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Compensation Trends in Higher Education. Rian Yaffe Senior Consultant Chairman & CEO. Saundra Tracy Senior Consultant Immediate Past President, Alma College. Topics. Salary Trends Benefits & Perquisites Deferred Compensation Outlook for 2011/12. 2010/11 Survey participants. - PowerPoint PPT Presentation
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Compensation Trends in Higher Education
Rian YaffeSenior ConsultantChairman & CEO
Saundra TracySenior ConsultantImmediate Past President, Alma College
Topics
• Salary Trends• Benefits & Perquisites• Deferred Compensation• Outlook for 2011/12
2010/11 Survey participants
27% of the Presidents who
responded were women
Executive Compensation Survey 2010/11
n= 193
Midwest28%
Northeast40%
South23%
West9%Geographic Regions
< $25M26%
$25M - $50M31%
$50M - $100M24%
> $100M19%
Operating Budgets
Bac's45%
Masters39%
Other16%
Carnegie Classifi-cations
Compensation Trends Median Base SalariesYear over Year TrendsVariable Pay Awards
Base Salary Data:President
Median Base Salary 2009/10: $250,000
Median Base Salary 2010/11: $251,500
Median Increased: 0.6%
Median Increase for Same Incumbents: 2.3%
37% of presidents reported frozen salaries
Of those who received an increase, median increase was 4.2%
Presidential Salary Changes(same incumbents 2009/10 to 2010/11)
no change37%
1%-3.9%29%
4%-6.9%18%
7%-9.9%6%
Over 10%9%
Base Salary Data: Provost
Median Base Salary 2009/10: $150,000
Median Base Salary 2010/11: $151,500
Median Increased: 1.0%
Median Increase for Same Incumbents: 2.5%
23% of provosts reported frozen salaries
Of those who received an increase, median increase was 3.1%
no change23%
1%-3.9%44%
4%-6.9%16%
7%-9.9%7%
Over 10%11%
Base Salary Data: CFO
Median Base Salary 2009/10: $138,795
Median Base Salary 2010/11: $151,208
Median Increased: 8.2%
Median Increase for Same Incumbents: 3.6%
17.3% of CFOs reported frozen salaries
Of those who received an increase, median increase was 4.7%
Yaffe & Co. Survey: Exec Comp, 2010/11
no change17%
1%-3.9%35%4%-6.9%
21%
7%-9.9%12%
Over 10%15%
Median base Salaries2007 to 2010
2007 2008 2009 2010
$220,541
$242,000 $250,000 $251,500
$134,250 $144,362 $150,000 $151,500
$133,450 $135,608 $138,795 $151,208
Since 2007, median salaries
for Presidents
have increased 12.3%Since 2007, median
salaries for Provosts
have increased 11.4%
Since 2007, median salaries for CFOs have
increased 11.7%
Median base SalariesChief Officers
2007 2008 2009 2010$90,000
$100,000
$110,000
$120,000
$130,000
$140,000
Advancement
Enrollment Management
Students Affairs
IT
Presidents Eligible for Variable Pay
2006 2007 2008 2009 20100%
10%
20%
30%
40%
50%
34.8%30.1%
35.6% 35.6%32.4%
Variable Pay Awardspresidents
2010/11 Survey
Eligible: 32%Median of Max Opportunity: 20%
Received: 64%Median Received: $25,000
2006 2007 2008 2009 20100%10%20%30%40%50%60%70%80%90%
100%
78.1%74.5%
62.3%56.6%
64.4%
Percent Received Variable Pay
Provosts Eligible for Variable Pay
2006 2007 2008 2009 20100%
10%
20%
30%
40%
50%
16.9% 18.7% 17.2% 17.2% 18.6%
Variable Pay AwardsProvosts
2010/11 Survey
Eligible: 19%Median of Max Opportunity: 25%
Received: 58%Median Received: $10,000
2006 2007 2008 2009 20100%10%20%30%40%50%60%70%80%90%
100%
60.0%64.3%54.5%
47.8%58.1%
Percent Received Variable Pay
CFOs Eligible for Variable Pay
2006 2007 2008 2009 20100%
10%
20%
30%
40%
50%
16.7% 17.6% 17.6% 17.6% 18.8%
Variable Pay AwardsCFO
2010/11 Survey
Eligible: 19%Median of Max Opportunity: 12.5%
Received: 72%Median Received: $8,000
2006 2007 2008 2009 20100%
20%
40%
60%
80%
100%90.0%
70.4%
53.6%47.4%
71.9%
PercentReceived Variable Pay
Median CompensationBase Salary + Variable Pay
2007 2008 2009 2010
$226,037 $245,000 $250,931
$260,146
$135,592 $145,498 $150,000 $152,337
$133,952 $136,358 $138,795 $154,578
Since 2007, median cash
comp for Presidents
have increased 13.1%
Since 2007, median cash
comp for Provosts
have increased 11.0%
Since 2007, median cash
comp for CFOs have increased
13.3%
Deferred Compensation
Age DistributionPresidents
Median Age: 61under 50
7%
50-5412%
55-5921%
60-6434%
65-6918%
over 708%
Presidents aged 65 and over
2006 2007 2008 2009 201010%
15%
20%
25%
30%
15.2%
18.4%20.0%
22.8%
26.3%
Percent provided Tax Sheltered Annuity Plan 403(b)
2006 2007 2008 2009 201070%
75%
80%
85%
90%
95%
100%
95.1%
86.5%
80.3%
85.9%88.5%
Percent SERP provided 2006 – 2010
President Provost CFO0%
5%
10%
15%
20%
25%
30%
35%
40%
21%
5% 6%
30%
11% 11%
34%
8%
14%
29%
12% 12%
34%
8%
13%
2006 2007 2008 2009 2010
SERP Contribution as Average Percent of Salary
President
2006 2007 2008 2009 20100%2%4%6%8%
10%12%14%16%18%20%
9.23%11.24%
18.68%
13.50%
18.80%
Perquisites
HousingPresidents
Housing Provided: 56%
Allowance Provided: 22%
Median Monthly Allowance: $2,500
AutomobilePresidents
Automobile Provided: 72%
Allowance Provided: 19%
Median Monthly Allowance: $643
HAVE A PROCESS
NEW FORM 990 Revamped by IRS because they wanted more information from
non-profits
Number of non-profits has exploded since the form was last updated in 1979
Concerned many non-profits are not living up to benefits of tax-exempt status
Helps IRS understand how an organization is structured and governed
IRS believes that forcing non-profits to disclose will get them in line:“A tax compliant organization is a well-governed organization”
Steven Miller, IRS Commissioner
Rebuttable Presumption of Reasonableness
Independent Board Committee
Appropriate Comparability Data
Process Documentation
Compensation Approval process
President Compensation & Benefits: approved by Executive Committee or Board
VP Compensation & Benefits: approved by Compensation Committee
Penalties for Knowing Approval of Excessive Compensation
Intermediate Sanctions (either in addition to or instead of revocation of tax-exempt status)
Repayment of excess plus 25% excise tax for Executive
10% up to $20,000 jointly or severally for Board/ Committee Members
Outlook for 2011/12
