Penn President Amy Gutmann is moving up the ranks of the highest-paid college presidents in the nation.
According to The Chronicle of Higher Education’s annual report on executive compensation — which was released over winter break — Gutmann’s salary of $1,462,742 in 2010 made her the 12th-highest-paid private university president in the nation. This marks a substantial increase from last year’s report, in which Gutmann finished 20th on the Chronicle’s list.
Gutmann also held her spot as the third-highest-paid Ivy League president in 2010, finishing behind Columbia University President Lee Bollinger and Yale University President Richard Levin, who made $1,932,931 and $1,616,066 during the same time frame, respectively.
Because of lag times in reporting requirements for Internal Revenue Service tax filings at nonprofit institutions like Penn, 2010 is the latest year for which salary information is available.
Gutmann also finished as the highest-compensated private university president in Pennsylvania. Last year, former Drexel University President Constantine Papadakis’ total package of $4,912,127 — most of which consisted of deferred compensation paid to his family following his April 2009 death — made him the highest-paid president in the state.
Papadakis was also the highest-paid private college president nationally in 2009. The top-paid president in 2010, according to the Chronicle’s report, was former New School President Bob Kerrey, who collected $3,047,703.
Gutmann’s annual compensation has risen markedly since she first came to Penn in 2004. Her most recent salary of nearly $1.5 million marks a more than 90-percent increase from her first reported compensation package of $767,030 in 2005, according to the University’s tax filings.
Board of Trustees Chair David Cohen — who heads the compensation committee that determines Gutmann’s salary on an annual basis — said last semester that “we continue to believe that Penn is fortunate to have the best university president in the country in Amy Gutmann. We want to make sure that her compensation reflects the complexity of the job she holds.”
Gutmann’s salary has, at times, been a source of ire among some members of the University community. 2012 College graduate Meg Hlousek wrote an open letter in a fall 2011 issue of The Daily Pennsylvanian that was later endorsed by members of Occupy Penn calling Gutmann’s salary a “disgrace” to lesser-paid workers at the University and in Philadelphia.
However, Chronicle senior reporter Jack Stripling — who worked on this year’s compensation report — said there is little doubt that Gutmann could make significantly more than she does at Penn if she were to move into the private sector.
Gutmann “is a hot commodity right now in higher education,” Stripling said. “Anyone who has risen to the highest level of a top-tier institution like Penn invariably has skills that would benefit them well in the private sector, where they would undoubtedly be paid more.”
To combat the potential of college presidents leaving for private sector jobs, Stripling explained, institutions will often designate a substantial portion of a president’s salary as deferred compensation. If a president leaves a university earlier than their contract calls for, then they risk not being able to collect their deferred compensation.
Gutmann received $477,000 in deferred compensation in 2010 — a total that represented more than 30 percent of her overall package and an increase from $365,000 in 2009.
Designating such a significant amount of Gutmann’s salary as deferred compensation “is effectively creating a set of golden handcuffs for her,” Stripling said. “The board is essentially making it harder for her to leave from a financial standpoint.”
While Mark Borges, a principal consultant at compensation consulting firm Compensia, agreed that compensation committees often create these golden handcuffs through deferred compensation, he questioned the extent to which this motivates university presidents to remain at or leave their school.
“I’m not sure that individuals at higher education institutions are driven by compensation in the same way as the private sector,” he said, explaining that there is generally more stability in positions of higher education leadership than in the private sector.
Although Gutmann’s 2010 salary was among the highest among university presidents in the nation, she was hardly the highest-paid University employee during that time. Arthur Rubenstein, who then served as executive vice president of the University of Pennsylvania Health System and dean of the Perelman School of Medicine, took that honor, collecting $2,655,263 in 2010.
Paul Dorf, managing director of Compensation Resources, Inc., said it is common for the top-paid employee at a large research university like Penn to come from a hospital setting.
“That’s around what I’d expect to see at a school like Penn,” he said.
The salaries of top-paid University employees during 2011 will be available in summer 2013, when Penn’s tax filings will next be released.