makinghistory
Penn holds its Making History concert, featuring Grammy winning performers Train and John Legend. Credit: Ilana Wurman , Ilana Wurman

During the 2014 fiscal year, Penn President Amy Gutmann’s total compensation increased to nearly $3.5 million, a 21 percent jump from the 2013 fiscal year. This sharp increase in her pay can be attributed to a number of factors, but perhaps the single most important one is Gutmann’s success in fundraising for the University.

According to Penn Board of Trustees Chair David L. Cohen, “a significant portion of the President’s compensation is in her performance bonus,” reflecting the success of the Making History Campaign, where Penn raised $4.3 billion — $800 million more than its target of $3.5 billion. Cohen added that “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 reality.”

One reason for the immense success of the Making History Campaign, Vice President for Development and Alumni Relations John Zeller said, was the “broad base of involvement” among all groups of donors. Of the total money raised during the campaign, 23 percent came from donations ranging between $1 and $999,999 — a statistic Zeller deemed “pretty astounding.”

Zeller also traced the campaign’s success to its focus on three pillars — expanding student aid, recruiting and retaining top faculty and engaging with alumni — themes that have characterized Gutmann’s presidential goals as well.

“It’s also the consistency of [the] message that Amy has had since the day she arrived here,” Zeller said. “Those very specific objectives tend to resonate with our alumni.”

Future fundraising will continue to build upon the success of the campaign while refining efforts toward specific groups — for example, fundraising efforts appeal to younger alumni with late-night events to accommodate their work schedules.

Accounting professor Wayne Guay, who has researched executive compensation, explained that in the world of executives, it is not unusual to see compensation packages in the multimillion dollar range.

“A lot of large nonprofit organizations are very complex and do require a very highly skilled person to run that organization, so finding nonprofit leaders that make multiples of several million dollars would not be that uncommon,” Guay said, adding that other large nonprofit institutions like hospitals and museums often have highly-compensated executives as well.

Penn especially, Guay said, is unique in its urban location and large network of graduate and professional schools, especially the hospital system — and running an institution that size needs a special pair of hands.

“Finding someone with the talent and the ability to run a big organization like the University of Pennsylvania is not that easy to find,” Guay said. “And if you think you have a superstar, you have to figure out how to keep that person.”

Ultimately, Guay said that if Gutmann’s performance in fundraising and other areas has been extraordinary, she deserves to see significant increases in her compensation. But in future years, he added, if efforts are met with less success, her compensation should decline as well.

“You would expect that when performance isn’t as good, that the compensation would fall,” Guay said, “and we’ll see whether that happens or not.”

A previous version of this article said that the Making History Campaign exceeded its goal by $800,000. The campaign actually exceeded its goal by $800 million.

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