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In addition to receiving $5.2 million in compensation from hedge fund D.E. Shaw and $2.7 million in speaking fees, former Harvard President and professor Lawrence H. Summers also received nearly $600,000 in salary from the University this past year—only slightly less than what he was earning prior to his 2006 resignation as Harvard’s head.
According to White House public financial disclosure reports—available because Summers now serves as director for President Barack Obama’s National Economic Council—Summers received $586,996 in salary as the Charles W. Eliot University professor in 2008 and 2009. According to the report, he held the position at Harvard from 2001 until January of this year.
Excepting Summers, the University’s highest-paid professor in 2007 was Business School Professor W. Earl Sasser, who received $416,148 in compensation and employee benefits as well as a $335,000 expense account. According to the Department of Education, the average salary of a full professor at Harvard in 2006 was $165,149.
Summers served as president at Harvard through fiscal year 2006, when he earned $610,556 in compensation and benefits and received nearly $100,000 in his expense account, according to publicly available tax information required from non-profit institutions. Under the terms of his resignation, he then received $610,586 in paid sabbatical for the following year, as well as over $143,000 for moving expenses, loan interest subsidies, and other allowances.
According to Summers’ Web site at the Harvard Kennedy School, he writes a monthly column for the Financial Times, co-edits the Brookings Papers on Economic Activity, serves as a managing director of D.E. Shaw, and serves on a number of not-for-proft and for-profit boards.
A “Statement on Outside Activities of Holders of Academic Appointments” from the Provost’s Web site notes that faculty members and other academic appointees are hired under “the expectation that [their] primary professional duties are to Harvard, and that outside professional activities will not conflict with obligations to one’s students, to colleagues, and to the University as a whole.” Though paid consulting for other educational institutions requires permission from the faculty member’s Dean and the Corporation—the University’s highest governing body—customary professional service “generally poses no serious conflicts and may be undertaken without prior approval.”
But as a guideline, “no more than 20 per cent of one’s total professional effort may be directed to outside work,” and the “nature of specific activities and the individual’s role in them” may also be examined to avoid possible conflicts of interest.
While recent salaries of other University officials have not yet been released, Harvard’s highest paid employee in 2007 was Christopher M. Gordon, chief operating officer for the Allston Development Group, who received $587,172 in compensation for a job cited as requiring an average of 40 hours per week. University Provost Steven E. Hyman earned nearly $550,000 in salary that year for a job averaging 70 hours a week.
Documentation regarding Summers in the 2006 tax filing states that “Harvard provides the President with a home in Cambridge and requires him to use it as a condition of employment for the convenience of the University,” and as such does not provide any compensation for such purposes. But subsidies are included for housing outside of Cambridge, as well as “legal expenses, personal travel, loan interest subsidies and retirement gifts.”
With Summers’ resignation, the University agreed to provide him with “access to a mortgage loan on a personal residence consistent with University practice,” according to the tax filing. The report shows that Summers took out a 20-year loan for $1 million in 2006 to purchase a home that requires interest-only payments from 2010 to 2014, and then principal and interest payments afterwards.
In 2002, Hyman—who is not provided a house by the University—took out a 30-year, $750,000 loan from the University to purchase a home that requires him to pay back “principal plus appreciation at sale or maturity.”
Summers’ tenure as president, the shortest since the Civil War, ended in June 2006 with his resignation after heated struggle with members of the Faculty of Arts and Sciences. In addition to his statement that “issues of intrinsic aptitude” may explain the underrepresentation of women in science and engineering leadership positions, he was criticized for his ambiguous role in a federal fraud scandal involving economics professor and friend Andrei Shleifer ’82, as well as his reported firing of former Dean of the Faculty William C. Kirby.
Summers, who became a tenured professor at Harvard at age 28 and is regarded by many as one of the nation’s most brilliant economists, returned to Cambridge as a University professor in 2007. Derek C. Bok, who led Harvard from 1971 to 1991, stepped in as interim president following Summers’ resignation.
—Staff writer Peter F. Zhu can be reached at email@example.com.
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