Presidential Compensation
October 30, 2009
Dear Members of the Faculty and Professional Staff:
On Nov. 2 the Chronicle of Higher Education will publish online its annual report on the compensation of college and university leaders. The report draws its data from the Internal Revenue Service Form 990 filings required of all institutions of higher education, information that is publicly available. This year, which reports 2007-2008 (Fiscal Year ‘08) data, John Fry is likely to be reported as one of the most highly compensated presidents.
We believe President Fry will be among the highest-paid presidents because his reported compensation includes $372,000 of deferred compensation that was earned and reported over the previous five years. The IRS double counts deferred compensation, requiring it be reported both when it is accrued and when it is paid. When he was appointed in 2002, our contract specified that deferred compensation would accrue annually but that it would be paid only if he remained president for a full five years.
President Fry's FY08 total compensation being reported by the Chronicle is $1,067,824, including benefits. Absent the deferred compensation, the FY08 total compensation was $695,824, compared to FY07's $660,866. As in previous years, some of the FY08 amount has not been paid. The benefits include $41,736 in deferred compensation and $50,000 in performance-based compensation, both of which will be paid only if President Fry remains at the College until June 30, 2010. In addition, the benefits include accrued sabbatical leave of $67,073, which will be paid when the sabbatical is taken.
We expect the Philadelphia and Lancaster media may cover President Fry's compensation against the backdrop of the prevailing economic climate. I wanted to alert you beforehand to the anomaly of the IRS reporting and to the applicable compensation policy developed by the Board of Trustees.
President Fry is paid according to the compensation policy for recruiting and retaining senior College officers. Developed by the College's Compensation Committee of the Board of Trustees, the policy uses data compiled by independent third parties to measure compensation levels among peer and larger academic institutions. The policy is attentive to the charitable mission of the College and the performance of its executives, and adheres to all legal requirements. In addition, compensation is a function of assessing performance against agreed-upon goals.
In light of the exceptional progress the College has made under President Fry's leadership, we have structured his compensation over the years to help ensure that Franklin & Marshall would continue to benefit from his strong leadership for the foreseeable future.
The Trustees believe that John Fry is one of the most effective college presidents in the nation. The College has prospered greatly under his leadership:
- The student-to-faculty ratio has been lowered to 10:1, and the faculty's areas of expertise have expanded.
- The quality of students has improved, as measured by a 53 percent increase in applications and a 63-point gain in SAT average over seven years.
- Nearly one-third of the faculty enjoys new or renovated office, classroom, laboratory or meeting space, thanks to record fund-raising support for such buildings as the Barshinger Life Sciences and Philosophy Building and the recently dedicated Patricia E. Harris Center for Business, Government and Public Policy. (President and Mrs. Fry have made significant financial contributions to both projects.)
- In October, the Middle States Commission of Higher Education reaccreditation review team gave a ringing endorsement to the College's visionary move to nearly double its land holdings for future expansion, to the thriving College House system, which they found exceptional for its academic focus, and to the College's plans to increase its endowment generally and especially to fund need-based financial aid.
One of the tests of leadership is the ability to manage through a major economic setback. Not only have President Fry and his team done this exceptionally well, but unlike many other colleges and universities, Franklin & Marshall made no across-the-board reductions in staff and programs. Modest merit increases were given to faculty and professional staff for FY10.
Finally, thank you for the many ways that you contribute to the transformative experience of a Franklin & Marshall education. These are tough times for higher education but with strong administrative leadership and an outstanding faculty and staff, we believe Franklin & Marshall will emerge an even better institution for our students.
Sincerely,
Don Ziegler
Chair, Compensation Committee, 2007-2008
Vice Chair, Franklin & Marshall College Board of Trustees
