Faculty, Staff Salaries Frozen

Faculty and staff salaries will be frozen next year for faculty making more than $125,000 a year and staff making more than $75,000 a year, President Susan J. Hockfield announced at Wednesday’s faculty meeting. MIT’s $10 billion endowment has lost 20 to 25 percent of its value, Hockfield said in a letter to the community sent yesterday.

The freeze affects more than half of the faculty: “40% of faculty, 50% of administrative staff and an overwhelming majority of support staff will be eligible for modest raises for the coming year,” Hockfield said in her letter.

Hockfield herself will decline a salary increase this year and next year, she said. In the fiscal year ending June 30, 2007, Hockfield was paid $808,698, including $100,000 in deferred compensation, according to MIT tax forms. That was 7 percent more than her 2005–6 salary of $753,124, which also included $100,000 in deferred compensation.

“Members of Academic Council, senior administrators and department heads will forgo salary increases next year” as well, said Hockfield in the letter.

The Institute plans to cut 5 percent of spending from its general operating budget, or $50 million, for the fiscal year beginning July 1, 2009, the president and provost announced in November.

MIT also plans to reduce spending by another $50 million in the next year and another $50 million in the year after that, but only if endowment performance remains poor, said Provost L. Rafael Reif. This would amount to spending cuts of up to $150 million over three years. The estimated 20–25% drop in endowment value mirrors other universities’ losses.

Salaries were last frozen in October 29, 2003, when the provost and executive vice president announced a one-year salary freeze effective immediately for on-campus faculty and staff earning more than $55,000 a year. In that announcement, raises were capped at $1,000 for employees earning less than $55,000 a year. The 2003–2004 economic downturn included staff cuts: 90 staff were laid off and 140 positions were eliminated, according to a 2005 News Office article reporting on former provost Robert A. Brown’s departure to Boston University. Brown said in a September 2004 report to faculty that 270 staff and faculty positions were lost, some to “natural attrition, non-renewal, or phasing out of positions.”

Of MIT’s current $1.1 billion general operating budget, almost half, $512.3 million, is spent on employee salaries and benefits. Might the next three years see fewer staff positions?

A group called the Institute-Wide Planning Task Force has been charged with suggesting ways to cut costs. “[I]t is inevitable that the Institute will have fewer employees in the future,” the task force’s website says.