Executive Compensation at Princeton

With all the talk about how much it costs for a college education (about $250,000 for 4 years of tuition, room, and board at the top ranked private universities including Princeton University), it seems only natural that people would start asking why a 4-year degree costs so much?  The answer isn’t as complicated as some people want you to think.

In the most simplistic terms, the answer is:  you’re supporting a huge education machine where, in the case of Princeton, half of the total expenses ($920 million of the $1.8 billion in expenses (not including depreciation) are compensation-related costs for the 14,331 employees in 2016 (an average of $64,000 each). The next largest expense categories were grants (primarily to domestic individuals for undergrad scholarships and graduate fellowships) which totaled $320 million and office-related expenses (office, occupancy, IT, insurance) which came to $195 million, and interest ($143 million).

In 2016, Princeton reported $2.5 billion in revenue and $1.8 billion in expenses (not including $150 million in depreciation). The year before (2015), Princeton reported $3 billion in revenue and $1.8 billion in expenses (including depreciation).  Although the organization relies on investment income from the $22 billion in investments to partially cover the costs of operating the university, Princeton appears to spend about $500 million to a billion less than what they receive every year.

The IRS Form 990 (2015 for the year beginning July 1, 2015 and ending June 30, 2016) reports 1,586 individuals received more than $100,000 in compensation, with the 30 most highly compensated individuals listed below:

• $5,783,930:  Andrew Golden, President, P U Investment Company
• $3,179,977:  Jonathan Erickson, Managing Director of Princo
• $2,439,007:  James Millar, Managing Director of Princo
• $1,953,799:  Edward Karns, Managing Director of Princo
• $1,388,672:  Jennifer Birmingham, Managing Director of Princo
• $  971,835:  Christopher Eisgruber, President
• $  875,929:  Arnold R Douglas, Professor of Public Affairs
• $  699,169:  Shirley Tilghman, Professor, Former President
• $  645,745:  David Lee, Provost
• $  642,763:  Carolyn Ainslie, VP for Finance and Treasurer
• $  580,427:  Ramona Romero, General Counsel
• $  575,568:  Elizabeth Wood, VP for Office of Development
• $  557,138:  Charlotte Treby Williams, EVP
• $  554,841:  Deborah Prentice, Dean of the Faculty
• $  548,601:  David Dobkin, Professor and Former Dean of Faculty
• $  486,675:  Robert Durkee, VP and Secretary
• $  458,299:  Pablo Debenedetti, Dean for Research
• $  449,627:  Steward AJ Smith, VP, PPPL/Professor/Former Dean of Res
• $  444,440:  Lianne Sullivan-Crowley, VP for Human Resources
• $  443,988:  James Dominick, VP for Info Technology and CIO
• $  407,194:  Michael McKay, VP for Facilities
• $  406,511:  Sanjeev Kulkarni, Dean of the Graduate School
• $  406,320:  William Russel, Professor and Former Dean of Grad School
• $  395,974:  Jill Dolan, Dean of the College (as of 7/1)
• $  377,463:  Peter McDonough, Former General Counsel
• $  376,393:  Nilufer Shroff, Chief Audit and Compliance Officer
• $  360,935:  Chad Klaus, VP for University Services
• $  323,766:  Nancy Weiss Malkiel, Former Dean of College
• $  278,032:  Cynthia Cherrey, VP for Campus Life (thru 8/15)
• $  245,248:  Valerie Smith, Dean of the College (thru 6/30)

As illustrated above, the most highly compensated individuals were the ones working for the Princeton University Investment Company who managed about $22 billion in investments (investment income in 2016 was reported to be $1.3 billion or about 6%).

Of the 30 individuals listed above, 18 are men (60%) and 12 are women (40%). Of the ten most highly compensated individuals, 7 were men while 3 were women. At the bottom of the most highly compensated individuals, 6 were men and 4 were women.

The Form 990 also reports Princeton paid for first class or charter travel  and travel for companions (although it is unclear how much of the $22.6 million spent on travel was for first class or charter travel). In addition, Princeton provides a housing allowance or residence for personal use (which is not unusual) and participates in tax indemnification and gross up payments.  For details on these perks, see the Form 990, Schedule J, Part III Supplemental Information.

Princeton provided $59,584 in education scholarships to interested persons (typically relatives of employees or trustees).

3 spouses (2 of key employees and 1 of an officer) received compensation ($105,100, $172,000, and $267,200) as an employee.

Princeton provides loans and mortgages to eligible (not defined on the Form 990) employees (including officers and key employees):

• Ramona Romero (Officer): Provided an $880,000 mortgage. Current balance due is $868,318.
• Carolyn Ainslie (Officer):  Provided a $675,000 mortgage. Current balance due is $628,398.
• Deborah Prentice (Key Employee):  Provided a $601,250 mortgage. Current balance due is $501,052
• Deborah Prentice (Key Employee):  Provided a $125,000 recruitment loan. Current balance due is $6,250.
• James Dominick (officer):  Provided a $476,028 mortgage. Current balance due is $456,649.
• Chad Klaus (officer):  Provided a $474,835 mortgage. Current balance due is $414,391.
• Shirley Tilghman (former officer):  Provided a $417,000 mortgage. Current balance due is $389,996.
• Jill Dolan (Key Employee):  Provided a $257,667 mortgage. Current balance due is $235,325.
• Jill Dolan (Key Employee):  Provided a $150,000 recruitment loan. Current balance due is $37,500.
• Officer Ferpa (Officer):  Provided a parent loan of $120,000. Current balance due is $85,529.
• Officer Ferpa (Officer):  Provided an education loan of $2,100.  Current balance due is $1,375.

To read the IRS Form 990 (2015), click here.