Purdue trustees approve metrics-based compensation for Daniels

WEST LAFAYETTE, Ind. — Continued strides in affordability, student success, fundraising and institutional reputation led Purdue University trustees on Friday (Oct. 14) to provide President Mitch Daniels with 96 percent of a pool of $210,000 in at-risk funds based on a metrics-based review of the university’s performance over the past year.

Trustees Chair Mike Berghoff said Daniels demonstrated once again that the university can focus on affordability for students and their families while also investing in priority areas of student success and research excellence.

“I’ve said before and I’ll say again: We have an extraordinary institution and an extraordinary president,” Berghoff said. “Our goals, the president’s goals and the goals of the entire Purdue community should be in lock-step, that we are committed to making a Purdue education impactful and transformative, that we are among the best universities in the world in research excellence, and that we are considered among the leaders in all disciplines, and most specifically in the STEM disciplines.”

He pointed to increasing graduation rates for all students and for both first-generation and underrepresented minority students as evidence of continued student success. In addition, the university is celebrating its largest enrollment ever and its most academically prepared entering class, including a record 98 National Merit Scholars. For the fiscal year that ended June 30, Purdue again set records in fundraising, bringing in $332 million; in research productivity, with $403 million in external research funding; and in startup and commercialization activity, with 376 invention disclosures, 147 licensing agreements for Purdue innovations and 27 startups originating from Purdue-licensed intellectual property. Berghoff also noted the university’s strong performance in terms of faculty awards and honors and the amount of traditional and social media activity.

Trustees said Daniels will receive $201,600 of his at-risk funds for the fiscal year that ended June 30. Daniels’ base pay remains at $420,000, which at his request was set lower than his predecessor’s in his initial contract approved on Dec. 15, 2012. A year ago, trustees agreed to increase his available at-risk pay from 30 percent to 50 percent of his base pay and at the same time extended his contract through June 30, 2020. In addition, Daniels receives a $100,000 retention incentive, a program implemented by trustees a year ago to encourage him to stay at Purdue through the full term of his contract in 2020.

Daniels’ salary, one of few in higher education using an at-risk formula, is based on performance goals set by trustees in four areas: Student Affordability (25 percent), Student Success (25 percent), Fundraising (30 percent) and Institutional Reputation and Excellence (20 percent).

Tom Spurgeon, chair of the board’s Compensation Committee, said trustees awarded Daniels 22 percent for student affordability, 25 percent for student success, 29 percent for fundraising and 20 percent for institutional reputation and excellence. A document summarizing the measures is available at http://www.purdue.edu/uns/images/2016/161014-med-atrisk.pdf. Daniels received 88 percent and 90 percent of his available at-risk funds in 2013-14 and 2014-15, respectively.

“In each year of the at-risk pay program, we’ve seen improved results,” Spurgeon said. “Annual undergraduate student debt has dropped, cost of attendance is lower, our four-year graduation rate is up and more donors are giving to Purdue. Even with these successes, President Daniels, at his request, remains among the lower third of Big Ten presidents in compensation. Our Purdue students are the beneficiaries of that.”

Goals and weights are revised each year and mutually agreed upon by Daniels and the board. Any changes to the current metrics would be adopted before the December meeting of the Board of Trustees. 

Source: Mike Berghoff, trustees@purdue.edu