Executive Compensation at MIT
The Massachusetts Institute of Technology (MIT) is a private research university in Boston, Massachusetts that tends to attract the smartest of the smart. With an acceptance rate of 8%, MIT is selective – even at an annual cost (tuition, room and board) of about $70,000 annually, which equates to nearly $300,000 for an undergraduate degree.
The most recent IRS Form 990 (2015 for the year ending June 30, 2016) reports the school received $4 billion in revenue which primarily came from three sources:
- $2.1 billion: Program Services including tuition and fees, research contracts, auxiliary fees
- $1.0 billion: Contributions including $400 million from the government
- $0.9 billion (or $900 million): Gains on the sale of assets, investment income, royalties, and rents
Expenses totaled $3.4 billion (not including depreciation) and were allocated to 8 major categories (note: there are other expenses but these expenses are significantly less and insignificant compared to the 8 categories below):
- $1.5 billion (38% of revenue): Compensation
- $ 542 million (13% of revenue): Grants
- $ 530 million (13% of revenue): Office-Related Expenses, Facilities, Equipment, Lab
- $ 316 million (8% of revenue): Other Expenses
- $ 139 million (3% of revenue): Fees for Services
- $ 137 million (3% of revenue): Subrecipient Agreements
- $ 135 million (3% of revenue): Travel and Conferences
- $ 116 million (3% of revenue): Interest
As illustrated above, the highest expense for MIT is compensation (however, compensation expense as a percentage of revenue is only 38%). Compensation at most colleges and universities is about 50% of total revenue). Grants (primarily grants and other assistance to domestic individuals) of which $371 million was non-cash assistance, was the second highest expense followed by office-related, facilities, equipment and lab costs.
Compensation totaled $1.5 billion for the 24,689 employees, which equates to an average compensation of about $61,000 (compared to $75,000 at Yale, $68,000 at Penn, $64,000 at Princeton, and $46,000 at Georgetown). 3,812 individuals received more than $100,000 in compensation. The 23 most highly compensated individuals were:
- $1,805,827: Seth Alexander, President of MITIM Co
- $1,407,196: Steven Marsh, Managing Director, MITIM Co
- $1,041,017: Rafiel Reif, President
- $ 899,052: Thomas Wieand, Global Investment Professional MITIM Co
- $ 897,080: Ivan Werning, Professor, Economics
- $ 886,903: Daron Acemoglu, Professor, Economics
- $ 846,895: Steven Eppinger, Professor, Sloan
- $ 796,696: Susan Hockfield, President Emerita and Professor
- $ 704,842: Gregory Morgan, SVP and Sect’y of the Corporation
- $ 663,206: Martin A Schmidt, Provost
- $ 631,255: Israel Ruiz, Executive VP and Treasurer
- $ 543,562: Julie Lucas, VP for Resource Development
- $ 539,823: Eric Evans, Director of Lincoln Laboratory
- $ 506,981: Chris Kaiser, Former Provost, Professor
- $ 446,745: Cynthia Barnhart, Chancellor
- $ 440,076: Maria Zuber, VP for Research
- $ 424,316: Mark DiVincenzo, VP and General Counsel
- $ 420,186: Claude Canizares, Former VP, Professor
- $ 410,698: W Eric Grimson, Former Chancellor, Chancellor for Academic Advancement
- $ 409,111: Kirk Kolenbrander, VP
- $ 407,731: Sanjay Sarma, VP for Open Learning
- $ 356,585: Phillip Clay, Former Chancellor, Professor
- $ 345,007: Robert B Millard, Chairman of the Corporation
As listed above, 19 of the 23 (83%) most highly compensated individuals are male, while 4 of the 23 (17%) are female. Of the 10 most highly compensated individuals, 9 are male while 1 is a female (and she is 8th on the list).
The IRS Form 990 also reports the following key information:
MIT paid for first class or charter travel, travel for companions (business purpose only), personal services (i.e.maid, chauffeur, chef), housing allowance or residence for personal use, and tax indemnification and gross-up payments. For details about these items, see Schedule J, Part III of the Form 990 (link below).
MIT provided employee, Susan Hockfield with a $500,000 mortgage which has a balance due of $500,000.
Children of qualified faculty received $74,600 in scholarships.
Pamela Evans, an employee of MIT is a Research Group Leader at MIT Lincoln Laboratory. As such she received $259,163 in compensation. Ms. Evans is a family member of a MIT key employee.
MIT began the year with $17.6 billion in net fund assets (which many people refer to as the endowment). After adjusting for revenue not spent (about $357 million), a net unrealized loss on investments ($519 million), and a $515 million downward adjustment for post retirement plan changes, MIT ended the year with $16.9 billion in net fund assets, $3.1 billion of which is permanently restricted, $7.2 billion of which is temporarily restricted, and $6.6 billion which is unrestricted.
To read the IRS Form 990 (2015) for the year ending June 30, 2016, click here.
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