Harvard Executives Earn More Than Their Massachusetts Counterparts
Harvard executives and employees received far higher salaries in 2009 than their counterparts at the 19 other wealthiest universities in Mass., according to a study released Tuesday by the Center for Social Philanthropy at the Tellus Institute.
The average of the top eight Harvard employees was more than three times the average of the top eight employees at the nearest runner-up—Boston University.
The study follows a two-year investigation that used public tax records to deduce the salaries and benefit packages of the top executives at the universities, which included MIT, BU, Tufts, Wellesley, and Boston College.
Study authors worked closely with unions in the Massachusetts area in creating the study, including SEIU Local 615, the union that represents
Harvard custodians and security guards.
The study showed that Harvard executives’ salaries topped the list in all categories except for president’s income: BU President Robert Brown’s $1.04 million package edged out University President Drew G. Faust’s salary of $822,000.
Harvard’s top paid executive, Harvard Management Company Managing Director Stephen Blyth, made $6.4 million in 2009, nearly three times the salary of the next highest earner.
Joshua Humphreys, the primary author of the study, said that the motivation for the investigation was to increase transparency in universities across Boston.
“The emphasis for the research was really transparency,” said Humphreys, who has taught at Harvard. He added that the push for transparency was especially important during 2009 because of the economic crisis and the massive cut-backs on labor that universities instituted.
This contradiction was frequently referenced in the report.
“The financial crisis of 2008-09 appears to have done little to dampen the size of compensation packages received by the most highly paid college officials, even as colleges themselves have
imposed draconian cuts upon programs and lower-level staff, often in response to sharp declines in the value of their endowments,” the study reads.
Humphreys said he was surprised to find that among the universities he surveyed, 20 people made at least $1 million—and Harvard is home to 11 of them.
“I did not expect there to be a top 20 list of people being compensated over a million dollars in the very year of the financial crisis’ most devastating impact on university budgets,” Humphreys said.
Harvard’s higher compensation can partly be explained by the Harvard Management Company, which manages the University’s endowment and operates on a more corporate model.
Salaries for top members of the HMC are more typical of a hedge-fund manager than an educator.
“HMC’s compensation system contains many important features, including performance incentives that are measured against market benchmarks; incentives that are paid over time to ensure sustained performance; and clawbacks to avoid undue risk taking,” University Spokesperson Kevin Galvin wrote in an email statement. “In several cases, the payments reflect an accumulation of several years’ positive performance relevant to market benchmarks.”
Humphreys acknowledged that Harvard was an outlier because of its large endowment, but stressed that all public Universities have a duty to spend their money transparently.
“Universities should be true to their public mission—there’s a social contract that they have with the public which is granting them large public subsidies,” Humphreys said. “When colleges are looking more like hedge funds with libraries, then people are expressing concern.”
—Staff writer Mercer R. Cook can be reached at email@example.com.