Though former University President Judith Rodin no longer inhabits the presidential suite in College Hall, her presence still lingers on the most recently released Internal Revenue Service 990 forms -- documents identifying executive compensation figures from fiscal year 2003.
Rodin's total salary, including deferred compensation and employee benefits, reached $893,213 during the period from July 1, 2002 to June 30, 2003, versus her package of $845,474 from the previous year. In fiscal year 2002, Rodin was the third highest paid university president in the country.
Executive compensation is an issue that the University spends much time deliberating over, according to Penn officials.
"We have a very detailed, documented process -- one that moves in a strategic fashion from planning to management," University spokeswoman Lori Doyle said.
The compensation committee is led by the University trustees and also relies on the expertise of an independent consulting firm, Hay Group.
The group, which meets three to six times a year, "establishes performance-based incentives" that allow the committee to "come back at the end of the year and see how [University employees] did compared to those organizational goals," said Jack Heuer, vice president for human resources.
On a more general level, the employees' "experience, knowledge, skills and abilities" contribute to the value of their financial package, according to Heuer.
But though Heuer stated that both "overall institutional success" and "individual performance" are taken into account when assigning raises, Penn's budgetary restrictions triumphed that general formula for fiscal year 2005.
"The compensation plan for 2005 included a salary freeze for the University's senior leadership," Doyle said of the initiative, which will affect approximately 40 to 50 top administrators.
"It was all part of an effort to save more than $14 million in this fiscal year without the use of layoffs or early retirement incentives," she added.
However, the state of Penn's budget does not automatically determine salary figures -- external factors are also taken into account.
"The University compares itself to many different markets," Heuer said. Similar to the U.S. News and World Report's rankings battle, Penn must acknowledge what institutions such as Columbia, Princeton and Georgetown universities are offering their employees.
"We compete against our peer institutions on the academic side," President Amy Gutmann said. "I think we need to be guided by what it takes to recruit and retain the best people."
Heuer said that Penn aims to be in the middle to upper-middle of the pack.
"The compensation committee's philosophy is to target salaries anywhere between the 50th and 75th percentile," he said.
Whereas many of the University's chief academic officers' compensations are compared to those of other mission-based organizations' packages, "the [University] Health System competes directly with the for-profit sector," Doyle said.
Arthur Rubenstein, who serves as executive vice president of Penn's Health System and dean of the Medical School, received $1,271,245 in compensation and benefits in 2003. And Robert Martin, who served as chief executive officer of the University Health System until June 2003, received $2,930,424 for that fiscal year.
"It's expected, and it's common, for the head of a university health system to make more than a university president," Doyle said. "Salaries may seem high, but not when you consider their counterparts in private industry."
Because the typical salaries of private industry positions are generally much more attractive than the packages that universities can offer, Doyle said that many of Penn's top officers stay at Penn for the experience, not the money.
"Most administrators here are well aware that they could make significantly more money in the private sector," she said. "They stay because ... they're committed to the mission of the organization."
