Penn State Tops Public College Compensation Survey

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Pennsylvania State University’s former president Graham Spanier last year received compensation valued at $2.3 million, including the transfer of a life-insurance policy, more than the leader of any public university, a Chronicle of Higher Education survey found.

A tenured faculty member on administrative leave, Spanier stepped down as president in 2011. He was later indicted on charges including conspiracy and perjury in what prosecutors said was a cover-up of ex-football assistant coach Jerry Sandusky’s sexual assault of boys. Spanier has pleaded not guilty in the pending case.

Spanier’s total compensation included the $1.7 million taxable value of a discontinued life-insurance program that reflects 16 years of service, according to Lisa Powers, a Penn State spokeswoman. Another $600,000 was annual pay he is contractually entitled to under an employment agreement running through November 2017, Powers said.

Spanier didn’t receive a cash payment from the insurance transfer, said his attorney Libby Locke. The $1.7 million is the value of the benefit that will be paid upon his death, she said.

“There has obviously been a confluence of extraordinary circumstances that has caused this to occur and we certainly look forward to getting past these challenges,” Powers said.

Forty-two former presidents, such as Spanier, remain on public-college payrolls, many as advisers to the current leaders or as professors, the Chronicle found.

Exceeding $1 Million

Two other public college presidents made more than $1 million, according to the Chronicle survey, which documented compensation for the year ended June 30.

Penn State’s Rodney Erickson, who succeeded Spanier and left the presidency last May, received compensation valued at $1.5 million. Erickson’s package included $586,000 related to the discontinued life insurance plan, the Chronicle said. It also reflected compensation due to his retirement after 37 years of service, as well as $125,000 for unused vacation and sick time, Powers said.

Texas A&M University’s R. Bowen Loftin, who departed in January, received $1.12 million. A spokesman for the school declined to comment.

Amid rising tuition and student debt, such pay packages have drawn criticism from professors and lawmakers. As more business people sit on public university boards, executive contracts are beginning to mirror those in the private sector, said Raymond Cotton, a pay consultant at Mintz Levin in Washington. Public college presidents’ median pay rose 7 percent last year, to $428,000, the Chronicle found.

‘Short Supply’

“Someone might argue that university presidents should be socially motivated and care little about monetary income,” said Ge Bai, an accounting professor at Washington & Lee University who has studied executive compensation. “But quite often strong candidates are in short supply, and many of them have multiple attractive options.”

Ohio State University paid interim President Joseph Alutto $996,169. His compensation included $318,754 of unused vacation and sick time, said Gary Lewis, a university spokesman.

Michael Drake, Ohio State’s new president, is “holding tuition and fees flat, expanding need-based grants and working with our board of trustees to reexamine executive compensation all as part of a push for a more affordable and frugal university,” Lewis said in an e-mail.

At more than half the colleges surveyed by the Chronicle, the president wasn’t the highest-paid employee. Instead, that distinction went to staff members such as athletic coaches and medical faculty. Sixty-two of those employees earned more than $1 million last year, according to the report.

(An earlier version of this article corrected the first, third and eighth paragraphs to clarify that the insurance was a non-cash transfer.)

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