In light of budgetary pressures, the University is taking steps to reduce expenditures, including freezing the base-pay of all top University officials, Penn President Amy Gutmann announced yesterday.
In a letter e-mailed to members of the Penn community, Gutmann outlined measures the University will take in response to budgetary constraints related to the country's economic problems.
The letter stated that Gutmann and all of the vice presidents, deans and senior officers will not receive base-pay raises for 2009-2010.
"Given the economic pressures, this is a way of contributing to the University remaining strong over the next fiscal year," Gutmann said shortly before the letter was sent.
She added that the salary freezes will help prevent Penn from firing people while still preserving the quality of education.
Gutmann currently earns just under $1.2 million each year after receiving a 41-percent pay increase last year.
Other measures the University will take to cut costs include discontinuing bonuses that are not part of established compensation plans, reducing the use of temporary staff members and only hiring people for vacant positions if it is essential for those positions to be filled, Gutmann wrote in the letter.
She added that each of Penn's schools and centers have been asked to take measures to reduce their individual spending.
This includes non-compensation expenditures - like travel and professional conference participation - and only proceeding with capital projects that are already fully funded or are of pressing importance and have a funding strategy.
Some of Penn's peer institutions are also making efforts to reduce costs due to recent economic problems.
On Tuesday, Stanford University announced that its President and Provost will each take immediate 10-percent reductions in their salaries, and many other top officials also volunteered to take salary reductions.
Brown University recently announced a hiring freeze on all staff, something Gutmann emphasized Penn is not doing.
Gutmann and her husband, Columbia Law professor Michael Doyle, recently donated $100,000 to the Center for Undergraduate Research and Fellowships and the senior-class gift program. However, she said they decided to make this donation last October and that it had nothing to do with the economy.
Experts said University presidents feel a need to take responsibility during difficult economic times, which could be a reason for pay freezes and reductions.
"Presidents as leaders know that during tough times, it's important to keep morale up," said Tony Pals, a spokesman for the National Association of Independent Colleges and Universities.
Raymond Cotton, a partner at a Washington D.C. law firm that specializes in higher-education compensation issues, had a similar opinion, saying that as the "personification of the University," presidents feel a need to be sensitive to the economic issues their institutions experience.
