Executive Compensation at the University of Chicago (2020)

The University of Chicago (UC) is a private nondenominational research university that accepts about 8% of the students who apply. UC has approximately 7,000 undergraduate students and 10,000 graduate students.  The annual tuition with room and board for an undergraduate is about $80,000 annually which means a 4-year degree is about $320,000.

There are 46 voting members (trustees) of the governing body (board of trustees), 39 of whom are independent.  However, the Form 990 reports 50 trustees, which appears to be due to timing differences.  40 of the 50 (80%) are male while 10 of the 50 (20%) are female.

The IRS Form 990 (2019) for the year closing June 30, 2020 reported $3.7 billion in revenue (compared to $4.5 billion the prior year; the decrease of which is attributable to  lower contributions, gifts, and grants) which came primarily from 4 sources:

• $1.7 billion:  Contributions, Gifts, and Grants
• $1.0 billion:  Tuition and Fees
• $0.7 billion:  Sales/Education/Etc
• $0.3 billion:  Investment Income, Gains on the Sale of Assets and Inventory

Expenses during the same period were $3.9 billion (not including $200 million in depreciation) primarily from 7 areas:

• $2.200 billion (59% of revenue):  Compensation
• $   573 million (% of revenue):  Grants (primarily domestic student fin aid)
• $   445 million (% of revenue):  Office-related Expenses
• $   225 million (% of revenue):  Fees for Services
• $   157 million (% of revenue):  Interest
• $   153 million (% of revenue):  Actuarial Adjustment
• $     77 million (% of revenue):  Travel and Conferences
• $     55 million (% of revenue):  Support Services and Other Expenses

Compensation expense is typically about half of total revenue at most colleges and universities and historically UC was no different. But, with the drop in revenue (about $800 million), compensation took up a bigger chunk of revenue in 2020.

UC spent $2.2 billion on compensation for the 26,771 employees which equates to an average compensation of $82,000 (compare this to $82,000 at Yale, $73,000 at Penn, $64,000 at Princeton, and $51,000 at Georgetown).

4,745 individuals received more than $100,000 in compensation with the 25 most highly compensated listed below:

• $3,274,476:  Mark A Schmid, VP and Chief Investment Officer
• $3,111,160:   Kenneth S Polonsky, EVP Med Affairs*
• $2,457,634:  Robert J Zimmer, President
• $1,425,618:  Daniel Diermeier, Provost
• $1,862,148:  Joanna Rupp, Managing Director, Private Equity
• $1,846,847:  Valluvan Jeevanandam, Chief Cardiac and Thoracic Surgery
• $1,775,599:  Luca Vricella, Professor of Surgery
• $1,714,773:  David Barclay, COO, CRSP
• $1,543,734:  Michael Edelson, Investment Chief Risk Officer
• $1,069,147:  Madhav Rajan, Dean, Booth School of Business
• $  864,350:  Kimberly Taylor, VP and General Counsel
• $  860,486:  David P Fithian, EVP
• $  815,756:  James G Nondorf, VP Enrollment and Student Adv
• $  801,213:  Sharon Marine, VP Alumni Relations and Development
• $  785,330:  Belaji Srinivasan, VP Global Engagement
• $  737,708:  Ivan Samstein, VP and CFO
• $  733,241:  Juan DePablo, VP, National Laboratories
• $  724,697:  Derek Douglas, VP Civic Engagement
• $  571,334:  Paul Rand, VP, Communications
• $  493,325:  Ka Yee Lee, Provost
• $  489,252:  Catherine Callow-Wright, VP, Secretary of UC
• $  408,998:  John Kroll, AVP, Finance
• $  408,555:  Michele Rasmussen, Dean of Students
• $  316,481:  Darren Reisberg, Secretary of the University
• $  200,208:  Lori Berko, Secretary

A “*” indicates a portion of compensation was from a related/affiliate organization.

As illustrated above, 17 of the 25, or 68% of the most highly compensated individuals are male while 8, or 32% are female.  Of the 10 most highly compensated individuals at UC, 8 are male and 2 are female.

UC paid for first class or charter travel, travel for companions, health or social club dues or initiation fees, personal services, housing allowance or residence for personal use, and made gross up payments or tax indemnifications (see Schedule J, Part III of the Form 990 for more detailed information on these benefits).

Transactions with Interested Persons include:

A $1,250,000 loan was made to Madhav Rajan. The outstanding balance is $1,250,000.

A $100,000 loan was made to Juan De Pablo. The outstanding balance is $30,000.

James S Crown, a trustee of UC, and his family own an indirect interest in Tishman Speyer Crown equities, LLC (Tishman Speyer) which through a subsidiary owns an office building in Washington, DC in which UC leases office space. The lease between the university and Tishman Speyer was negotiated at arms’ length and was concluded on fair market terms.  UC paid Tishman Speyer a total of $235,595 in rent, taxes, and expenses for this property during the year ending June 30, 2020.

UC also leases office space in NY, NY from Tishman Speyer. The lease was negotiated at arms’ length and was concluded on fair market terms. UC paid Tishman SPeyer a total of $394,177 in rent, taxes, and expenses for this property during the year ending June 30, 2020.

Rachel Kohler, a trustee of UC, is CO and co-owner of CarelT Health LLC d/b/a NowPow, a healthcare company that connects patients with social services agencies and support organizations to improve health outcomes. For the year ending June 30, 2020, NowPow received $30,750 in fees from the University of Chicago, in connection with the University’s purchase of NowPow services.

Rodney Goldstein, a Trustee of UC, is Co-Managing Partner of Wealth Strategist Partners (WSP), an investment advisory firm. For the year ending June 30, 2020, Stuart E. Lucas, Co-Managing Partner and Chief Investment Officer of WSP, served as co-director of an executive education program at the UC Booth School of Business, for which WSP received $51,766 in fees.

Emmanuel Roman, a trustee of UC, is the CEO of PIMCO, a fixed income investment firm with which UC has invested a portion of its endowment. PIMCO received approximately $1,477,706 in fees in connection with the university’s investment for the year ending June 30, 2020.

David M Rubenstein, a trustee of UC, is a co-foudner and Co-CEO of the Carlyle Group, a private equity firm with which UC has invested a portion of its endowment. The Carlyle Group received approximately $354,753 in fees in connection with the university’s investment for the year ending June 30, 2020.

Paul Yovovich, a trustee of UC, is President, Principal, and Co-founder of Lake Capital, a private equity firm with which the university has invested a portion of its endowment.  Lake Capital received approximately $145,719 in fees in connection with the university’s investment for the year ending June 30, 2020.

Saadi Bartsch-Zimmer, the wife of UC President Robert J Zimmer, is employed by UC as a professor of classics. Ms. Bartsch-Zimmer was paid a gross salary of $326,844 for the calendar year 2019 in connection with her employment.

Tamar Polonsky, the daughter of Kenneth Polonsky, Dean, and EVP for Medical Affairs, is employed by UC as an associate professor in the Department of Medicine. Dr. Polonsky was paid $315,106 for the calendar year 2019 in connection with her employment.

Ariela Lazar, the wife of the former UC Provost, Daniel Diermeier, is employed by UC as a lecturer in the university’s Department of Philosophy and Graham School of Continuing Liberal and Professional Studies. Ms. Lazar was paid $82,252 for the calendar year 2019 in connection with her employment.

1,114 independent contractors received more than $100,000 in compensation. The 5 highest were reported to be:

• $40.9 million:  Turner Construction, of Chicago, IL for construction
• $22.9 million:  Bon Appetit, of Palo Alto, CA for food service
• $17.0 million:  Bulley and Andrews, of Chicago, Il for construction
• $13.5 million:  American Building Maintenance, of Chicago, IL for maintenance
• $ 7.7 million:  Mortensen Construction, of Elk Grove Village, IL for construction

To read the IRS Form 990 (2019 for the year ending June 30, 2020), click here.