University president Drew G. Faust earned $874,559 in salary and benefits last year, according to the University’s federal tax filing.
In 2009, Faust received $160,362 in benefits as part of her nearly $900,000 compensation package, which includes the use of a stately Cambridge mansion known as Elmwood.
But despite those earnings, Faust is not among the highest paid university presidents in the United States. In the 2009 fiscal year, thirty college presidents earned over $1 million, according to the Chronicle of Higher Education. The previous year, 23 presidents earned over $1 million.
That year, Faust was the 56th highest paid university president, earning $693,739.
In 2002, no presidents made over $1 million and only four made more than $800,000.
According to the tax filing, the highest compensated individual at Harvard is Stephen Blyth, who is the head of internal investments at Harvard Management Company. Blyth was paid $8,443,253 for calendar year 2009.
Jane Mendillo, the president and CEO of HMC, earned $3,498,269.
“Jane Mendillo has effectively strengthened HMC’s organization and repositioned the portfolio towards generating superior long-term returns for the University,” said James F. Rothenberg, University treasurer and chairman of HMC’s board of directors, in a press release.
“HMC’s hybrid model that includes internal management is extremely cost effective for the University, operating at a fraction of the expense of equivalent external management saving Harvard over one billion dollars in management fees over the past decade,” Rothenberg said.
Compensation for many HMC investors is performance-based, and over 90 percent of compensation paid to portfolio managers is variable, based on investment performance, according to a press release.
Under Mendillo’s leadership during the last two years, compensation for HMC’s senior management has also been tied to the performance of the overall endowment portfolio. Caps have also been introduced to limit the amount of compensation awarded to HMC’s senior management in years in which the endowment has a negative nominal return.
Mendillo has also extended the number of years that portfolio managers must wait before redeeming the total payout of incentive compensation, which is meant to encourage investors to focus on long-term returns instead of large short-term gains.
The performance-based pay for endowment managers is also not paid out in full at the end of the year. A portion is retained and subject to clawbacks if a manager does not continue to out-perform market benchmarks.
In fiscal year 2009 Harvard’s endowment gained 11 percent, bringing its value to $27.4 billion.
Last year’s gains represent an upswing following the financial crisis beginning in 2008, when the endowment lost 30 percent of its market value.
—Staff writer Zoe A. Y. Weinberg can be reached at firstname.lastname@example.org.
This article has been revised to reflect the following correction.
CORRECTION: MAY 14, 2011
An earlier version of "Drew Faust Took Home $874,559 in Salary, Benefits Last Year" incorrectly stated that University President Drew G. Faust's compensation package was reported for fiscal year 2009 when, in fact, that figure is for her compensation during the 2009 calendar year.