Executive Compensation at Hillsdale College

Hillsdale College, a small private liberal arts college with 1,600 students in southern Michigan (Hillsdale) is the college virtually no one heard of 20 years ago.  Founded by abolitionist, Free Will Baptist preachers nearly 200 years ago in 1844, Hillsdale until recently maintained a small word of mouth following among conservatives attracting students (and conservative parents of smart (avg ACT 30-34, mid-range SAT 1370-1480 – 89-96 percentile, mid-range GPA 3.9-4.0) young people) who want a conservative liberal arts education, which is kind of an oxymoron. Approximately 20% of applicants are accepted, of which 62% opt to enroll.

In “The Citadel” – an article written by Emma Green that appeared in the New Yorker recently – Hillsdale is portrayed as having several hallmarks including a devotion the the western canon (music, philosophy, and works of art that are highly valued in western culture), an emphasis on primary sources rather than an academic’s interpretation, and a focus on producing able, virtuous citizens of students.

There are 31 members of the governing body, 28 of whom are independent, although 34 are listed on the Form 990 (due to timing differences).  29 of the 34 (85%) are male while 5 of the 34 (15%) are female.

In 2021, Hillsdale College reported $368 million in revenue and $184 million (not including $8 million in depreciation) in expenses.

The largest expense is compensation.  1,964 employees received $61 million in compensation, or an average of $31,000.  99 employees received more than $100,000 in compensation with the 10 most highly compensated reported to be:

• $1,131,0011:  Larry P Arnn, President
• $  554,463:  John Cervini, VP for Institutional Advancement
• $  314,108:  Robert Norton, VP and General Counsel
• $  307,877:  Matthew Spalding, Dean of Education Programs
• $  296,972:  Christopher Van Orman, Provost
• $  286,630:  David M Whalen, AVP for Curriculum
• $  277,274:  Richard P Pewe, VP of Administrative Affairs and Secretary
• $  274,620:  Doug Banbury, VP of Admissions/Business Development
• $  267,199:  Mary Ewers, Director of Parent Relations
• $  223,448:  Patrick H Flannery, VP for Finance and Treasurer

9 of the 10 most highly compensated employees are male, which doesn’t appear to be surprising given that 85% of the board members are male.

The most highly compensated employee was Larry P Arnn, the President who received $1.1 million.  Over the past 5 years, Mr. Arnn has received more than $5 million in compensation:

• $1.1 million:  2021
• $1.1 million:  2020
• $1.1 million:  2019
• $1.0 million:  2018
• $1.0 million:  2017

Hillsdale College paid for first class or charter travel, companion travel, and health or social club dues or initiation fees. In addition, the President was provided with a discretionary spending account, a residence for personal use and housekeeping services, and payments for business use of personal residence.

Cleves Delp, a trustee received $177,406 in investment advisory service fees and $21,960 for a townhouse rental.

96 independent contractors received more than $100,000 in compensation with the five most highly compensated reported to be:

• $10.8 million:  Next After LLC, of Plano, TX for consulting and marketing
• $ 5.8 million:  Bon Appetit, of Charlotte, NC for food service
• $ 4.3 million:  RR Donnelly, of West Amherst, NY for printing/mailing
• $ 2.5 million:  Darwill, of Hillside, IL for printing/mailing
• $ 2.1 million:  Foulke Construction, of Hillsdale, MI for construction

To read the IRS Form 990 (2020 for the June 30, 2021), click here.