As you might suspect, college presidents make big bucks in exchange for calling the shots (and fundraising) at campuses nationwide. At private schools, the president is commonly the highest paid employee. At public schools, it’s usually the football coach.
But Kenyon’s former President S. Georgia Nugent put the College back in the spotlight on Monday when she made The Chronicle of Higher Education‘s list of the top twenty highest-paid private college presidents in 2011, pulling in nearly $1.3 million. That’s a 147% raise from what she made in 2010. What gives, Kenyon?
First, let’s break down that $1.3 million (more accurately, $1,292,619):
Base pay (i.e. salary): $349,537 (27% of total compensation)
Bonus pay: $0 (this isn’t Wall Street, 0%)
Deferred compensation (just what it sounds like): $132,704 (10.3%)
Nontaxable benefits: $42,185 (3.3%)
Other pay: $768,193 (58.4%)
Now, you’re probably wondering what that “Other pay” is (hush money? Super-PAC money? A lifetime supply of Cove mac & cheese wedges?!). It’s vested deferred compensation, or money set aside for an employee in previous years that was paid out in the current year. In this context, vested essentially means paid out.
Kenyon’s 2011 990 Form, a financial disclosure non-profits are required to submit to the IRS, mentions this vested deferred pay:
[Nugent’s] form W-2 for calendar year 2011 included 758,739 of vested deferred compensation, $550,000 of which had been reported on prior years’ Forms 990 [ed. note: like attorneys general] when the compensation was not yet vested. These payments were approved by the Board of Trustees who were independent of Dr. Nugent.
Deferred pay isn’t witchcraft. Many industries (finance, technology, professional sports) use it to incentivize their employees to stay put or meet certain goals laid out in a contract.
Director of Public Affairs Mark Ellis confirmed to The Thrill that contracts like former President Nugent’s are “used to reward” and as a “retention tool.”
Ellis denied that the timing of Nugent’s compensation had anything to do with the We Are Kenyon campaign, a fundraising drive completed in 2011 that brought over $240 million into the College’s coffers (the campaign’s goal was $230 million).
Public Affairs also released a statement in response to the Chronicle‘s report:
A one-year spike in deferred compensation for the former president of Kenyon College accounts for a temporary jump up the pay ranks reported Sunday by the Chronicle of Higher Education.
“We believe the compensation for our president is competitive, appropriate, and well in line with our peer institutions,” said Barry F. Schwartz ’70, chairman of the board of trustees.
“Deferred compensation plans are a common and important part of today’s executive compensation packages,” he said. “The reporting of this compensation package for former President Nugent for this one year should be seen as a unique moment and not the standard for annual executive compensation at Kenyon.”
So Nugent’s compensation package was a one-year spike. A “common and important” aberration.
Another article from the Chronicle sheds some light:
Deferred-compensation plans are common for college presidents. For the highest-paid leaders, a board may allocate hundreds of thousands of dollars a year in deferred compensation, which can be invested tax free until the time of the payout.
Does this seem like something a non-profit should be doing?
what does vested mean
that’s 3x what the actual President makes
Not remotely. Every President becomes a millionaire after leaving office, because they can charge astronomic speaking fees for the rest of their lives, and will probably sell at least a million copies of their shitty book. Presidents of small, midwestern Liberal arts colleges don’t get that perk.
im pretty sure you know what im talking about, dumbass. im talking about the actual salary of the president of the united states
You’re still comparing apples to oranges. You don’t need to incentivize a president to stay in office, they serve until their term is up. Presidents also live rent free in the white house, have private chefs, and all kinds of expensive benefits that normal people have to pay for themselves. They are also almost always wealthy to begin with. Obama made about $6 million his first year in office on top of his salary. Calling a college president over-compensated by comparing them to the President is ridiculous.
(This comment has been removed due to a malicious attack on the author)
Of course it seems like something a non-profit should be doing. All “non-profit” means is that the organization is in a category that we (as a society) have chosen to encourage by way of not taxing it. Non-profit doesn’t mean that the organization should be run poorly, shouldn’t be able to attract good talent, or shouldn’t be able to incentivize good performance.
Would you rather Kenyon hire the president based only on cheapness?
O hey I like money! Can I have some??
The kind of people with the contacts and talent who can raise hundreds of millions of dollars each year don’t work for free. Just because you work in non-for-profit – doesn’t mean you stop being a human being with expenses. And the expenses of a globe-trotting, high-profile college president are probably pretty high.
“high-profile college president”
It’s a lot of money no matter how you slice it, and in Nugent’s case you can make a compelling case that she was not one of the presidents who’d be worthy of that kind of consideration. The sums involved in this raise alone are more than the TOTAL amount of raises being requested by the ENTIRE Maintenance staff back during that whole affair.
But just to be pedantic (and if Kenyon taught me nothing else…) we should consider that it’s a near-certainty that Nugent gave a considerable amount of money back to the College, as indeed is unofficially expected of a college president when he or she is on the fundraising circuit. You have to be able to look the big fish in the eye and say that you believe so deeply in [INSERT SCHOOL HERE] that you’ve dug deep yourself.
I mean, just think of all that purple paraphernalia she donated back for the charity auction when she left! That’s worth a pretty penny. I snagged a lovely fuchsia handbag. It brings out my eyes.
Yeah, but “raise” is the wrong word, it was included in her contract from the beginning. It wasn’t, after hiring her, within the school’s power to RETRACT that money after she completed what we had required for that deferred payment to be payed out (i.e. that she stay on to 2011, which she did). In short, we were actually paying her more than “base pay” would have put her at for years, and now we had to pay up.
Kenyon isn’t a non-profit, it’s just a meaningless label.
This is exactly the sort of thing that kids who go to Kenyon don’t understand because of a compensation=evil kneejerk. A bit above your audience, Thrill.
Just a thought…if Nugent was critical to raising $240 million, then her pay doesn’t seem that out of whack. Also agree that the money was contractually owed her so not technically a raise – just a payout.