Gutmann remains third-highest paid president in Ivy League
The president's salary increased by nearly 11 percent
September 9, 2012, 8:00 pm·
Leslie Krivo-Kaufman | DP
Penn President Amy Gutmann held her standing in the 2010 calendar year as one of the highest-paid presidents in the Ivy League, according to the University’s most recent tax filings.
Gutmann received $1,462,742 in total salary in 2010, the most recent year for which data is publicly available. This marked a 10.7-percent increase from her compensation package of $1,321,040 in 2009.
Only Columbia University President Lee Bollinger and Yale University President Richard Levin, who made $1,932,931 and $1,616,066, respectively, earned more than Gutmann in 2010. The average salary of an Ivy League president during that time was $1,198,991.
Gutmann’s salary is determined annually by the compensation committee of the Board of Trustees. Board of Trustees Chair David Cohen, who heads the committee, explained that Penn, “as a philosophical matter, believes heavily in incentive-laden compensation.”
Gutmann’s salary is structured so that a significant portion of her total compensation annually is risk-based, Vice President for University Communications Stephen MacCarthy said in an email.
The incentive-based components of her contract are not paid out unless specific objectives set by the compensation committee are met. These objectives could include things like the success of the University’s Making History fundraising campaign, recruitment of new faculty and increased access for low-income families, MacCarthy said.
In 2010, Gutmann’s total deferred compensation — which includes her incentivized pay — was $477,000, accounting for more than 30 percent of her overall compensation package. This also marked an increase from $365,000 in deferred compensation from the year before.
“We continue to believe that Penn is fortunate to have the best university president in the country in Amy Gutmann,” Cohen said. “We want to make sure that her compensation reflects the complexity of the job she holds.”
In 2009, Gutmann’s salary dipped slightly from the previous year’s total, from $1,367,004 to $1,321,040 — the first time since she came to Penn in 2004 that her compensation dropped. Cohen said in an interview with The Daily Pennsylvanian last year that the decrease had nothing to do with Gutmann’s performance, but was rather a sign of the economic times.
Similarly, he said that her most recent salary report is not reflective of her performance, but rather an indication that the economy is back on track, at least in the executive compensation realm.
“I think it’s unusual for executive compensation to go down,” he said. “I think the anomaly was in the reductions in compensation last year, which was driven by the economy and the fact that 2008 to 2009 was the most severe recession we’ve faced since the Great Depression.”
Gutmann’s salary has risen substantially since she first came to Penn. Her first year at the University — fiscal year 2005 — saw her collect a total of $767,030. Gutmann’s 2010 compensation represents a more than 90-percent increase from that starting point.
Whereas Penn used to report compensation totals on a fiscal-year basis, it has been required since 2008 by the Internal Revenue Service to report salary data according to the calendar year. Penn’s fiscal year runs from July 1 through June 30.
Paul Dorf, managing director of Compensation Resources, Inc. — which advises companies and universities on compensation-related matters — said he was not surprised by Gutmann’s salary increase in 2010.
A school like Penn “is essentially a business,” he said. “You’ve got thousands of employees, hundreds of millions of dollars of revenue. It’s like a big business, and it makes sense that she’d be paid like that.”
Gutmann was the 20th-highest-paid college or university president in the nation in 2009, according to The Chronicle of Higher Education’s annual report on executive compensation. The Chronicle’s 2010 report is due out later this fall.
Though Gutmann’s salary is substantial, it is hardly the largest at the University. In 2010, Arthur Rubenstein, who at the time served as executive vice president of the University of Pennsylvania Health System and dean of the Perelman School of Medicine, earned the title of Penn’s highest-paid employee with a total package of $2,655,263.
Rubenstein has since been replaced by Larry Jameson.
Overall, there were 11 Penn employees, including Gutmann and Rubenstein, who made more than $1 million in 2010. Most work for Penn Medicine, which is the organization created in 2001 to oversee both the health system and the Medical School.
Last year, Gutmann’s salary was the source of ire for some Penn students. Following a report on her compensation package, 2012 College graduate Meg Hlousek wrote an open letter in The Daily Pennsylvanian that called Gutmann’s salary a “disgrace” to lesser-paid workers at Penn and in the city.
“President Gutmann, as someone who has paid your tuition fees, who has read your academic literature … I am outraged by your financialization — your dystopiazation — of this University, starting with your income statement,” she wrote.
The letter was later endorsed by members of Occupy Penn — a student group that was created as an offshoot of the Occupy Wall Street movement.
At the time, Cohen dismissed those concerns, saying that he was “not aware of any responsible, knowledgeable person who believes that Dr. Gutmann is being overpaid.”
Last year’s controversy aside, Cohen said he is looking forward to seeing what Gutmann brings to her years ahead at Penn.
“Her performance has been superb, and we’ve been extremely lucky to have her,” he said. “We think her compensation should reflect that.”