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September 27, 2013

Purdue trustees establish metrics for Daniels' at-risk pay

WEST LAFAYETTE, Ind. — When President Mitch Daniels came to Purdue, he requested trustees lower his base pay and designate 30 percent of that money as "at-risk," meaning he would have to meet certain goals in order to earn any portion of those funds.

On Friday (Sept. 27) the university's trustees approved the set of weighted goals that will be used to determine how much of that at-risk pay Daniels could earn annually. The performance metrics fall into five broad categories: four- and six-year graduation rates, reduction of student debt, fundraising, academic excellence, and demonstrated student outcomes in knowledge and understanding.

"All of these measures directly impact students' ability to have affordable access to Purdue and to receive a quality education once they arrive here," said Thomas Spurgeon, chairman of the Board of Trustees. "There are only two universities of which we are aware that compensate their presidents in a similar way. It sends a powerful message to parents and Purdue supporters that President Daniels is willing to tie his compensation to the success of our students and the university as a whole."

Trustees initially offered Daniels a salary of $555,000, which Daniels requested be lowered to $546,000, with $126,000 being placed at-risk. Spurgeon said trustees will annually evaluate the president's performance relative to the weighted goals to calculate how much of the at-risk pay Daniels might receive and that a perfect score would be difficult to achieve in any given year.

For 2013-14, the fixed portion of the president's pay will remain at $420,000 since Daniels elected to waive eligibility for a university-wide 1 percent pay increase and instead allocate that money to the university's Student Affordability and Accessibility Fund.

"Each year the president's salary starts back at the base level, and then we will determine what portion of the at-risk funds should be awarded based on measurable progress in each of these areas," Spurgeon said. "The critical part of this process was examining a variety of possible metrics, deciding which ones measure things that matter, coming up with a way to meaningfully measure progress for each goal, and then deciding what weight to assign to those goals."

According to the most recent figures available, Daniels' base salary ranks ninth among base salaries for Big Ten public university presidents (data for Pennsylvania State University was not available).

"Tying my pay to these goals allows Purdue to make a strong statement about what is important and about the need for us all to be responsible for results," Daniels said. "Higher education is entering a new era of affordability and accountability, and we want Purdue to be a national leader in these areas." 

Writer: Brian Zink, 765-494-2080, bzink@purdue.edu  

Sources: Thomas Spurgeon, trustees@purdue.edu 

Mitch Daniels, president@purdue.edu