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University President Drew G. Faust earned over $1.5 million in compensation in 2016, an increase from the $1.4 million she earned in 2015 and $1.2 million she earned in 2014.
Faust’s 2016 earnings include $905,461 in base salary, $189,982 in nontaxable benefits, $4,217 in other reportable compensation, and $400,000 in deferred compensation. Members of the Harvard Corporation—the University’s highest governing board—vote annually to determine the amount of deferred compensation that Faust will receive. In 2016, the Corporation voted to credit Faust with $400,000, upping the $300,000 credited to her in 2015 and bringing her total retirement and deferred compensation assets to $433,825 for the year.
Faust will step down as president in June, and Harvard Corporation member Lawrence S. Bacow will take her place.
The Internal Revenue Service requires the University to annually submit the Form 990 tax filings as a non-profit organization, making some University financial information—such as the earnings of chief University officers—public.
Dean of the Faculty of Arts and Sciences Michael D. Smith, who is stepping down at the end of the year, made $701,956 in total salary and benefits in 2016, while Provost Alan M. Garber ’76 made $871,960.
The deans of the Business School and the Medical School were the most highly paid deans across the University in 2016. Business School Dean Nitin Nohria made $800,052 in 2016.
Former Medical School Dean Jeffrey S. Flier, who stepped down in July 2016, made $680,589 in total salary and benefits while his temporary replacement Barbara J. McNeil made $456,026 as acting Medical School dean.
University Executive Vice President Katie N. Lapp, who oversees the University’s Allston operations, made $736,647 in total salary and benefits in 2016. In January, the University pledged to contribute $50 million to fund the construction of West Station.
Similar to 2015, the three of the highest earning faculty in 2016 all hail from the Business School and earned at least $1 million in total salary and compensation.
However, the salaries of employees at Harvard Management Company—stewards of the University’s $37.1 billion endowment—far outpaced the earnings University administrators and faculty alike.
Former HMC Chief Executive Stephen J. Blythe, who resigned in July 2016, earned $6,768,888 in 2016. Daniel Cummings, who was hired in 2009 to manage the University’s real estate investments, earned $23,853,527— more than 20 times more than Faust’s salary—in 2016. To calculate salaries, HMC assigns bonus compensation according to the success of asset class performance, which likely contributed to Cumming’s high salary.
Last February, HMC spun off its real estate team to Boston-based private equity firm Bain Capital, where Cummings will continue to manage the Harvard portfolio.
However, HMC Chief Executive N.P. “Narv” Narvekar announced in January 2017 that HMC has decided to discontinue this bonus compensation structure effective in fiscal year 2018, according to a HMC press release Friday. Instead, salary bonuses will be calculated by the performance of the overall endowment, not by asset class.
“An important part of the new investment model is building a compensation framework that fully aligns the generalist investment team with the performance of the overall endowment,” University Treasurer Paul J. Finnegan wrote in a statement. “This collaborative approach will further enhance HMC’s focus on generating long-term returns to support Harvard’s teaching and research mission”
—Staff writer William L. Wang can be reached at email@example.com. Follow him on Twitter @wlwang20.
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