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University of Pittsburgh

December 6, 2012

Senior administrators’ pay hikes range to 15 percent

The Board of Trustees compensation committee has approved fiscal year 2013 salary increases ranging between 3.3 percent and 15 percent for the chancellor and the University’s officers.

nordenbergThe chancellor’s salary

In a Dec. 4 teleconference meeting, Board of Trustees chairperson Stephen R. Tritch, who heads the compensation committee, had high praise for chancellor Mark A. Nordenberg, acknowledging him as “one of the most senior and successful major university leaders in this country” and citing his contributions to the University, the region and beyond.

In setting Nordenberg’s salary at $580,000, an increase of 3.3 percent, Tritch said, “The compensation committee recognizes that Chancellor Nordenberg’s compensation does remain significantly below a lot of the compensation paid to his peers. This has been confirmed by our consultant’s benchmarking and also according to the reports appearing in the general media.

“That gap is principally a product of the chancellor’s resistance to anything other than modest salary increases. Last year in light of economic challenges facing the University, this committee froze his salary at his request. This year the committee persuaded him to accept some increase. However, he requested that his own increase not exceed the lowest percentage increase awarded to any other officer.”

Tritch said, “In recent weeks some considerable attention has been paid to university presidential contracts, which provide a view, let’s say, that excessive benefits might be going to some of these people. One reason that Pitt retains an independent compensation consultant is to help ensure that we never fit into that situation.

“Chancellor Nordenberg never has been represented by an attorney or other agent and in fact he has no contract as chancellor. Instead he serves at the pleasure of the board. Any negotiating we’ve ever had to do is that the compensation committee regularly believes that he should be paid more than he is willing to take.”

Officers’ salaries

In recommending pay raises for the University’s senior officers, Nordenberg said, “This would have been an extraordinary year for any university under any circumstances,” citing student and faculty achievements, Pitt’s move into the top five universities in the National Science Foundation rankings of total federal research support, Pitt’s Middle States Commission on Higher Education reaccreditation, exceeding its $2 billion fundraising goal and the athletics program’s move to the Atlantic Coast Conference.

“When you consider the circumstances under which we were operating during the last year with extended series of bomb threats and with the threat of the second successive year of deep budget cuts, the accomplishments become even more exceptional,” the chancellor said.

“While the credit does need to be broadly shared, it also needs to be recognized that leadership provided by the senior officers of the University was a critical factor in our success.”

Nordenberg said the officers “worked tirelessly, effectively, and they did play a key role in keeping the University moving forward despite the challenges it was facing.”

Nordenberg said his recommendations for most of the officers’ pay increases reflected this year’s faculty salary increase percentages.

In July, Pitt trustees approved a 3 percent employee salary increase pool. (See July 26 University Times.)

Staff salaries were not discussed in detail as part of the compensation committee meeting, but Nordenberg noted that the average faculty salary increase was 3.7 percent.

In addition, nearly 15 percent of the faculty received raises of 5 percent or more and nearly 5 percent received increases of 10 percent or more, Nordenberg said.

With the exception of Chief Investment Officer Amy K. Marsh and Provost and Senior Vice Chancellor Patricia E. Beeson, both of whom received double-digit raises, Nordenberg’s recommendations for senior officers’ raises were close to the 3.7 percent faculty average.

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Marsh, who had been the target of a recruitment effort earlier this year, received the largest increase. Her 15 percent raise brings her FY13 salary to $405,000.

In recommending Marsh’s pay increase, Nordenberg told the committee, “In her 13 years at the University, she really has transformed our endowment portfolio. The team that she leads has consistently posted strong endowment returns. And she also has shouldered the additional responsibilities of serving as treasurer and has discharged those responsibilities with consistent effectiveness.

“The resulting salary after that increase will keep her within a reasonable range in terms of the benchmarking that we do — benchmarking that, in her case, is largely tied to the chief investment officers managing endowments of roughly the size of Pitt’s.”

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Beeson received a 10 percent increase, bringing her salary to $374,000.

Nordenberg said, “Provost Beeson has been performing at exceptionally high levels. In fact, I would say it would be hard to imagine anyone having a better record of performance in the first two years in a demanding job like this than she has had.”

In recommending her increase, Nordenberg told the committee, “When we named Provost Beeson to her current position, we deliberately set a salary that was well beneath the median, reflecting the fact that she was new to this position and this position involved a far broader scope of responsibility than she had shouldered in the past.

“We also did that knowing that we would have to make adjustments as time passed, particularly if she was performing at the high levels we anticipated would characterize her service. Otherwise she would fall so far below the median that it would be difficult for us ever to recover.”

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Increases of 3.8 percent went to Jerome Cochran, executive vice chancellor and general counsel; B. Jean Ferketish, Board of Trustees secretary and assistant chancellor, and Arthur G. Ramicone, chief financial officer.

Cochran’s FY13 salary was set at $493,000, Ferketish’s at $216,000 and Ramicone’s at $357,000.

Arthur Levine, senior vice chancellor for the Health Sciences and dean of the School of Medicine, received a 3.3 percent increase, which raised his FY13 salary to $787,500.

The pay increases for the chancellor and the officers are retroactive to the July 1 start of the fiscal year.

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In other business, the committee:

• Approved a professional services agreement between UPMC and the University regarding the senior vice chancellor for the Health Sciences.

Nordenberg said, “As both the University and UPMC have expanded their global activities, employees — particularly from the Schools of the Health Sciences — sometimes have been retained by UPMC to provide professional services in connection with international initiatives and have received payment for those services.

“In some recent years, the senior vice chancellor for the Health Sciences and dean of the School of Medicine has provided such services and received such compensation.”

Nordenberg said he always had approved those arrangements in advance, adding that they had been discussed in advance by the Board of Trustees chair and reported to the compensation committee.

“As Pitt and UPMC have looked at the possibility of such payments in the future we have both decided that we would like to regularize the structure for any such payments in a somewhat different way with the expectation that, if such payments are to be made, they would be made directly by the University, subject to reimbursement by UPMC,” he said.

“This seemed to be a more appropriate arrangement since the senior vice chancellor is an officer of the University and also does serve as a director of UPMC.”

Nordenberg clarified that the agreement applies only to the senior vice chancellor for the Health Sciences. “It does not apply to other faculty in the Health Sciences,” he said.

• Authorized Tritch to review benefits for Pitt’s senior officers “and to effect any changes that may be appropriate.”

Nordenberg elaborated on the resolution: “There was a desire to undertake a periodic review of executive benefits, including insurance provided to senior officers of the University.

“It was the belief of the committee that such a review should be undertaken with appropriate professional assistance by the chairperson.”

• Approved its mission statement, which will be recommended for approval at the next full board meeting.

—Kimberly K. Barlow

Filed under: Feature, Volume 45 Issue 8

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