The total compensation earned by John E. Sexton, New York University’s president, ranks ninth among private-college chiefs, according to The Chronicle‘s latest review of presidential salaries. But that sum does not include an unusually structured retirement plan that is part of his benefits.
Pay data taken from 2007-8 tax forms, the most recent available from private colleges, show Mr. Sexton with compensation of just under $1.3-million, including $32,000 in benefit-plan contributions. The president, who is 67, also has the use of an $88,000 expense account. His relatively lucrative pay is on target for the market, compensation experts say, given that he has eight successful years as president of one of the nation’s largest private universities.
However, Mr. Sexton’s compensation differs from that of other presidents in how the university reports his annual retirement benefit of $800,000. He is entitled to start receiving those payments upon retirement if certain contractual obligations are met.
The retirement plan seems similar to the deferred pay that is part of the compensation packages of many college presidents, tax experts say. These common payments, reported to the Internal Revenue Service as deferred compensation, are counted toward the total pay amounts listed in The Chronicle‘s annual report.
But NYU officials say the payments are not deferred compensation, and argue that it would be incorrect to add them to his overall pay totals. The university’s tax forms list the retirement payments as a footnote rather than in the section on officials’ pay.
“It is structured so that he does not get both his salary and the annual retirement income,” said John Beckman, a university spokesman, in an e-mail message.
He said that the retirement pay would be reduced by the value of any other university retirement contributions the president receives, including his benefits as a faculty member, and that the plan would have no residual value after his death.
“The benefit was reported as it was because it is so difficult to value it under these circumstances,” Mr. Beckman said.
Rian M. Yaffe, who heads a consulting company that specializes in nonprofit compensation, agrees that the potential offsets make it difficult to affix a dollar value to Mr. Sexton’s retirement pay.
“That does not translate as an additional $800,000 of total compensation,” he says. “The way they’re reporting it doesn’t tell you how much it costs.”
The president’s retirement plan is not new. In 2004-5, the university disclosed to the IRS that Mr. Sexton was eligible to receive retirement payments equal to 75 percent of his annual salary, minus certain other payments and pending contractual obligations. At the time, his total annual compensation was $800,000.
Then, in 2006-7, new language appeared in NYU’s tax forms. essentially capping the benefit at $800,000. Potential adjustments include increases determined by the Consumer Price Index, and reductions because of other university retirement pay.
He also receives the use of a university-owned apartment and a car and driver for job-related purposes.
University officials cite several factors weighed by the Board of Trustees in setting Mr. Sexton’s pay level, including NYU’s large scope and New York City’s sky-high cost of living.
Mr. Beckman said the trustees also consider Mr. Sexton’s “widely admired record of achievement, his leadership within the higher-education sector, the enormous talent and energy he brings to his post, NYU’s advancement under his stewardship including internationally, his continued commitment to teaching three courses per year along with his other duties, and more than 25 years of dedicated and accomplished service as a law professor, dean, and now president.”
