MAKING A MILLION
At private colleges and universities, presidential pay is up — and so is membership in the millionaires’ club
Private college and university presidents in office at least two years saw their annual earnings rise on average by 9 percent, a new national survey finds.
But the survey’s authors were struck more by this: Leaders pulling down $1 million and up — the proverbial millionaires’ club — spiked in number by nearly half among those campuses, to 58 presidents from 39 the previous year.
The finding is part of The Chronicle of Higher Education’s latest yearly analysis of private campus compensation. Released Sunday night, the data from 500 institutions covers calendar year 2015 and is based on the most current federal tax filings available.
“The number of presidents earning over $1 million is unusually high,” said Dan Bauman, database reporter for The Chronicle. “We attribute that, in part, to a market where presidents are negotiating more deferred compensation and bonus packages before they take the job.”
In fact, 9 of the 10 highestpaid leaders received more earnings from bonuses and deferred compensation packages than from base pay. Those deferred packages, some spanning 10 years, were paid out fully in 2015.
These packages, often used as an inducement to keep leaders in office, are not a new phenomenon. What’s not clear is whether this spike is a fluke or part of a larger trend.
It may reflect increasing willingness by schools to open their coffers as the economy has improved, the graying of the college presidency, or other factors, Mr. Bauman said.
At a time when many private campuses are struggling with enrollment and financial losses, fat paychecks inevitably fuel debate.
Skeptics may view the deferred packages as a way to “camouflage” what leaders actually make most years, Mr. Bauman said. He said some are liable to question if “these tax-exempt institutions are truly living up to that label” when they offer multimillion dollar payouts.
Others, including trustee boards, will argue that it’s a necessary tool to discourage the departure of successful and hard-to-replace leaders who have enormous responsibilities, from overseeing hospitals on some campuses and billion-dollar fundraising campaigns to elaborate strategic plans spanning a decade.
“They will argue that it sort of keeps the vision going,” Mr. Bauman said.
The 9 percent increase in this year’s survey slightly outpaced the 8.6 percent increase in average compensation gains reported last year. It means the average earnings for a president in office all of 2015 and 2014 grew to $569,932.
The highest compensated president in the survey for 2015 was Nathan Hatch, Wake Forest University’s president. His total earnings topped $4 million — $4,004,617. The Chronicle said that figure was driven largely by $2.89 million in deferred compensation accrued over a decade but paid out in 2015.
Next highest was Emory University’s James Wagner at $3,510,451. On top of $990,000 in base pay, he, too, had a 10-year deferred compensation agreement, worth $2.36 million, The Chronicle reported.
Also among the top five highest paid presidents in total compensation were C.L. Max Nikias of the University of Southern California, with $3,182,364, including base pay of $1,170,277; the University of Pennsylvania’s Amy Gutmann with total compensation of $ 3,086,395, including $1,259,172 in base pay; and Robert Zimmer of the University of Chicago with total compensation of $ 2,864,887, including $1,056,288 in base pay. The Chronicle noted that those three are perennial earners in its survey. In Pennsylvania, after Ms. Gutmann, the highest paid campus leader was Stephen Klasko of Thomas Jefferson University in Philadelphia with total earnings of $ 1,944,932, including $1,338,050 in base pay; Drexel University’s John Fry with $1,913,914 in total compensation and $758,207 in base pay; and Carnegie Mellon University’s former president, Subra Suresh, who resigned last summer but made $1,205,311, including $775,507 in base pay. Mr. Bauman noted that presidents on the other financial extreme, accepting no pay at all, often lead religious institutions. The survey found six who did so in Pennsylvania, including Brother Norman Hipps at Saint Vincent College. To do its analysis, The Chronicle collected the most current available federal IRS Form 990s filed by 500 private, nonprofit colleges that have the biggest endowments. In total, the survey covered 568 presidents who were in office all or at least part of the2015 calendar year. The year-over-year average change was based on 352 presidents, The Chronicle said. The Chronicle looks at public campus compensation in a separate survey, expected to be released in the spring.