Harvard Discloses Top Earners
The University’s annual tax filings covering the fiscal year ended June 30, 2019, and the accompanying disclosures released today, include the earnings of the most highly compensated Harvard administrators and those at Harvard Management Company (HMC), which invests the endowment and other assets.
The filings report data with a significant lag, and this year were further delayed for two months from the usual May 15 release date, reflecting the extension caused by the coronavirus pandemic.
Former president Drew Gilpin Faust, who stepped down in July 2018, made in total compensation in 2018 $3,612,247 (up from $1,707,070 in 2017.) That figure includes $987,027 in base compensation, a $1,000,000 long-term-service bonus, $34,814 in retirement and other deferred compensation, $110,646 in nontaxable benefits (including the personal value of University-provided housing as well as health and other employee benefits), and $1,479,759 in other reportable compensation, $1,200,000 of which was previously reported as deferred compensation, but was paid in fiscal year 2018.
Members of the Harvard Corporation voted each year on how much deferred compensation Faust would receive “to recognize exceptional service and encourage retention.” In 2017, the Corporation voted to credit her with $500,000, up from $400,000 in 2016 and $300,000 the previous year. This money is kept in a “deferred compensation account” that vests in three-year cycles—so the deferred compensation from 2015, 2016, and 2017 all vested in 2018.
University provost Alan M. Garber earned $926,217 in total compensation in 2018, up from $880,900 the previous year, and Michael D. Smith, the former dean of the Faculty of Arts and Sciences, who stepped down in August 2018, earned $761,770, up from $730,382 the previous year.
Other reported University administrators making more than $500,000 in total salary and benefits in 2018 include President Lawrence S. Bacow, who began his term on July 1, 2018, and earned $570,072; vice president and chief financial officer Thomas J. Hollister; senior vice president and general counsel Robert W. Iuliano; executive vice president Katie Lapp; former vice president for alumni affairs and development Tamara Elliott Rogers; vice president and chief information officer Anne H. Margulies; Harvard Medical School dean George Daley; and dean of Harvard Business School Nitin Nohria. The University’s two highest-paid faculty members, Baker Foundation professor Michael L. Tushman and White professor of business administration Carliss Y. Baldwin, taught at Harvard Business School and earned more than $1.5 million, which included for each of them a teaching salary, early retirement package, and insurance benefits.
Top salaries at HMC, a wholly owned subsidiary of Harvard, are always much higher than those of University employees. The organization manages the investment of Harvard’s endowment, the income from which makes up more than one-third of the University’s annual budget. In fiscal year 2019, $1.9 billion of this income was used to pay for Harvard’s academic programs, financial aid, faculty support, scientific research, and other needs, according to an HMC press release.
The 2018 earnings for HMC employees cover the second half of fiscal year 2018, when returns were 10 percent, and the first half of fiscal year 2019. Calendar year pay for 2018, however, is based only on performance through the end of fiscal year 2018 (through June 30, 2018), and does not account for endowment performance in fiscal 2019, when returns were 6.5 percent.
HMC president and CEO N.P. Narvekar made $7,201,795 in total compensation, $6.25 million of which was his regular performance pay for that year, and the remainder continuing reimbursement for pay he forfeited after leaving his former position as the head of Columbia’s endowment.
Pay for other reported HMC employees was as follows:
- Kavindi Wickremage, senior vice president, real estate: $5,843,513
- Benjamin Brady, senior vice president, real estate: $5,776,662
- Richard Slocum, chief investment officer: $5,003,037
- Carlos Saravia, managing director, generalist team: $4,632,067
- Adam Goldstein, managing director, generalist team: $4,631,019
In the past, HMC’s pay formula provided a base salary, with the large majority of bonus compensation depending on investment managers’ performance. The bonuses were awarded by measuring managers’ performance against overall market returns for their asset class; a portion of the bonus itself was held back in the endowment and subject to being “clawed back” if they underperformed in subsequent years. But a new compensation framework was implemented in fiscal year 2018. HMC’s 2018 Form 990 includes final payments under the old system, in particular to the former real-estate investment team, as well as compensation awarded according to the new system, under which bonuses are awarded according to the endowment’s overall performance, not according to asset class. Most of the organization is now working under this new framework.