A group of alumni who have been protesting the “excessive” compensation packages received by Harvard Management Company executives during the recession received a response from a University official on Monday, which members of the group said was less than satisfactory.
The letter from the alumni argued, among other things, that no executive make more than the University president and that the money saved from reducing executive compensation be used towards stabilizing rising tuition costs, which the group said is a direct result of excessive executive compensation.
The group, which consists mainly of alumni from the Class of 1969, has been protesting what they call “exorbitant” executive compensation at Harvard for over seven years. Since the start of the economic crisis, the group has focused on the steadiness of executive salaries amid drops in the University’s endowment during the recession.
“The top five in the group and Harvard Management as a body did not suffer any significant decline in income as a result of the crash,” said David Kaiser ’69, a member of the group. “The argument that we’ve heard again and again, that compensation is based on performance, doesn’t seem to be a fact.”
In her response to the alumni, Vice President for Alumni Affairs and Development Tamara E. Rogers ’74 defended the HMC’s compensation model.
“We remain fully confident that the HMC model and compensation system saves significant money for the University, relative to the cost of external investment management, and provides the University with the highest level of investment expertise,” Rogers wrote.
University spokesperson Kevin Galvin confirmed the authenticity of the letter. He declined to comment further.
Kaiser said that his group was not pacified by the letter and will continue their campaign.
“It appears to be a no-lose situation for people working at the Harvard Management corporation,” he said. “Until executives are making what we feel is fair, we won’t drop the issue.”
While Kaiser and his group said they feel the money given to HMC managers is excessive, they do acknowledge that it is much more reasonable now than it used to be.
“There were much higher payoffs going on in the 2000s,” Kaiser said. “It’s come down a lot from there.”
The reduced compensation is due, in part, to the restructuring of the Harvard Management Company. HMC President and CEO Jane L. Mendillo has capped managers’ salary in years without economic growth and has created a policy to recover compensation from executives in the event of poor performance.
Rogers’ response to the alumni emphasized these aspects of HMC’s payment system, saying that it is the most economical method for managing the endowment.
—Staff writer Mercer R. Cook can be reached at email@example.com.