• December 18, 2014

Compensation of 30 Private-College Presidents Topped $1-Million in 2008

Nearly four decades after Bernard Lander founded Touro College with a class of 35 students, the trustees decided that he had been underpaid during his tenure as president. To make up for the difference, they awarded him more than $4-million in deferred compensation in 2008.

Mr. Lander, who died in February at age 94, received a total compensation package of $4,786,830, making him the highest-earning private-college president, according to The Chronicle's review of federal tax documents from the 2008-9 fiscal year. The review, which included 448 chief executives, found 30 private college leaders who received more than $1-million in total compensation. In the previous year's report, 23 chief executives earned over $1-million.

The Internal Revenue Service overhauled the way it instructed colleges to report compensation for 2008. Colleges were asked to report salaries according to the calendar year, not the fiscal year, as in years past, meaning that some dollar amounts overlap with what was reported the previous year.

But one thing remained the same: As in years past, the top earners included presidents who received large payouts when they stepped down. John R. Brazil, who retired in January as president of Trinity University, in Texas, was the second-highest earner during 2008, receiving $2,777,653 in total compensation. More than $2-million of that amount included payout and interest on deferred compensation.

The highest-paid sitting president was R. Gerald Turner, of Southern Methodist University, who earned $2,774,000 in total compensation. According to the university, Mr. Turner's compensation was unusually high because he cashed out a life-insurance policy and bought his own policy, which accounted for $1.5-million of his total pay.

Four Decades of Service

Mr. Lander, an Orthodox rabbi and a sociologist, founded Touro in 1970 as a Jewish college and watched it grow into an operation with 31 schools and colleges, and branches throughout the world. He was at the helm until his death.

Officials of Touro's Board of Trustees say they opted to award Mr. Lander $4.2-million in retroactive compensation for pay and retirement benefits on the basis of a report from Quatt Associates, a consulting firm that specializes in executive pay in higher education. According to Mark Hasten, the board's chairman, the firm determined that Mr. Lander had been undercompensated compared with presidents at similar institutions.

At the time of Mr. Lander's death, $900,000 of the awarded amount had been paid. The remainder will be paid to his estate.

Retroactive compensation is unusual, though not unheard of, for long-serving college presidents. In the 2004 fiscal year, Lynn University rewarded its departing president, Donald E. Ross, with $4.5-million in compensation to make up for retirement benefits he did not receive during a 35-year tenure.

Unusually large payouts can raise red flags with the IRS, which is why some experts say compensation studies are crucial.

Raymond D. Cotton, a lawyer who specializes in presidential contracts, said any situation in which a college gives away its assets without getting something in return could be problematic. "Simply giving somebody a $4-million goodbye present, I don't think the IRS would smile on that," Mr. Cotton said. "The IRS doesn't care how popular people are."

Mr. Hasten, the board chair at Touro, said in a statement that it had chosen to provide back pay to Mr. Lander because the board had a "moral obligation" to recognize his work. Mr. Lander was known for his tireless dedication to the college, even in his late 80s and early 90s.

Howard R. Feldman, head of the Faculty Senate at Touro and a biology professor, said of Mr. Lander's pay package, "Assuming he was underpaid, I agree with it. I know he did a lot for the college. ... It was his whole life." 

 Although Touro has grown in size, the college to some degree remains a family affair. Mr. Lander's son, Doniel, serves on the Board of Trustees and was appointed chancellor of the college this year. He was a vice president in 2008, according to tax forms. Nathan Lander, Bernard Lander's brother, previously served as a vice president and chair of the sociology department and is now a professor emeritus.

Both Bernard Lander and his son were on the 12-member board when it approved his big payout. However, Barbara Franklin, a college spokeswoman, said both men recused themselves from voting on the pay package, which was approved unanimously.

In addition, the 2008 tax form shows that Nathan Lander had a $107,829 loan from the college for medical expenses, and that the president had borrowed $280,000 from the college to purchase a residence.

About $200,000 of the president's loan was outstanding in 2008, according to tax documents. According to Ms. Franklin, the college plans to reduce the deferred-compensation package, at the president's earlier request, to make up for what is owed on the Lander brothers' loans.

Family connections between trustees and chief executives are identified as a possible concern by the Association of Governing Boards of Universities and Colleges. In its recently revised guidelines on board conflicts, the association says financial ties involving a trustee's immediate family should be disclosed and regulated by the board's conflict-of-interest policy. Touro followed that protocol. But financial transactions with direct relatives could give the appearance of a conflict of interest, the guidelines say.

Million-Dollar Goodbye

Though this year's list of top earners included the presidents of some of the country's wealthiest research institutions, such as Vanderbilt, Columbia, and Yale Universities, many other of the highest earners came from smaller colleges.

Other presidents receiving large one-time payouts included John L. Lahey, of Quinnipiac University, who earned $1,845,427 in total compensation, and Walter D. Broadnax, of Clark Atlanta University, who received $1,158,537 in total pay, according to tax forms.

Lynn Bushnell, vice president for public affairs at Quinnipiac, said in a statement that Mr. Lahey's compensation was unusually high because of a large one-time reimbursement for major repairs and renovations to the president's 23-year-old house, and that accounting rules required the college to treat that money as taxable income.

Mr. Broadnax left Clark Atlanta in 2008 amid controversy regarding his ability to lead the financially struggling institution. He received a vote of no confidence from the Faculty Assembly before retiring.

It remains unclear how much of Mr. Broadnax's total pay was related to his retirement. According to a review of Clark Atlanta's tax forms, $1,149,666 of his total compensation was reported as base pay, which Donna L. Brock, a spokeswoman for the university, said was an error. She said the university had mistakenly lumped together Mr. Broadnax's base pay, bonus, and payments related to retirement, and plans to file an amended tax form.

The university declined to further elaborate on the pay or to comment on Mr. Broadnax's large payout in light of Clark Atlanta's financial troubles, calling it a confidential personnel matter.

Diane Plummer, a former head of the university's Faculty Assembly, called the president's pay "disgraceful" given Clark Atlanta's financial situation and the layoffs that occurred during his tenure.

"We assessed him up, down, sideways, and backwards," she said of the assembly's vote of no confidence. "We couldn't find anything that the man had done right, and yet he was paid all this money."

More Big Paychecks Expected

Compensation experts say that large, one-time awards will continue to determine the top-earning presidents for years to come.

In addition, said Brian H. Vogel, senior principal at Quatt Associates, the compensation packages for 2008 reflect salaries set before the recession, when presidents began to take pay freezes or cuts.

But Mr. Cotton, the lawyer, pointed out that baby boomers make up the largest share of college presidents, and that many of them are likely to retire soon and see large payouts.

He expects executive pay to continue to rise. More and more boards are made up of businesspeople, who are adopting practices from the for-profit sector, such as incentive bonuses. Businesspeople, he said, are more likely to treat colleges like corporations, and can get "carried away" in establishing pay and generous retirement plans.

What's more, he said, with the large number of retirements soon to come, boards compete against one another for the top talent—making them more willing to cut deals for large payouts.

"Presidential compensation has been shooting up because of a disparity between supply and demand in the marketplace," he said. "There continues to be a greater demand for people who can do these jobs well than there is a supply."

Paul Fain contributed to this report.

Comments

1. 22206165 - November 15, 2010 at 05:41 am

Presidential compensation got out of control starting about thirty years ago, when Chairmen of the Board(s) got it into their heads that their status somehow depended on the compensation and perks of their presidents, whom they perceived as CEOs: they started thinking that a university was a corporate entity. Suddenly, presidential appointees were getting lawyers to negotiate their compensation packages; and having board memberships in country clubs as well as appointments on various for-profit boards built into their negotiated packages. You could see how the faculty was going to react. It's one thing to make twice or three-times as much as one of your professors; but what has evolved is madness. Many presidents understand this, thank heavens.

2. johnny6 - November 15, 2010 at 07:16 am

For me this is a sign of the increasing corporatization of higher education--when presidents (like CEOs) make 10, 20, or more times the level of compensation for the highest paid worker. Runaway compensation for the few and the elite is a scandal that should shame us all. Unfortunately, we are not, for the most part, ashamed.

Granted, some presidents, like M. Lee Bolton (former president of Willamette University and now president-elect of Emerson College) truly transformed their institutions for the better and innovated fresh ways of fairly governing faculty, staff, and students. But even in the case of excellent, transformative leaders, the runaway pay is not reflective of reasonable standards for compensation in a world where schools are retrenching and cutting costs.

3. jack_433 - November 15, 2010 at 07:20 am

Always amazing to me is faculty who sit on their duffs indignantly attacking the compensation of leaders, academic or otherwise, all the while never having walked in a leader's shoes nor competent to do so.

4. 22206165 - November 15, 2010 at 07:56 am

Alas, your mind is made up, and you don't sound like someone interested to getting other opinions. I've been a faculty member for nearly fifty years, a senior administrator for more than twenty, and made more money in this profession than I ever dreamed of as "a highly compensated corporate officer". I also never stopped teaching, worked about eighty hours a week, and felt blessed. But, professional presidents get mentored by professional board members, and money is what they talk about. You stay in your business, friend; and get a better attitude.

5. texas2step - November 15, 2010 at 09:37 am

What do the custodians and food service workers make at these universities?

6. andyk11 - November 15, 2010 at 11:39 am

In the for profit, publicly reporting sector, rather than moderate or decrease remuneration, addition disclosure has had the perverse effect of increasing amounts. What was once supposed or suspected became known, was higher than anticipated, and the game of one-upmanship was on even stronger than before.

Do not be surprised if new 990 reporting produces a similar result. The corporate types to whom the commentators above have referred are keenly interested in knowing what the other person is doing and basing action on that.

7. princeton67 - November 15, 2010 at 01:50 pm

Some observations.
1. Except for Mr. Turner, every example cited special circumstances. "Compensation" seems an excellent word choice, because these examples are not talking about salary, but total, and often unique, remuneration.
2. How many of the 31 had a salary, just a salary, of 1+m?
3. "Out-of-control"; "runaway"; "overpaid"??? Really??? Go to "americasbestonline.net": Sixty-six (more than twice 31) college football coaches make more than $1m. Or usa.today.com/sports: "The average coaching salary at the 65 schools that reached the 2009 NCAA tournament is about $1.3 million, not including benefits, perks, and incentives"

8. sporis - November 15, 2010 at 02:37 pm

At Touro College, the faculty had to take a 3% cut in salary as President Lander's "compensation" was evidently ramped up to over 4M. Who knew...we thought the college was going through hard times.

9. jack_433 - November 15, 2010 at 03:51 pm

Hey, Backwater 22206165, I am a faculty member.

10. wb2ldj - November 15, 2010 at 05:11 pm

The creation of academic gods, Wall Street corporate style, paid for by student loans. GS

11. feudi - November 15, 2010 at 05:38 pm

The Touro case seems egregious. Mr. Kerry's compensation does not include the several hundred thousands of dollars he gets each year as a Board member of Tenet Healthcare, the hospital company that defrauded Medicare, i.e., US taxpayers of billions of dollars. I wonder how many others on this list are also compensated as Board members at for profit companies? Inquiring minds want to know.

12. tiredandfrustrated - November 15, 2010 at 06:13 pm

Although I have never been nor aspire to be an administrator, such large salaries seem incredibly inflated when compared to faculty and staff salaries. I imagine that administrative work is indeed stressful and often unpleasant but after all, these people sought after the job. The compensation does not seem appropriate in my humble opinion, especially in such difficult, economic times. When my institution cut salaries, benefits, and several staff positions, the administrator's salaries took a relatively low hit. It's no wonder that students, parents, and the general public complain about the rising cost of higher education these days; and who takes the brunt of these complaints?--the faculty and staff who deal with students daily.

13. jthelin - November 15, 2010 at 09:10 pm

Response to comment no. 3 "Jack . . ."

You wrote:

Always amazing to me is faculty who sit on their duffs indignantly attacking the compensation of leaders, academic or otherwise, all the while never having walked in a leader's shoes nor competent to do so.

My response: I am a professor -- I do not sit on my duff (in fact, I teach standing up and seldom sit in a chair while in my office). Beyond those literals, I will compare my work load, my hours, my contributions to our university's Top Twenty Goals, my service as President of the Faculty Senate, Liaison to the Board of Visitors, Member of the Senate Council, and unpaid consultant to presidents and board members. I assist with fund raising and talking to potential donors.

And, I am pleased to "walk a mile in a president's mocassins" (presidents are not necessarily leaders by the way)

Two evenings a week I finish teaching a graduate class at 9:30 p.m. I do not see any lights on in the administration building as I leave my classroom. I most willingly will accept the challenge you pose -- and at far less compensation than the presidents receive.

How about this? Our former president who retired in 2000 continues to receive year after year a full salary of $220K plus TIAA CREF plus health care plan. Show me how such compensation is justified.

14. henry_goodelman - November 16, 2010 at 12:41 am

College chancellors and presidents deserve every penny they receive in compensation for their immensely important role within an institution's culture & advancement.

Also, it should be noted that many readers of this article are totally disregarding the fact that NCAA football and basketball coaches can make multiple times more than these million-dollar executive administrators.
Here are two links
http://www.helium.com/items/1874488-highest-paid-college-football-coaches-of-2010
"During the upcoming 2010 season, Meyer is slated to earn $4 million"
http://www.forbes.com/2010/03/05/calipari-donovan-pitino-business-sports-college-basketball-coaches.html
"John Calipari, No. 1 on our pay list. He parlayed a run at the national title with the University of Memphis Tigers into an eight-year, $32 million deal"


I think this article's focus was sensationalistic.
It's horrifying to believe that with the new congress, senate, and state legislations coming into office in January, that many officials will discount the work of higher education executive administrators and call for the reduction of their salaries, within the (republican party's) call for lower spending; regardless of the extreme deregulation of fair-taxation on private-commercial industry.

15. walkerst - November 16, 2010 at 10:51 am

A small point, re/Jack in comment #3 - clearly, you're neither faculty nor administration. Your grammar is appalling. And for Texas2step - why bring the custodians and food service workers into this? I guarantee you that no matter where you work, people who work 80 hour weeks running the place, and whose positions require doctorates plus decades of experience, will make many times more money than someone swinging a mop. And they should. By the way - no, I'm not a college president, and I don't have a doctorate, though I do have a full-time job at one college and teach a course at another. I'm a librarian, and I teach in another field as well. I have no problem with our presidents making much more than I do - I wouldn't want their jobs for any amount of money. True, some people are compensated far beyond their merit, and these cases should be examined. But by and large, I think many college presidents (or at least the good ones) could have made a lot more money in the corporate world, and they are in education because they love it. I've worked at major research universities and small colleges, and have been lucky enough in most instances to work for and with truly dedicated professionals, most of whom I think are egregiously underpaid. And yes, I've worked in the corporate and non-profit worlds as well, and by comparison with them, the people I work with here shine. Maybe I've just been lucky.

16. walkerst - November 16, 2010 at 10:52 am

Oh - and by the way - I've been a food service worker myself, while a student. So I'm not making fun of them. But college presidents they aren't.

17. jthelin - November 16, 2010 at 03:03 pm


Response to comment no 14 Henry Goodelman -- who writes:

"College chancellors and presidents deserve every penny they receive in compensation for their immensely important role within an institution's culture & advancement."

This is an interesting, bold claim. But I think you are presenting it as a conclusion. Well, if you say so, it must be right, right? It kind of ends the discussion -- unfortunately, without much discussion or data.

By the way, one reason that those highly paid college coaches make so much is that university presidents who hire them either approve or acquiesce such compensation.

18. jack_433 - November 16, 2010 at 11:00 pm

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19. jcisneros - November 18, 2010 at 10:11 am

The issue of excessive compensation is not limited to higher education. It is a systemic problem brought on by fewer and fewer restrictions within a free market economy. I think most of us expect university presidents to make higher salaries than other administrators, but the matter of perks unrelated to the performance of their duties such as country club memberships and other high class swag disturb us.

It boils down to the question of how much compensation is appropriate. Executive compensation being on the rise in a bad economy seems counter-intuitive and is simply inappropriate. Executive compensation packages need to be subject to review based upon performance and changing economic circumstances. No automatic raises, no protected compensation. It is the height of arrogant selfishness to cut faculty pay, raise tuition rates, cut course offerings and still receive the same compensation. Fiscal sanity simply requires everyone (including university presidents) to take a hit on compensation.

20. guilt - November 18, 2010 at 08:50 pm

Shame on you all! We are talking about millions $,$$$,$$$ and people are living in the streets. Academics at worst has the responsibility of educating people, is this not what the paper title suggests. Profit over humanity or a rational to keep people down? In any manner, no reason to lie to yourself, these people earn so much money but at the expense of those who have had no chance due to racism, yes is wrote it, or classism. I charge you all with shame. Is the Chronicle of Higher Education a puppet for the rich or a champion of the truth?

21. sharonmurphy - November 21, 2010 at 09:57 am

Too bad the report does not include the real value of housing, luxury travel, money received as members of boards of trustees (often of the corporations whose own big men sit on the institutions' boards and help jack up the salaries in the name of paying what the pres. is worth)? What hypocrisy! Benson Snyder wrote a book titled The Hidden Curriculum. Maybe presidents ought to read it - they are teaching greed by the example of their salaries and the lavish lifestyles far too many of them lead. "Higher education" - what a shame!

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