Gutmann remains among highest paid presidents in Ivy League
Gutmann, who ranks third in the Ivies for compensation, received $1.3M for 2009
November 15, 2011, 9:29 pm·
Penn President Amy Gutmann remains among the highest-paid presidents in the Ivy League.
According to the University’s most recent tax filings, Gutmann received $1,321,040 in total compensation for the 2009 calendar year, the latest time period for which data is available.
Throughout the Ivy League, Gutmann’s salary was third only to Yale University President Richard Levin, whose total compensation package was $1,627,649 in 2009, and Columbia University President Lee Bollinger, who received $1,527,217 for that same time frame, according to tax filings for the respective institutions.
In 2008, Gutmann was the 15th-highest-paid university president in the country, according to the Chronicle of Higher Education’s annual report on executive compensation. An updated list for 2009 compensation at all institutions nationwide will be released before the end of the year.
While Gutmann is in the minority of university presidents whose total compensation exceeds $1 million, her 2009 salary did experience a slight dip from its 2008 total, when she made $1,367,004. This marks a 3.4-percent decrease, and is the first time her salary has dropped since she arrived at Penn in 2004.
Board of Trustees Chair David Cohen — who leads the University Compensation Committee, which assigns yearly salaries for Gutmann and other senior administrative officials at Penn — said the marginal drop “should in no way be interpreted as any dissatisfaction with the president’s performance.”
“I can definitively state that the trustees are enormously pleased with the work Dr. Gutmann does,” Cohen said. “She is, in our view, the best university president in the country.”
Cohen attributed much of the compensation decrease to Gutmann’s decision to forgo any salary increases during the recent economic recession.
Gutmann and the officers and deans of the University did not receive any base-pay increase for Fiscal Year 2010, following a pledge she made in a campus-wide email in December 2008 about Penn’s financial state, Vice President for University Communications Stephen MacCarthy wrote in an email.
FY 2010 ran from July 1, 2009, through June 30, 2010, so it is partially reflected in Gutmann’s salary information for the 2009 calendar year.
The Internal Revenue Service changed the structure of its 990 tax form — which is used by colleges nationwide — after FY 2008, requiring universities to report executive compensation totals on a calendar-year basis instead of a fiscal year.
While Cohen said this change means that any parallels drawn between current and past data “are a bit like comparing an apple to an orange,” Gutmann’s long-term compensation rise remains substantial nonetheless.
Gutmann’s first reported salary as Penn’s president was $767,030 in FY 2005. Her calendar year 2009 salary marks a more than 72 percent increase from this starting point.
Cohen defended Gutmann’s rising compensation.
“I’m not aware of any responsible, knowledgeable person who believes that Dr. Gutmann is being overpaid,” he said. “She presides over an enormously complex institution that includes both a huge Ivy League university and a complicated health system and medical school.”
Cohen added that the Trustees were concerned that Gutmann was placed on the 15th spot of the Chronicle’s 2008 report, “given her extraordinarily high performance in an extraordinarily complex environment.”
He said the compensation committee considers data from peer institutions — among other factors like individual and institutional performance — in assigning yearly salaries.
“Given that there were 30 university presidents who earned more than $1 million in 2008, it would seem unthinkable to us that Dr. Gutmann would not be compensated at a comparable level,” he said.
Chuck McLean, vice president for research at GuideStar — which compiles financial data on nonprofit organizations — wrote in an email that Gutmann’s salary “is far from the highest and far from the lowest in the category” of university presidents.
He added that the median increase in executive compensation, according to a GuideStar report, was 2.4 percent for 2009. In previous years, these increases have generally fallen in the 4 to 5 percent range, he wrote.
Though Gutmann’s salary experienced a slight dip in 2009, others at Penn saw their incomes continue to rise.
Arthur Rubenstein, who at the time served as executive vice president of the University’s Health System and dean of the School of Medicine, remained the highest-paid employee at Penn, taking in a total of $2,492,269 in 2009. This marks an increase from $2,488,811 in the previous calendar year.
Rubenstein has since been replaced by Larry Jameson.
Similarly, Ralph Muller, CEO of the health system, received a total compensation package of $2,389,167, also a slight increase from the previous year’s total.
Cohen, who also sits on the Penn Medicine compensation committee, said it “makes sense” that Rubenstein and Muller were the highest-paid individuals at Penn because “the market supports even higher compensation for deans at large, integrated academic medicine centers and CEOs of big, complicated health systems … than it does for presidents of universities.”
Of the 12 listed officials at Penn who made more than $1 million in 2009, the first eight are all affiliated with Penn Medicine — the umbrella organization created in 2001 to oversee the health system and the medical school.
Cohen added that a significant portion of overall compensation for both Penn Medicine employees and other University administrators comes from incentivized pay.
“Penn is known in the compensation world as having a higher percentage [than peer institutions] of our senior officials being paid pursuant to an annual incentive compensation plan,” he explained.
For example, Chief Investment Officer Kristin Gilbertson, who manages Penn’s endowment, collected about 40 percent of her $1,276,391 in total compensation in 2009 through bonuses and incentives.
During a FY 2009 in which the endowments at peer schools like Harvard and Yale universities plummeted 27 and 25 percent, respectively, Gilbertson helped Penn sustain a relatively small loss of 15.7 percent.
Payment is also divided among a number of other categories in addition to base compensation and incentives, Cohen said.
For instance, Gutmann received $34,895 in nontaxable benefits — which include things like the value of personal use of the president’s house, MacCarthy wrote — in 2009.
In addition to her $897,308 in base compensation, Gutmann also received $365,000 in deferred compensation, which will be paid to her at a later date, and $23,837 in other compensation. Other compensation, MacCarthy wrote, “refers to amounts for expenses, executive life insurance and all other similar taxable payments made directly to the employee.”
Looking back, McLean noted that “it is absolutely the economy” that has caused Gutmann’s overall salary — as well as those of other college presidents nationwide — to decrease.
“At many colleges and universities, faculty pay has been frozen or increased at lower rates than in the past,” he wrote. “A responsible university has to take that into account when it comes to administrative salaries.”