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November 22, 2006

Executive comp rising, Chronicle of Higher Ed reports

Chancellor Mark A. Nordenberg ranks 27th among leaders of public universities nationally in salary and benefits, according to a survey report on executive compensation conducted by The Chronicle of Higher Education.

Nordenberg is among the 42 public institution heads nationally who earn at least $500,000, according to the Chronicle survey.

The Chronicle compiled data, published in its Nov. 24 edition, on compensation of chief executives of 853 institutions nationally, including 183 public colleges and public college systems.

The Chronicle defines total executive compensation as the sum of salary, benefits, annualized amounts of deferred income, the full potential amount of bonuses, retirement pay (the amount contributed by the institution to a CEO’s defined benefit plan) and housing and car allowances.

According to the Chronicle’s online database, Nordenberg’s total compensation package for fiscal year 2006, which ended June 30, was $553,800, including $427,500 in base salary. Nordenberg’s other compensation includes $51,300 in retirement pay and $75,000 in deferred compensation.

The report also noted that Nordenberg is provided with use of a University-owned residence and automobile, but did not assign dollar amounts to those benefits.

This year’s report, for the first time, ranked the top 10 public institution leaders in four categories: base salary, bonus pay, retirement pay and deferred compensation. Nordenberg was No. 7 among public university top executives in terms of retirement compensation with $51,300 in FY06. However, the Chronicle noted that in some states, including Illinois and New York, an employee’s choice between various plans is considered private under public-records laws, so retirement pay could not be determined in all cases.

Nordenberg did not make the top 10 among public institution leaders in the other three categories.

The survey data are the most recent available and in most cases cover 2006-07, the Chronicle stated.

However, Nordenberg’s compensation figures refer to fiscal year 2006, because his FY07 compensation has not been set yet by Pitt’s Board of Trustees compensation committee, which typically does so in December.

Data for four other institutions (the California State University System, the Pennsylvania State System of Higher Education, the University of Virginia and Virginia Commonwealth University) also cover 2005-06 because these institutions had not determined presidential compensation for this fiscal year by the closing date of the Chronicle survey.

Pitt is one of four universities that consider themselves state-related or quasi-private institutions (along with Penn State, Temple and the University of Delaware), and thus are not required legally to provide current salary information.

Pitt fully cooperated with the survey, and provided the latest compensation data available, the Chronicle noted.

Penn State provided the current base salary of its president, but would not disclose any additional compensation, such as retirement contributions.

Temple’s and the University of Delaware’s compensation information was determined from the IRS Form 990 and their figures are for 2004-05.

Last December, Pitt trustees increased Nordenberg’s FY06 salary, retroactive to June 30, 2005, by 3 percent to $427,500 — the figure reported in the Chronicle data. (See Dec. 8, 2005, University Times.)

In addition to his base salary, Nordenberg will receive five annual deferred retention incentive payments on June 30, 2007. The bonus program will give Nordenberg $75,000 for each year of service from July 1, 2002, through June 2007, if he remains as chancellor until that time.

According to the Chronicle survey, the top-paid leader of a public institution was David P. Roselle of the University of Delaware, who earned $979,571 for the 2004-05 academic year. Despite the fact that his salary information was from two years earlier than most other university presidents’, Roselle had the highest base salary — $729,054 — and he earned an additional $250,000 in benefits such as contributions to retirement annuities and deferred compensation.

Second nationally among the publics was Purdue University’s Martin C. Jischke, who is earning $880,950 in total compensation for 2006-07. That includes $406,950 in salary, $74,000 in deferred compensation, a $400,000 retention bonus and use of a house and a car.

Third on the list of publics was Mark A. Emmert of the University of Washington, who is earning $752,700 in total employee compensation for 2006-07. His earnings include $518,700 in salary; $200,000 in deferred compensation; $22,000 in retirement pay; $12,000 for a car allowance, club dues and the use of a house.

Among other Pennsylvania publics, former Temple President David W. Adamany, who retired in June, earned $558,549 in total compensation including $478,100 in base salary, using 2004-05 figures.

Judy G. Hample, chancellor of Pennsylvania’s state system, earned $375,534 — $315,113 in salary — in 2005-06.

Graham B. Spanier, Penn State president, is earning $545,016 in salary (the same amount reported by the Chronicle as total compensation) in 2006-07.

Spanier’s salary places him third nationally among leaders at public universities in the category of base salary, a new comparison in this year’s Chronicle report.

The median compensation for the 183 leaders of public institutions nationally this year is $374,846, which is 4.1 percent higher than last year’s median of $360,000, the Chronicle stated.

Other Pennsylvania higher education presidents earning more than $500,000 in annual compensation are leaders of private institutions: Robert L. Barchi (Thomas Jefferson University), $692,043; Jared L. Cohon (Carnegie Mellon), $511,148; James P. Gallagher (Philadelphia University), $837,158; Amy Gutmann (University of Pennsylvania), $767,030, and Constantine N. Papadakis (Drexel University), $886,279.

Data for private institutions in the Chronicle report were derived from IRS 990 forms and cover 2004-05.

According to the Chronicle, 112 presidents are earning at least $500,000 at the 853 (public and private) institutions nationally in the survey, a jump of 53 percent compared to last year’s survey; however, the report noted the overall number of institutions surveyed increased by 17 percent from 728 to 853, because of changes made by the Carnegie Foundation for the Advancement of Teaching, which were the basis for this year’s categories.

The Chronicle stated, “The growing demands of the college president, as well as the corporate culture that has started to take root among governing boards and college administrators, have contributed to an industry-wide ratcheting up of presidential salaries.”

Other factors in the rise, according to the Chronicle, include: that the increased availability of public information on compensation has raised salary and benefits expectations; that university presidents who change jobs are reluctant to take a pay cut; that more institutions are offering what is known as “golden handcuffs,” that is, the promise of a specified bonus after five years on the job, and that more universities are “poaching” star leaders, luring them with higher compensation.

The Chronicle report can be accessed online by clicking the link “special issues and data” at:

—Peter Hart

Filed under: Feature,Volume 39 Issue 7

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