Penn State’s Board of Trustees on Friday approved increases to university President Neeli Bendapudi’s overall compensation and implemented a new contract format designed to keep her at the helm long-term.
Bendapudi’s base salary of $950,000 will not increase, but her annual supplemental retirement plan, or deferred compensation, will get a $255,000 boost to $555,000 a year. Trustees also approved an increase in her second five-year completion bonus payable in 2032 from $1.25 million to $1.5 million.
She is already set to receive a $1.25 million completion bonus in 2027, at the end of her first five years as Penn State president.
Bendapudi also will now have an “evergreen” contract, “meaning each year with mutual agreement President Bendapudi will always have a five year contract,” Mary Lee Schneider, chair of the board’s Subcommittee on Compensation, said. The new contact setup is an indicator of the board’s long-term commitment to Bendapudi, Chair Matthew Schuyler said.
“It is clearly the hope of this board that President Bendapudi is our leader for many years to come,” Schuyler said. “We are grateful for her strategic, courageous, and compassionate leadership.”
The compensation increases were recommended after a performance review based on the 2022-23 goals set for Bendapudi and a compensation market assessment prepared by consultant Segal.
Schneider said the changes “will better align President Bendapudi’s overall compensation to the market for presidencies of top-tier complex institutions, inclusive of academic health care enterprises, 10-figure research enterprises and more.”
Bendapudi, Schneider said, informed the committee she would decline an increase to her base salary.
Noting that Bendapudi is already the second-highest paid Big Ten president, Trustee Barry Fenchak said Penn State is “not now nor have we been in recent years stingy with regard to presidential compensation, and I don’t think we should be.”
He questioned, however, the wisdom of implementing an executive compensation increase, even if it is small compared to the university’s overall budget, at a time when Penn State is faced with “significant and systemic budgetary and fiscal issues along with growing concern among Penn State stakeholders about the impact of that situation.”
University officials said in January that $94 million in budget cuts are planned beginning in 2025, including a $54 million reduction for the Commonwealth Campuses.
“First and foremost we need to not make unwise decisions,” Fenchak said. “I think that given the environment we’re currently in, especially with even tougher fiscal decisions waiting down the road, the disconcert among many of our constituents and elements of the penn state community that this would be in total perceived as a somewhat tone-deaf, perhaps, and unwise decision and action.”
Fenchak was the only trustee to vote non on the compensation and contract updates.
