Despite receiving an offer annually, President Lou Anna K. Simon has remained adamant in refusing any increases in her salary.
At the December Board of Trustees meeting, Simon turned down a raise for the sixth year in a row. Her base salary will remain at $520,000, not including the $125,000 retention bonus she received at the end of 2013, which she plans on returning to the university as a donation.
Simon first took office in 2005 and hasn’t accepted a pay increase since 2007, although the trustees raised her retention bonus from $100,000 to $125,000 at the meeting.
In addition, the board voted to increase Simon’s retention bonus each year by the same percentage that is granted to other non-union faculty members.
“We know what the president is supposed to make,” Board Chairman Joel Ferguson said. “We try to pay her what she’s worth, but it’s very difficult because she won’t let us. She doesn’t want to be too far ahead (of other president’s salaries).”
Ferguson said the board set her salary in 2007OD based on the quality of her work. Ferguson said there is no established presidential salary, and the board strays away from comparing salaries of other Big Ten university presidents while still trying to maintain a competitive pay rate.
“We can’t base it on other schools because we are the ones who know what she is worth to us,” Ferguson said. “We’re not letting others set the bar as far as pay.”
Simon deferred comment on her salary decline to the university’s communications office.
MSU spokesman Kent Cassella said Simon has continually turned down pay raises because of her concern for university finances.
“During the past six years, President Simon has continually declined pay raises as MSU faced challenging financial circumstances,” Cassella said. “With the state of Michigan’s economy and the cuts made to higher education funding, the president felt it was proper to refuse a pay raise.”OD
Giving it back
Although university executives are adequately compensated for their work, many presidents in the Big Ten have a history of giving large portions of it back to the university for which they work.
University of Michigan President Mary Sue Coleman has donated $1.79 million since the beginning of her presidency in 2002.
Coleman was the sixth-highest paid university official in the U.S. in the fiscal year 2011-12, as her total compensation was $918,783, according to the latest research done by the Chronicle of Higher Education.
Coleman has donated her salary increases back to the university three times during her presidency, the first of which being in 2003 when she donated $500,000 to the Michigan Difference capital campaign, according to the Crain’s Detroit Business website.
She donated more than $15,000 in 2007 to financial aid for graduate and professional students, and gave $17,600 for scholarships for U-M’s study abroad program.
Similarly, Simon has a reputation of taking her retention bonuses and donating it to MSU.
Ferguson compared the president’s salary to a revolving fund — going from the university to Simon back to the university.
Simon and her husband both have a history of giving back to MSU and are members of the Clifton R. Wharton Donor Recognition Society. Their total cash gifts to MSU exceed $1 million and run throughout their entire career at MSU.
“An exact breakdown is not available,” Cassella said. “The Simons have been giving back to MSU for decades, in addition to charitable causes off campus as well.”
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Other Big Ten institutions
When compared to other universities in the Big Ten, Simon’s salary hovers right at the middle mark.
The highest presidential salary is $738,131 and is held by Morton Schapiro, President of Northwestern University since 2009.
The least paid is University of Nebraska-Lincoln Chancellor Harvey Perlman, who earns $349,579 a year.
Although each university individually decides their president’s salary, Michael Boulus, executive director of the President’s Council, State Universities of Michigan, said a few common factors go into determining the salary.
“Universities have individual standards of what they historically have paid,” he said. “They also might consider what they think it will take to bring a (competent president) in, and what other universities have paid.”
In addition to their base salaries, university presidents across the Big Ten receive bonuses and other forms of compensation.
Staying true to the middle-of-the-board aim, Simon came in at $672,000 during that same period, putting her fifth among public universities in the Big Ten.
