The recently released executive compensation figures for the 2008 fiscal year - which began on July 1, 2007 and ended on June 30, 2008 - were as expected, with no University officials receiving surprising increases in compensation.
Following her 41 percent pay raise in the 2007 fiscal year, Penn President Amy Gutmann received an 11 percent pay increase for fiscal year 2008 after compensation decisions were completed in June 2007.
Of Gutmann's total compensation of $1,279,819, she earned $825,000 in base salary, a 10 percent increase from the year before. Gutmann also took in $400,103 in benefits, including a $239,750 performance-based incentive payment that will be given to her when she retires.
University spokeswoman Lori Doyle confirmed that President Gutmann and the officers of the University will not receive any base-pay increase for the 2010 fiscal year, as per the pledge made by Gutmann in a University-wide e-mail last December concerning the financial state of the University. The University Board of Trustees is currently discussing salaries for that fiscal year.
Doyle added that compensation for fiscal year 2009, which was discussed in June 2008, will not be released before next April.
Gutmann's pay increase is higher than the national average. According to CJ Bolster, vice president at the Hay Group, the consulting firm that Penn uses to assist with decisions regarding executive compensation, the average compensation increase among university presidents in fiscal year 2008 was about 7 percent.
Gutmann's compensation, which has increased by nearly 60 percent since first becoming Penn's president in 2004, is about 30 percent greater than the salary earned by her predecessor, Judith Rodin, during her 10th and final year as president, when she received $986,915.
Gutmann remains the best-paid president in the Ivy League for whom data is available.
Richard Levin, Yale's president, earned the next highest amount, taking in $1,200,583. His total compensation increased by 23 percent from the 2007 fiscal year. (Cornell, Columbia, and Princeton universities did not provide their tax returns before press time.)
Gutmann's salary is set by the compensation committee of the University Board of Trustees.
Prior to each academic and fiscal year, Gutmann and the Trustees agree on a set of objectives covering both academic and financial factors for the coming year.
At the end of the academic year, her performance is reviewed relative to accomplishing those objectives. That performance is factored into decisions regarding her compensation and incentive payments for that year.
Chairman of the Board of Trustees and compensation committee member James Riepe said Gutmann's pay increase, which was set in June 2007, was a result of not only performance in the 2006-2007 academic year, but her contribution to Penn over her entire time as the University's president.
Bolster attributed Gutmann's increase to three factors: the overall market increase, the performance of the University and the efforts of the Trustees to raise Gutmann's salary.
Similarly, Riepe said the Trustees' compensation committee felt that Gutmann should be one of the highest-paid presidents of large research universities in the country comparable to Penn.
"Penn is a top-five university," Riepe said, "and it seems to us that our leadership ought to be compensated accordingly."
Bolster said Gutmann's compensation is towards the lower end of presidents of large research universities, such as Ohio State and New York Universities. Gutmann runs a university which has a large budget, sits in an urban setting and has both a health system and numerous faculty members and degrees, he added.
"Not only [does Penn] perform well, but its scale and complexity is distinctive," Bolster said.
He added that it is because Penn is one of the most comprehensive universities among its academic peers that Gutmann is among the highest paid presidents of schools similar to the Ivies.
"If you looked across the 30 organizations that [we] compare . Penn is one of the largest and most complex universities," Bolster said.
Despite Gutmann's seven-figure salary, she was not Penn's highest-paid employee during the 2008 fiscal year. Both Arthur Rubenstein, dean of the School of Medicine and executive vice president of the University Health System, and Ralph Muller, the CEO of the Health System, had total compensation packages exceeding $2 million.
Both Muller and Rubenstein's salaries are set by the Penn Medicine compensation committee, which consists of Gutmann, Riepe and David Cohen, who will become the chairman of the Board of Trustees in July.
According to Susan Phillips, senior vice president of public affairs for the School of Medicine, salary increases and incentive payments for the School of Medicine and Health System are determined by a specific set of objectives that cover the financial performance, patient satisfaction and quality of treatment for the Health System, and goals in educational programs for the School of Medicine.
Muller, the highest-paid employee at Penn last year, took in $2,518,232 in total compensation, an increase of roughly 29 percent. According to Phillips, he received a 9 percent increase in base salary based on performance and market data. The remainder of the 29 percent increase is due to a Supplemental Executive Retirement Plan pay-out, incentive payments and dependent tuition support.
Rubenstein's total compensation decreased by 31 percent last year to $2,353,320. Phillips said the majority of the decrease was because of a mandatory SERP pay-out that inflated Rubenstein's compensation numbers in the 2007 fiscal year. The remainder of the decrease is due to the end of a long-term incentive plan.Comments powered by Disqus
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