MIT’s top salaries released; Hockfield breaks $1M
Beyond senior administration, Sloan professors and MITIMCo officials top pay chart
MIT has released its compensation and salary data for calendar year 2010, as part of MIT’s 2010 tax return filed on May 15, 2012. (MIT’s 2010 tax year is its fiscal year 2011: from July 1, 2010 to June 30, 2011.) President Hockfield broke the $1 million dollar barrier in her total compensation for the first time for any MIT president.
MIT President Susan J. Hockfield had a “reportable compensation” of $832,629, up from $791,259 in 2009. (Her “total compensation” was $1,006,969, up from $931,603. Total compensation includes retirement and deferred compensation, as well as $120,685 of “nontaxable benefits.”)
Comparison with Harvard
Hockfield’s reported numbers are higher than Harvard President Drew Gilpin Faust, just as they were last year. Faust’s total compensation was $875,331.
Despite more total compensation, though, Hockfield’s base pay is actually lower than Faust’s. Hockfield’s base pay — her actual salary — was $652,129, whereas Faust’s was $705,714. The difference comes down to “other reportable compensation,” which adds to base pay to produce the reportable compensation. Hockfield’s was $180,500, compared with Faust’s $8,280. Much of that number is $125,000 paid into an “account for the benefit of the president.” Hockfield will be able to access that account when she ceases serving as President next month. Hockfield tops Faust on “retirement and other deferred compensation”: $53,655 versus $31,410.
Alexander is highest paid
Hockfield is not MIT’s highest paid employee, though. That person is Seth Alexander, president of the MIT Investment Management Company. Alexander’s total compensation was $1,316,463, which includes $709,001 of “bonus and incentive compensation.” That is primarily tied to the performance of MIT’s endowment “relative to peer and market benchmarks.”
Sloan School faculty
As always, the list includes several Sloan School of Management professors, who derive additional money from Sloan’s Executive Education program. That program teaches classes to management executives in major companies, frequently during the summer. Sloan faculty who participate do so as part of their outside professional activities. Under MIT policy, faculty can perform private work for up to one day a week. The compensation from Executive Education is comparable to what those faculty would receive from truly outside consulting jobs, but because they are paid by MIT, that income appears on MIT’s tax return. Professors Nelson Repenning PhD ’96 and Donald Lessard, 4th and 8th on the list, appear because of Sloan Executive Education.
But number three on the list is David C. Schmittlein, Dean of the Sloan School, with $716,442 in reportable compensation. Scmittlein’s large compensation does not derive from Executive Education. His base compensation is $578,317, and he has other reportable compensation of $138,125. No other deans appear in MIT’s top seven compensated employees. Schmittlein said he did not know what led to his particular compensation, but noted: “When I was joining MIT in 2007, the Institute was challenged to match my prior compensation. But I do not know exactly why the president and provost chose me as dean.”
Also on the list are two MITIMCo employees, Steven C. Marsh and Daniel Steele. Marsh is in charge of real estate, and Steele deals with private equity. Marsh and Steele both received $317,177 in incentive compensation. Their incentive compensation fell from last year’s $363,000, while Alexander (the MITIMCo President)’s incentive compensation rose by $213,354, or 43 percent of the 2009 figure. Alexander did not respond to a request to explain why his compensation rose and his lieutenants’ fell.
Additionally, a supplemental section of the 990 form states that the main numbers do not include additional incentive compensation for Alexander, Marsh, and Steele of $141,327, $59,713, and $59,713 respectively, because “these amounts can increase or decrease depending on the performance of the endowment and are contingent on continued employment by MIT.” While similar language appears on prior year’s tax forms, there is no information about how those numbers increase or decrease, so there is no real basis for comparison.
Several of MIT’s highest compensated employees, including President Hockfield, also served as directors of outside companies, and received around a quarter of a million dollars of compensation from those activities. See separate table.
MIT is required to report the compensation of its officers, its “key employees,” and its five highest compensated employees (who are not in the prior categories), as well as former members of those categories who received more than certain thresholds. As a result, only data for the top seven compensated employees is available. Beneath the top seven, some employees are missing from the data.
The Chronicle of Higher Education does a yearly comprehensive analysis of presidential salaries for private schools in higher education. Unfortunately, the Chronicle’s summary for 2010 is not yet available. The 2009 summary was published in December 2011 and is available at http://chronicle.com/article/Executive-Compensation/129979/ for Chronicle subscribers (the MIT Libraries subscribe). The Chronicle’s survey of public universities was updated last month, however.