University Presidents Under Fire for High Salaries

(UWIRE) President Barack Obama announced last week that the government will cap annual salaries at $500,000 for top administrators at companies that receive large amounts of federal stimulus money.

The new policy, however, will not affect the annual salaries of college presidents – including that of University of Pennsylvania President Amy Gutmann – whose universities are among the possible recipients of federal funds.

Conservative columnists are using this announcement as an opportunity to take a stab at university presidents who receive an annual salary of more than $500,000.

Gutmann earns just less than $1.2 million per year.

She announced last December in an e-mail to the Penn community that in response to the economic downturn, neither she nor the deans and senior officers at the university will receive any salary increases this year.

‘The steps we have taken so far to control costs are in direct response to the downturn in the economy and not linked in any way to the possibility of federal stimulus dollars,’ university spokeswomen Lori Doyle said in an e-mail.

She said Penn is a private institution and not supported by taxpayer dollars, except for some funding from the state, which is principally used to support the School of Veterinary Medicine.

‘There’s really little comparison that can be made between corporations that are getting bailed out and non-profit colleges and universities,’ said Tony Pals, director of public affairs for the National Association of Independent Colleges and Universities.

Pals also said he has not heard an outpouring of complaints from campus communities since Obama’s announcement.

‘There have been complaints about CEO compensation for a number of years now, and the Obama announcement has given critics the opportunity to repeat their concerns,’ Pals said.

But that hasn’t stopped critics from calling on university presidents to do more during this economic crisis.

Although Obama’s announcement will have no affect on the salaries of university presidents, many Ivy League schools have recently cut salaries in response to the economic recession.

Yale University announced last week that it would cap salaries for both faculty and staff in the next fiscal year as part of its effort to reduce personnel costs by 5 percent.

‘There have been a number of institutions that in the past six months have announced salary freezes,’ Pals said. ‘In some cases, reductions for top executives, but those freezes and reductions have been a result of the economic downturn.’

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