Penn State’s board of trustees voted Friday to increase the financial bonus President Neeli Bendapudi will get for her second five years with the university from $1.25 million to $1.5 million and increase her retirement plan benefit from $350,000 a year to $555,000 a year, while not changing her current salary of $950,000.
The chair of the subcommittee on compensation Mary Lee Schneider said the recommendation was unanimous and board Chairman Matthew Schuyler spoke highly of Bendapudi and her work. But one trustee spoke against the increases in deferred compensation, pointing to the financial challenges the university is facing. The university has cut the budgets of many colleges and campuses, and has not ruled out the possibility of layoffs.
Bendapudi is already slated to get a $1.25 million payment after being with the university for five years.
The increase in the retirement plan benefit took effect July 1, 2023.
Bendapudi has been president of Penn State since May 2022.
When she was named to the job, the board of trustees approved a five-year contract. Schneider said the new terms include having an evergreen five-year contract that will be automatically extended by one year each year.
She said the changes will “better align President Bendapudi’s overall compensation to the market for presidencies of top tier complex institutions.”
Chairman Matthew Schuyler spoke highly of Bendapudi and her work earlier in the meeting.
“On behalf of the board I also want to commend and express support for President Bendapudi and her senior leadership team for the work they are doing in partnership with students, faculty and staff to articulate a roadmap that will position Penn State for continued success in an ever changing and challenging higher education landscape,” he said.
The salary increase comes as Bendapudi has been leading the university’s efforts to overhaul its budgets. That has included funding cuts of 4% or 5% to many colleges and programs. The Commonwealth Campuses are slated to see a 14.1% overall cut, and the university is looking at how to operate them in the future. And the university plans to hire an outside consultant to assist with a total review of the university’s academic programs.
That has led to calls from some faculty for more details about all of these plans.
On Wednesday, the Faculty Senate approved motions calling for more information and more involvement in the changes.
Board member Barry Fenchak, who spoke against increasing Bendapudi’s financial bonuses, pointed to the budget challenges the university is facing and the impact they could have.
“Given the environment that we’re currently in, especially with even tougher fiscal decisions awaiting down the road … that this would be in total perceived as somewhat tone deaf perhaps and unwise decision and action,” Fenchak said.
