For the first time, Penn President Amy Gutmann is the highest-compensated University employee.
Gutmann received a compensation package of $2,820,452 in fiscal year 2013 — which lasted from July 1, 2012 to June 30, 2013 — according to the University’s most recently available tax filing.
Long among the ranks of top-paid private university presidents, Gutmann’s salary in previous years did not top the list of salaries distributed by Penn. Last year, Ralph Muller, CEO of Penn Health System, made the most of any Penn employee. In the most recent data, he was the second-highest-paid, with a compensation package of $2,377,576.
Gutmann’s compensation marks a 35 percent jump from her fiscal year 2012 package of $2,091,764. Although this increase does not quite match the 43 percent jump between fiscal years 2011 and 2012, it remains consistent with the upward trend in Gutmann’s salary since her arrival at Penn a decade ago.
Due to the timing of the Internal Revenue Service’s reporting requirements, fiscal year 2013 is the most recent year for which compensation totals are available.
Gutmann’s most recent package comprises a nearly 270-percent increase from the $767,030 package she received her first year at the University in the 2005 fiscal year. Gutmann — who came to the helm in 2004 — received about 286 percent of the $986,915 that her predecessor Judith Rodin made during her tenth and final year as Penn president.
“We believe this compensation structure has given us the most effective university leadership team in the country,” said David Cohen, chair of Penn’s Board of Trustees, in an email. “We have people here who are smart and competitive; people who want to succeed and are willing to be judged by the outcome of their work. That is a formula that breeds success.”
Gutmann and other senior administrators’ salaries are designated by a committee of the Board of Trustees, which takes into account compensation at peer institutions, the input of a third-party consultant and assessment of performance by the individual, said Cohen, who chairs the Trustees’ Compensation Committee.
However, Gutmann’s salary is unlikely to continue to rise at such a high rate, compensation consultants said.
“You can’t keep escalating at that level forever,” said Tom LaWer, a 1988 Wharton graduate and principal at Compensia, Inc. “[Gutmann] is getting to the top end of the market range.”
Compensation consultants agree that performance is vital in determining compensation among university presidents.
“It is a huge job running a university — there are many tentacles,” said Paul Dorf, chairman of consulting firm Compensation Resources. “The individuals are well-compensated for what they do.”
Penn also has to keep pace with pay at peer institutions to retain talent, said Mark Borges, another principal at Compensia, Inc.
“The fact that she’s been there for a significant period of time probably reflects the quality of her performance,” Borges said of Gutmann, whose current term will last through 2019. “She’s probably getting steady increases because the board is happy with her performance.”
Although the 2013 tax filings of peer institutions are not yet available, Gutmann has claimed an unwavering spot among the top-paid private university presidents.
In last year’s tax filings, Gutmann was the second-highest-paid Ivy League president, behind only Columbia University’s Lee Bollinger. In previous years, she ranked third among the Ivy presidents, behind Bollinger and Yale’s Richard Levin, who has since stepped down.
A report by the Chronicle of Higher Education ranked Gutmann as the sixth-highest compensated private university president in 2011 — and the highest-paid woman on the list — with Robert Zimmer of the University of Chicago claiming a hefty $3,358,723 compensation package and the top spot. Only six private university presidents, including Gutmann, received compensation packages greater than $2 million, according to the report.
The report also listed each president’s compensation per $1 million in total expenditures. Gutmann ranked the lowest among the top 20 highest-paid presidents, with $376 of compensation per million dollars of total expenditures.
Gutmann’s base pay comprised 51.5 percent of her total compensation in 2011, according to the Chronicle’s report — the highest among the top eight. In fiscal year 2013, her base pay fell to 39.8 percent of her total salary.
Gutmann’s base salary grew 4.2 percent from $1,078,016 in 2011 to $1,123,376 in 2012, a much smaller increase from the 17.9 percent jump in base salary between 2010 and 2011 — from $914,724 to $1,078,016.
This shift aligns with the conclusion of the Making History fundraising campaign, which concluded at the end of 2012 and raised $4.3 billion — $800 million more than the original campaign goal of $3.5 billion. In 2012, Gutmann received $942,500 in bonus and incentive compensation.
“As I have said in the past, the Trustees feel strongly that we have the best university president in the country in Amy Gutmann, and we believe her compensation should reflect that,” Cohen said.
The third highest-paid employee, after Gutmann and Muller, was Larry Jameson, dean of the Perelman School of Medicine and executive vice president of UPHS. Also among the top earners were several surgeons affiliated with Penn Medicine.
It is not unusual for the head of a health system to make more than a university president, largely due to the complexity of a hospital system.
The high demand in running a health system is not unlike running a university, Borges said.
“These are some of the most difficult jobs in the country because you have to play so many roles simultaneously,” he said. “If you’ve got someone there for an extended period of time it generally means they’re good at their job.”