Chancellor named second highest-paid head of school
A recent ranking, courtesy of the Chronicle for Higher Education, places Chancellor Mark Wrighton as the second-highest paid leader of a private college in 2014—a ranking that administrators say is artificially high and an anomaly due to a supplemental executive retirement plan approved by the board of trustees in 2004.
Wrighton’s 2014 compensation package included a one-time, near-$3 million supplemental executive retirement plan, according to a statement from Washington University, that brought his total compensation package to $4,215,766—second only to Jack Varsalona, the president of Wilmington University in Delaware, who made $5.4 million.
However, $2,992,467 of Wrighton’s compensation is being allocated to a supplemental executive retirement plan, which he won’t have access to until he retires, bringing his total compensation package to a higher amount than usual.
Thus, Wrighton’s base compensation rings in at $943,583, with an additional $279,716 in “deferred compensation earning and match; taxable and nontaxable benefits, including health insurance; housing and automobile,” according to the statement from the University. In addition, 48 percent of the supplemental vesting will need to be paid in taxes.
The Board of Trustees—upon a recommendation from the Compensation Committee of the Board—approved the supplemental retirement benefit after a review of the chancellor’s performance, the statement adds.
Vice Chancellor for Public Affairs Jill Friedman added that the Board of Trustees chose to grant Wrighton the supplemental retirement payment out of recognition for his leadership and strong performance.
“It is one of many ways that a board can recognize the performance of an executive and this is the route that they chose to do so,” Friedman said.
The ranking comes based off of information from the Form 990 or the Return of Organization Exempt From Income Tax, a form from the United States Internal Revenue Service that collects financial information about nonprofit organizations—like Washington University.
Friedman added that the Chronicle’s choice to report total compensation lacks context that explain why it appears as though the Chancellor’s pay suddenly skyrocketed.
Dan Bauman, the journalist who wrote the Chronicle story, said in an interview with Student Life, that the outlet chose this metric in order to provide a complete picture of compensation.
“To not include the deferred compensation or to discount it, we feel would leave out an important component,” he said. “This isn’t an insignificant amount of money, and if you don’t take it all in account, there’s a large amount of money that you’re leaving on the table, and in some cases, it’s larger than a base salary, a bonus or any other type of compensation.”
A similar supplemental retirement payment was awarded to the chancellor in 2010, where he placed fourth on the same Chronicle ranking that has been released consistently since 2008. In past years where he did not receive the additional retirement funds, Wrighton has steadily moved up the list at 74th, 44th, 41st and 32nd in 2009, 2011, 2012 and 2013, respectively.
“Mark’s been in his position for 20-some odd years,” Friedman said. “The longer your tenure, the more likely your pay is going to increase.”
Many supplemental retirement and deferred compensation plans are agreed upon to be completed in a set number of years—like how Wrighton’s was agreed upon in 2004 to be fulfilled in 2014. Bauman said many universities do this to incentivize leaders to remain and not move to another job.
“It’s certainly a common with higher level executives. Universities use them as incentives to keep a higher level executive around,” Bauman said.
In Wrighton’s case, this supplemental retirement payment was also contingent upon his continued service. Had he been terminated or left the University, he would not have received the supplement.
Friedman herself has calculated how Wrighton stacks up against leaders of the top 15 Association of American University institutions. She said that in 2012, the chancellor’s base salary put him at eighth highest, while his total compensation put him at 15th. In 2013, he found himself seventh in base and 15th in total. In 2014, the year the Chronicle puts him at first, he’s first in total compensation but ninth in base salary.
“The point is that the way that they do this skews things a lot, and this really just underscores how great of an anomaly it really is,” Friedman said. She also noted that her calculations did not weigh tenure, leadership transitions or value of retirement program.
As for securing the money, Friedman stressed that the close to $3 million planned for and not siphoning money away from other causes like socioeconomic diversity.
“It’s really important to look at the historical trends around his compensation and not just this single anomaly,” Friedman said, responding to complaints that a school that has publicly struggled with socioeconomic diversity has the second highest paid chancellor.
“The other thing that’s really important to know is that this is not a matter of either or,” she added. “The commitment to enhanced socioeconomic diversity, the very concerted effort that is going into raising hundreds of millions of additional dollars for financial assistance…all of that will occur and that is regardless of the level of compensation for the chancellor. His role is essential in setting the tone and in making sure that we hold ourselves accountable for achieving these goals we’ve set for ourselves and so far we are very much achieving those goals and even potentially exceeding them.”