MIT president’s compensation up 19 percent from 2010 to 2011
Hockfield, making over $1 mil., leads familiar list of top salaries at the Institute in 2011
CORRECTION TO THIS ARTICLE: This article previously had an incorrect headline. Susan Hockfield was not the highest compensated individual at MIT in 2010. She is the highest compensated only for 2011, receiving $1,199,877. In 2010, Seth Alexander was the highest compensated, who received $1,316,463 compared to Hockfield's $1,006,969.
MIT has released the salaries of its highest compensated employees for the calendar year 2011, which are required to be publicly disclosed as part of its tax returns for the fiscal year 2012 (July 1, 2011 to June 30, 2012). During her last full year as president, Susan Hockfield was MIT’s highest compensated employee, receiving $1,199,877 in total benefits. This year is only the second time that a MIT president received total compensation exceeding one million dollars, with Hockfield receiving over a million in 2010.
Of her total compensation of $1,199,877, former MIT president Susan Hockfield received $1,042,110 in total paid compensation, with retirement and other nontaxable benefits making up the difference. Since the president is technically required to live on campus, MIT includes $70,000, counted as nontaxable benefits, for the housekeeping of the MIT-owned residence Gray House. Overall, Hockfield’s total compensation increased 19 percent (not including inflation), up from $1,006,969 the previous year.
Among collegiate presidents, Hockfield’s income is by no means the largest. According to the Chronicle of Higher Education, Graham B. Spanier, president of Penn State University, was the highest paid public college president, receiving over $2.9 million. Last year, thesalaries of Yale, Columbia, UPenn, and Dartmouth presidents eclipsed Hockfield’s.
However, both Hockfield’s paid and total compensation remain well above that of Harvard University President Drew G. Faust, who received $899,734 in total compensation. The large difference can be attributed to Hockfield’s “other reportable compensation.” Compared to Hockfield, Faust received $8,665 in addition to her higher base salary of $720,441. As part of Hockfield’s other reportable compensation of $346,056, MIT paid $125,000 into an account for the benefit of the president in the calendar year of 2011. The president is not able to access that account unless he or she has served a decade, or is no longer serving as president. Hockfield, who announced her resignation last February, stepped down as president last fall. Current MIT president L. Rafael Reif received $658,285 in total compensation during 2011 as the provost.
While MIT lists Hockfield as its highest compensated employee in 2011, Seth Alexander, president of the MIT Investment Management Company, was not far behind with a total compensation $1,175,941. Compared to the year before, his total compensation dropped $140,522, down 10.7 percent, from $1,316,463. However, unlike Hockfield, the plurality of Alexander’s salary came from bonus compensation, totaling $556,449, down from $709,001 the year before. According to MIT’s Form 990, which discloses select financial information of an organization to the public, the size of incentive compensation is dependent on the performance of MIT’s endowment “relative to peer and market benchmarks.” The MIT News Office reported that the Institute’s endowment grew 17.9 percent and 8.0 percent in the fiscal year 2011 and 2012, respectively. Steve Marsh, who manages MIT’s real estate also made the list, receiving $734,181 in total compensation.
MIT also reports that Alexander and Marsh received an additional $145,000 and $62,946 of incentive compensation in January 2011. These amounts were not included in the schedule that listed the top salaries of the Institute because “these amounts can increase or decrease depending on the performance of the endowment and contingent on continued employment by MIT.” In fact, considering this additional compensation, Alexander may still be MIT’s highest paid employee. Daniel Steele, managing director of private equity, who made the highest compensated list two years in 2009 and 2010, failed to make an appearance for 2011.
Several faculty members of the Sloan School of Management are also among MIT’s highest compensated employees. Dean of the Sloan School David Schmittlein, Professor Richard Locke, outgoing Head of Political Science, Professor Nelson Repenning, and Professor Steve Eppinger all received in excess of $700,000 in total compensation for the fiscal year of 2012.
For Professors Locke, Repenning, and Eppinger, much of the additional compensation comes through Sloan’s Executive Education Program. The Executive Education program offers professional development and new education opportunities for seasoned business professionals. Any income derived by professors from the Executive Education program is reported as “other reportable compensation.”
Some of MIT’s highest paid employees are also executives who receiving income from sitting on the boards of various companies. Those amounts are not reported in MIT’s released numbers.