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October 29, 2018

Executive Compensation at Stanford

by Anne Paddock

Most people probably don’t know that Stanford’s legal name is “The Board of Trustees of the Leland Stanford Junior University” doing business as Stanford University. And most people probably don’t realize that Stanford’s revenue exceeds expenses by more than a billion dollars a year (for the last several years) which has allowed the university to grow their endowment. With $31.7 billion in net fund assets, Stanford is one of the wealthiest universities in the US along with being what some would refer to as a money-making machine.

Tuition, room, and board is about $70,000 annually for the 7,000 undergraduate students (there are also 9,000 graduate students), although nearly half of the undergrads receive need based aid from Stanford.

In 2016, Stanford reported $7 billion in revenue, which primarily came from 3 sources:  $2.5 billion from program services (tuition, room, board, patient care, special programs, government contracts, etc), $2.6 billion from contributions, gifts and grants including $1.1 billion from government grants, and $1.8 billion from the gain on the sale of securities and investment income.

Expenses were nearly $5 billion (not including $345 million in depreciation) with expenses concentrated in grants ($438 million primarily in financial aid to students), office-related expenses ($488 million), fees for services ($300 million), SLAC non-slaty expenses ($213 million), interest ($97 million) and the single largest expense being compensation – $3.1 billion for the 37,025 employees which equates to an average of $84,000 each. However, 6,450 individuals received more than $100,000 in compensation with the 21 most highly compensated individuals listed below:

  • $5,680,441:  David Shaw, Director of Football
  • $3,691,818:  John Powers, President, SMC (through 5/1/15)
  • $2,279,608:  Tara Vanderveer, Head Coach of Women’s Basketball
  • $2,063,230:  Lloyd B Minor, Dean, School of Medicine
  • $1,941,408:  Frank Hanley, Chief, Pediatric Cardiology
  • $1,923,085:  Yiping Woo, Professor and Chair, Cardio Surgery
  • $1,475,833:  John Hennessy, President and Trustee
  • $1,464,121:  Gary Steinberg, Chair, Neurosurgery
  • $1,240,360:  Martin Shell, VP, Development
  • $1,007,352:  Robert C Reidy, VP, Land Buildings and RE
  • $  892,680:  Debra Zumwalt, VP, General Counsel
  • $  864,949:  John Etchemendy, Provost
  • $  793,008:  Randall Livingston, VP, Business Affairs, CFO
  • $  648,961:  Philip Pizzo, Professor and Former Dean, School of Medicine
  • $  629,401:  Richard Saller, Dean, School of Humanities and Sciences
  • $  537,885:  William Madia, VP, SLAC NAL
  • $  518,897:  Robert F Wallace, CEO, SMC (beginning 7/1/15)
  • $  505,140:  David Demarest, VP Public Affairs
  • $  474,853:  Howard Wolf, President of Stanford Alumni Association
  • $  227,995:  David Jones, VP, HR (through 7/10/15)
  • $  167,474:  Elizabeth Zacharias, VP for HR (beginning 10/19/15)

Of the 21 individuals listed above, 18 are men (86% – come on Stanford, you can do better than that…you’re in California, a progressive state) and 3 are women (14%). Of the 10 most highly compensated individuals who were compensated between $1 million and $5.7 million, 9 are men. And, of course the individual with the lowest compensation on the list is a woman.

Stanford reports the university paid for first class or charter travel and travel for companions. However, of the $76 million spent on travel, it is unclear how much was spent on first class, charter travel and travel for companions. The university also pays for personal services (i.e. maid, chauffeur, chef) and provides a housing allowance or residence for certain key employees, which is not unusual in a college setting. To read the supplemental information on the above information, please read Schedule J, Part III Supplemental Information of the IRS Form 990 (click on the link at the end of the post).

Several loans were made to officers or key employees for housing:

  • $1,710,000:  To John Etchemendy (current balance of $1,710,000)
  • $1,695,000:  To Lloyd Minor (current balance of $1,630,062)
  • $  700,000:  To Lloyd Minor (current balance of $700,000)
  • $1,150,000:  To Lloyd Minor (current balance of $1,150,000)
  • $  780,534:  To Lloyd Minor (current balance of $780,534)
  • $  719,466:  To Lloyd Minor (current balance of $616,685)
  • $  300,000:  To Richard Saller, former key employee (current balance of $30,000)
  • $    25,000:  To Richard Saller, former key employee (current balance of $25,000)
  • $1,000,000:  To Martin Shell (current balance of $800,000)
  • $  700,000:  To Robert Wallace (current balance of $700,000)
  • $  200,000:  To Robert Wallace (current balance of $200,000)
  • $  100,000:  To Robert Wallace (current balance of $90,000)
  • $3,000,000: To Robert Wallace (current balance of $3,000,000)
  • $  700,000:  To Elizabeth Zacharias (current balance of $700,000)
  • $  250,000:  To Elizabeth Zacharias (current balance of $250,000)
  • $  100,000:  To Elizabeth Zacharias (current balance of $100,000)
  • $  100,000:  To Elizabeth Zacharias (current balance of $100,000)

As listed above, several loans were made to the same individuals for housing (4 loans to Elizabeth Zacharias totaling $1,150,000; 4 loans to Robert Wallace totaling $4 million, 2 loans to Richard Saller totaling  $325,000; and 5 loans to Lloyd Minor totaling $5,045,000).

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

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