a pretty lousy job, underperforming the market by quite a bit:
The return on the Nobel Foundation's total equities portfolio was -9.3 (8.7) per cent. This was worse than the benchmark index , which fell by 5.1 per centStill, the prestige of winning the prize seems just as high as always -- and SEK 8,000,000 is nothing to sneeze at either.