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January 8, 2003

Chancellor awarded 3 percent pay hike

Pitt trustees have increased Chancellor Mark A. Nordenberg’s salary to $401,500 — a raise of 3 percent over his fiscal year 2003 salary.

In addition, the trustees’ compensation committee approved raises ranging from 3 percent to 5.9 percent for six other Pitt senior officers, per recommendations by Nordenberg. S

In addition to his base salary, Nordenberg also was awarded the second of five deferred retention incentive payments of $75,000 under a bonus program instituted last year by then-Board of Trustees chairperson William S. Dietrich II. The bonus program will give Nordenberg $75,000 a year through June 30, 2007, if he doesn’t leave his job or isn’t dismissed for cause before then.

Provost James V. Maher, Executive Vice Chancellor Jerome Cochran and Arthur G. Ramicone, vice chancellor for Budget and Controller, will receive deferred bonuses of $50,000 per year under the same conditions.

(About one quarter of U.S. colleges and universities give their CEOs some type of deferred compensation, according to a recent survey by the Washington, D.C.-based American Council on Education.)

In addition to salaries and deferred bonuses, Pitt senior officers also receive executive benefits that include: an automobile for personal and business use by the chancellor and by other officers as determined by the chancellor; personal liability insurance coverage of $5 million; group term life insurance and accidental death and dismemberment insurance policies, each in the amount of $50,000, plus three times salary rounded up to the next higher thousand (for each policy, officers may buy additional insurance so long as the plan maximum of $1 million — excluding the $50,000 basic policy — is not exceeded); up to $5,000 per year for health care expenses not covered by basic insurance; a maximum of $5,000 per year for tax preparation and financial planning services, and initiation fees and monthly dues for clubs where officers can entertain prospective donors and business associates.

The officers’ new compensation packages are retroactive to July 1, the beginning of Pitt’s fiscal year. The operating budget approved by the Board of Trustees at its October meeting included a 3 percent salary increase pool for faculty and staff.

The Dec. 15 meeting of the trustees compensation committee was held via a 10-minute conference call coordinated in 159 Cathedral of Learning, and “broadcast” by speakerphone to reporters in attendance.

At the meeting, trustees praised the performance of Pitt’s leadership team since 1995, when the board appointed Nordenberg as interim chancellor.

Compensation committee member Thomas Bigley said, “How fortunate we are to have this leadership team with you as our leader,” referring to Nordenberg. “We’re pleased Mark is happy here and we hope he stays with us for a long time.”

In a statement released at the meeting, the trustees cited several areas of progress between 1995 and 2003, including:

  • A 120 percent increase in freshman applications.
  • An increase in the percentage of enrolled freshmen ranked in the top 10 percent of their high school graduating classes from 21 percent to 43 percent.
  • Growth from $230 million to $510 million in annual sponsored research support.
  • A 140 percent increase in private contributions, from $39 million to $94.5 million.
  • The most ambitious period of construction and renovation in Pitt’s institutional history.
  • Leadership in community development as evidenced by Pitt’s role in regional initiatives such as the Pittsburgh Digital Greenhouse and the Pittsburgh Life Sciences Greenhouse.
  • A rebirth of Pitt athletics both in competitive strength and in audience attraction.

According to board chairperson Ralph J. Cappy, “Many people should share in the credit for Pitt’s remarkable progress. They include, in particular, members of the faculty and staff. However, this also is a case in which effective leadership has helped transform an institution. In fact, the senior management team assembled and led by Chancellor Nordenberg has played a major role in one of the great turnaround stories in American higher education. One of our board’s principal responsibilities is to retain and properly reward this outstanding group.”

Pitt spokesperson Robert Hill said that both the board and Nordenberg have indicated that he will stay on as chancellor at least through the 2007 fiscal year.

In commenting on the compensation committee’s action, Nordenberg stated, “I am grateful for the board’s strong expression of continuing confidence and support. Working together, we have accomplished a great deal over the course of the last eight years, and I fully expect 2003-04 to be another year of outstanding progress for the University of Pittsburgh.”

Referring to the other administrative officers, the chancellor added, “I would match them and their performance contributing to the advancement of this University against any similar team in the country.”

Commenting on the senior officers’ raises, University Senate President Nicholas Bircher told the University Times that the raises were in line “with our truly comparable institutions and with the Consumer Price Index. I think for the purposes of maintaining the same leadership team — which I think is fairly important at this point in our history — that the board made a reasonable set of decisions this year. We would not, for example, want to lose Chancellor Nordenberg because some other institution offered him substantially more money and he took it.”

Staff Association Council (SAC) President Rich Colwell said, “I haven’t heard anything derogatory from staff regarding the upper administrators’ annual increases. In fact, 3 percent reflects what was approved for faculty and staff rated above satisfactory performance. The chancellor receiving a 3 percent raise is very much in line with the rest of the University community who performed meritoriously. However, for many staff, a 1-3 percent annual raise will not offset the increase in health care or the cost of living increase.”

Colwell added that SAC, which is represented in Pitt’s budget process, will propose more substantial salary increases for staff in the next budget cycle.

Last year, the chancellor was awarded a 13.9 percent increase in base salary plus the five-year deferred incentive bonus package, the result of what Hill described as “a catch-up year to increase [officers’] salaries to competitive levels,” where trustees tried to close the gap between Pitt senior administrators’ compensation and that of senior officers at peer universities.

That gap was documented through a study by the consulting firm Towers Perrin of university executives’ compensation, commissioned by the Board of Trustees in July 2002.

—Peter Hart                     


Filed under: Feature,Volume 36 Issue 9

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