Penn State trustees approve new compensation package, contract setup with Bendapudi
The Penn State Board of Trustees approved a new compensation package for the university president and a new contract setup.
Penn State President Neeli Bendapudi will not receive a base salary increase this year, as she indicated she would decline any proposed increase, but her terms of employment will move to an “evergreen contract.”
The Penn State Board of Trustees approved the presidential compensation plan during its meeting Friday, as recommended by the subcommittee on compensation Thursday. The contract for Bendapudi has been extended through June 2028 and includes a rolling five-year term. Unless the board acts by June 30 of each year, the contract will extend automatically for one additional year, according to a press release.
With that, Bendapudi’s base salary will remain at $950,000. An additional one-time lump sum “completion payment” of 1,500,000 (300,000/year for years 6-10) at the completion of her 10th year, if she remains employed as president through June 30, 2032, was approved as part of the compensation plans.
She will also receive an increase in her supplemental retirement plan, from $350,000 to $555,000, retroactive to July 1, 2023.
The new terms of the contract are an “indicator of the board’s long-term commitment to and support of Bendapudi’s leadership at Penn State,” according to the release. Bendapudi was named president of Penn State in December 2021 and officially started in May 2022, becoming the first woman and non-white president in the university’s history.
Her tenure has not been without criticism, notably after her decision to cancel the Center for Racial Justice, which was championed by the previous president and a university committee.
While the subcommittee on compensation unanimously approved the compensation plan on Thursday, the board’s vote on Friday was not unanimous.
Trustee Barry Fenchak voted against the plan, stating Penn State is facing “significant and systemic budgetary and fiscal issues,” and the impact of that situation is a growing concern among stakeholders. He said he’s often asked: what does Penn State need to do to get in a better financial situation?
“...First and foremost we need to not make unwise decisions,” he said. This could be perceived as a tone deaf and unwise decision, he said, and didn’t think they should do it.
He was the sole vote of opposition.
In a press release, Mary Lee Schneider, chair of the subcommittee on compensation, called Bendapudi a “thoughtful leader” who has spearheaded many initiatives that will enhance the university’s reputation and impact.
“In recognition of President Bendapudi’s outstanding and decisive leadership, we chose to enhance her deferred compensation, increase her completion bonus, and establish an evergreen contract. These deliberate steps bring some assurance that we can retain her extraordinary talent for this presidential position that is so complex and challenging,” Schneider said.
Matthew Schuyler, chair of the board, in the release said Bendapudi’s dedication to making Penn State a model for student success has been “outstanding.”
“In this demanding era for all of higher education, which requires presidents to set and execute transformational goals, Neeli’s decisive leadership — marked by foresight and willingness to make tough, but necessary, decisions — ensures Penn State’s continued prominence as a world-class institution.”
Last month, Penn State implemented general salary increases for faculty and staff after the board of trustees previously approved 3% pools for unit executives to give raises based on performance. Those raises came later than usual due to a delay in the state legislature approving funding for Penn State and other state-related universities.
This story was originally published February 16, 2024 at 2:56 PM.
