Compensation Letter (December 2013)

Based on feedback and questions we have received through the town hall meetings and e-mail, there has been a request to post a copy of the e-mail sent to Chatham University alumni in December of 2013 concerning the background on Dr. Barazzone’s reported compensation in the most recent 990 form for the year of 2011.

The following is a copy of the e-mail:

December 13, 2013

Dear Chatham Alumni Community:

Around this time each year, The Chronicle of Higher Education reports the compensation of university presidents based on data reported in their institutions 990 Form (the annual IRS report that all higher education institutions are required to file).  Due to IRS reporting requirements, as well as the vesting of President Esther Barazzone’s retirement funding, I write to put the figure that will be reported in the Chronicle (and almost surely picked up by other media outlets) in greater context.

In 2006, Chatham University’s Board of Trustees approved the awarding of a deferred compensation retirement package to Dr. Barazzone to rectify previous inadequacies in retirement funding over the first 14 years of her service and to incentivize her to stay at Chatham to continue the progress and successes that have marked her presidency. After consultation with a national compensation authority, the Board designed a retirement package that was funded each year beginning in 2006, and that Dr. Barazzone would have forfeited if she left Chatham before her contract terms.

What you should understand when reading the figure that will be reported in the Chronicle is that the vast majority of Dr. Barazzone’s compensation in 2011 is made up of retirement contributions that were previously reported in her compensation each year since 2006. This “double-counting” of previously reported retirement contributions is the reason for the significant jump in Dr. Barazzone’s total compensation and ranking for the year of 2011. Since the funds would have been forfeited if Dr. Barazzone left Chatham, the IRS requires this type of additional reporting upon the fulfillment of her retirement package per the contract terms. If these previously reported retirement funds are not included, Dr. Barazzone’s actual compensation, including her base pay (which has remained relatively the same since 2006), would be at the same levels as previous years and no means warrant her inclusion in this list for the year of 2011.

For the past twenty years, Chatham is proud that we have been able to retain one of the longest serving and most productive presidents in the nation. Dr. Barazzone has continually demonstrated her leadership and commitment to the institution while guiding Chatham through a particularly transformative period of growth and success.  For that the Board is extremely thankful, delighted that our retirement funding package had the desired effect, and pleased that Dr. Barazzone will remain at Chatham for some time to come.

Sincerely,

S. Murray Rust
Chair, Chatham University Board of Trustees

 

  1. Jen, class of 1994 says:

    Dear Mr. Rust:

    As per the board’s recent admissions, Chatham is not doing well financially. You and the rest of the board are, of course, very wealthy and that’s the world you know. Unfortunately for all of us, I think it’s time that you learn how to be poor, learn to eat ramen and pb&j, learn how to wear a sweater or two when it’s cold. It’s time that you learn that, just because you want or feel that you deserve something, when you are poor you don’t get it.

    At this point, you are putting money over mission. You are starving the college to bloat the president. I understand that Dr. Barazzone’s compensation package is normal in the world of the wealthy, but in the world of the poor and the world of the middle class, it’s extravagant in light of the circumstances. If Dr. Barazzone truly believes in sustaining CCW, she will put the mission over the money. That’s what we do when we are true believers.

  2. Sandy Kuritzky says:

    In the spirit of “trust, but verify”, I have quickly reviewed the 990s filed with the IRS, focusing on the Executive Compensation (i.e. Dr. Barazzone’s) package. Follows is the information provided to the IRS, and the section of form reviewed:

    ’07 – Statement 19. Compensation: $299,026. Employee Benefit Contribution: $280,417.
    ’08 – Schedule J. Compensation: $272,431. Deferred Compensation: $235,500.
    ’09 – Part VII. Compensation: 343,032. Other Compensation: $323,065.
    ’10 – Part VII. Compensation: $337,485. Other Compensation: $264,432.
    ’11 – Part VII. Compensation: $1,535,242. Other Compensation: $276,890.

    Doing the arithmetic, the “other compensation” for the years ’07 – ’10 total $1,103,414.
    Subtracting $1,103,414 from the ’11 Compensation figure of $1,535,242 yields a Compensation figure for ’11 of $431,828. Adding a Deferred (Other) compensation figure of $276,890 yields a total compensation package of $708,718 for the ’11 tax year.

    I make no comment re: the reasonableness or appropriateness of Dr. Barazzone’s contract, I am merely citing publicly available information.

    Sandy Kuritzky, ’73

  3. Rachel Lenzi says:

    An interesting snippet from today’s Michigan Daily – the University of Michigan’s student newspaper – on incoming president Mark Schlissel and outgoing president Mary Sue Coleman.

    “His contract runs five years and for each, his stacks will stand at a base of $750,000, plus a $500,000 retention incentive payable after five years, complimentary health care and the President’s House. Coleman currently earns $603,000 a year, but has historically donated her salary increases back to the University.”

    That’s kind of a brilliant and innovative idea, donating salary increases back to the University.

  4. Kate M. says:

    He must truly care for the university and its students.

    That’s very honorable of him.

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