Executive Compensation Review

Preliminary Report

July 13, 2015

Prepared by:
Mark Reilly, Principal, Head of Executive Compensation Practice
Ben Allen, Senior Associate
Erin Beth Garvin, Associate

Contents
1.
2.
3.
4.
5.
6.
7.
8.
9.

Executive Summary
Project Objective
Project Steps
University of Louisville Compensation Summary
Summary of Base Salary Findings
Summary of Total Cash Findings (Base + Annual Incentives)
Summary of Total Compensation Findings (Total Cash + Deferred Compensation and Benefits)
Findings and Preliminary Recommendations
Next Steps

University of Louisville

Executive Summary - Findings and Preliminary Recommendations

University of Louisville executives are generally at or above the market.

Matching executives to the market is not an exact science. We used three data sources to
mitigate this weakness: peer group 990s and survey data available from The Chronical of Higher
Education and CUPA.
Dr. Ramsey has been President since November 2002 and due to his long tenure and high
performance, is at the high end of the market.
The current compensation philosophy is (appears) to pay market salaries, incentives and provide
deferred compensation arrangements to retain key executives. We recommend the University
develop a formal executive compensation philosophy document which would be used as a guide
for future compensation decisions.
Deferred compensation plans are used by many Universities and are considered common
practice. A more detailed analysis should be conducted to determine if these plans are structured
to meet the Universitys objectives.
The peer group 990 data may be understated, as many report income from multiple sources.
Although we did review foundation 990s, its impossible to know if we captured the complete
picture from the 990s. A custom survey should be considered.

University of Louisville

Project Objective

The University of Louisville has retained Verisight to conduct a competitive market review for six
Executive Officer positions:
President
EVP Provost
SVP Finance and Administration/COO
EVP Health Affairs
EVP Research
VP Strategy and General Counsel

University of Louisville

Project Steps

Obtained and reviewed University of Louisvilles current compensation arrangements

Gathered competitive market data from three sources:

1. A peer group of 26 academic institutions, representing universities within the Atlantic Coast
Conference, as well as universities identified as peers due to size, geography, and other
characteristics.
2. The Chronical of Higher Education
3. College and University Professional Association (CUPA)

Compared current compensation levels to the market

Provided a summary of findings and recommendations

University of Louisville

University of Louisvilles Current

Executive Compensation Data

University of Louisville

University of Louisville Compensation Summary

President: Dr. Ramseys base salary is a combination of base salaries paid by the University of
Louisville and the University of Louisville Foundation. He is eligible for an annual performance
bonus in an amount up to 25% of his combined salary. He is a participant in the Key Employee
Deferred Compensation Plan and will receive annual deferred compensation in the amount of
$250,000 through 2020.

EVP Provost: Dr. Willihnganzs base salary is a combination of base salaries paid by the
University of Louisville and the University of Louisville Foundation. Her base salary paid by the
University of Louisville is comprised of a 10-month academic component and an administrative
supplement. She is eligible for an annual performance bonus in an amount up to 20% of her nonFoundation salary. She is a participant in the Key Employee Deferred Compensation Plan and
receives annual deferred compensation in the amount of $50,000. She has also received
additional contributions of $150,000 for the last three years.

SVP Finance and Administration/COO: Mr. Sands is a FY 2015 hire whose base salary is paid
by the University of Louisville. He is eligible for an annual performance bonus in an amount up to
20% of his base salary. He is a participant in the Key Employee Deferred Compensation Plan and
receives annual deferred compensation in the amount of $100,000.

University of Louisville

University of Louisville Compensation Summary (continued)

EVP Health Affairs: Dr. Dunns base salary is paid by the University of Louisville, with the
academic component accounting for 75% and the remaining 25% administrative supplement
being at risk and payable upon successful completion of goals agreed to at the beginning of the
fiscal year. He is eligible for an extraordinary performance bonus in an amount up to 10% of his
combined salary.

EVP Research: Dr. Pierces base salary is paid by the University of Louisville, with the academic
component accounting for 90% and the remaining 10% administrative supplement being at risk
and payable upon successful completion of goals agreed to at the beginning of the fiscal year. He
is a participant in the Key Employee Deferred Compensation Plan and receives annual deferred
compensation in the amount of $40,000.

VP Strategy and General Counsel: Ms. Strohm is a FY 2015 hire whose base salary is paid by
the University of Louisville. She is eligible for an annual performance bonus in an amount up to
$40,000.

The value of perquisites (car allowance, bridge loans, club memberships, etc.) received in the
past year was not provided and is not included in determining Total Compensation.

University of Louisville

University of Louisville Compensation Summary

University of Louisville

Data Sources

University of Louisville

10

Selected Peer Group

The University of Louisville selected a peer group of 26 academic institutions, representing

universities within the Atlantic Coast Conference, as well as universities identified as peers due to
size, geography, and other characteristics.

University of Louisville

11

Peer Group 990s and Published Survey Compensation Data

Verisight used public filings to collect compensation data for similar executive positions at peer
universities as reported. The data sources used in this study were:
IRS Form 990s
The Executive Compensation at Public and Private Colleges database published by The
Chronicle of Higher Education (reported for Presidents only)
The Administrators in Higher Education Salary Survey published by the College and
University Professional Association (CUPA)

Data from all public filings was aged to July 1, 2015 at an annual rate of 3.0% a year.

Verisight drafted a custom compensation survey that could be used to gather specific
compensation data, at peer universities willing to participate, for similar executive positions.
Verisight and The University of Louisville could partner to identify contact information for
prospective participants, which The University of Louisville indicated they would be able to
acquire, in an effort to maximize participation levels.

University of Louisville

12

Data Sources - Form 990s

Form 990s are filed by non-profit institutions, with key executive compensation typically disclosed
in the Schedule J. The components of compensation provided in the Schedule J include:
Base: Base compensation means nondiscretionary payments to a person (such as salary or
fees)
Bonus: Examples include signing bonuses and payments based on satisfaction of a
performance target (other than mere longevity of service).
Other: Examples include, but are not limited to, current-year payments of amounts earned
in a prior year, payments under a severance plan, deferred amounts, and earnings or losses
in a nonqualified defined contribution plan subject to section 457(f) when they become
substantially vested.
Deferred: All current-year deferrals of compensation for the listed person under any
retirement or other deferred compensation plan, whether qualified or nonqualified.
Nontaxable: Nontaxable benefits are benefits specifically excluded from taxation under the
Internal Revenue Code.

Compensation paid to university leadership positions often comes from multiple sources, the
university and the university foundation for example. These amounts are often reported in
separate Form 990s. In order to capture the complete compensation picture, Verisight
aggregated compensation amounts when reported in separate Form 990s.

University of Louisville

13

Data Sources Chronicle of Higher Education

The Chronicle of Higher Education compiles compensation data from surveyed public and private
institutions. The data is based on each institution's fiscal year, the most recent of which being
2013/2014. The components of compensation provided include:
Base pay: Total base salary provided, including compensation from private universityrelated foundations.
Bonus pay: The value of all bonuses and incentive compensation paid out.
Deferred compensation, paid out: Compensation that was set aside in previous years and
paid out during the fiscal year covered.
Severance pay: Payments made to the chief executive upon his or her resignation or firing,
as determined by his or her contract, separation agreement, or a legal settlement. This can
include severance pay, unused vacation pay, or other agreed-upon separation pay.
Retirement pay: Payments made by the university to a retirement plan that is available to
any university employee during the fiscal year. This can include 401(k) plans, state pension
plans, and other retirement plans that are broadly available. (As this is not paid out during
the reporting year, it is not included in "Total Compensation.")
Deferred compensation, set aside: This is to be paid out in future years, and can include
contributions to supplemental executive retirement plans. (As this is not paid out during the
reporting year, it is not included in "Total Compensation.")

University of Louisville

14

Data Sources - CUPA

The Administrators in Higher Education Salary Survey (AHESS), published by the College and
University Professional Association (CUPA), collects base salary data for 191 positions with
primary assignments requiring the management of an institution or of a customarily recognized
division within it.

CUPA allows users to create a custom peer group to collect base salary data. All but one of the
university peers identified (Virginia Commonwealth University) participated in the 2014/2015
survey. Verisight created a custom peer group based on the remaining 25 academic institutions
selected by the University of Louisville as peers.

Verisight was able to download individual participant base salary data for similar positions, which
are shown in the appendices; however, the individual institutions are not identified by name so as
to protect their confidentiality.

The AHESS survey only reports base salary data.

University of Louisville

15

Summary of Base Salary, Total Cash, and

Total Compensation Findings

University of Louisville

16

Summary of Base Salary Findings - Median

Position

Incumb
ent

Incumb
ent
Base
Salary

The Chronicle of
Higher
Education
(President Only)

Form 990s

CUPA

Median
Base
Salary

Compa
-Ratio

Median
Base
Salary

Compa
-Ratio

Median
Base
Salary

Compa
-Ratio

President

Dr. James
Ramsey

$648,961

$518,250

125.2%

$459,550

141.2%

$479,354

135.4%

EVP Provost

Dr. Shirley
Willihngan
z

$394,533

N/A

N/A

$353,816

111.5%

$404,500

97.5%

SVP Finance and

Administration/CO
O

Harlan
Sands

$350,000

N/A

N/A

$345,077

101.4%

$263,196

133.0%

EVP Health Affairs

Dr. David
Dunn

$1,047,280

N/A

N/A

$875,172

119.7%

$811,446

129.1%

EVP Research

Dr. William
Pierce

$316,050

N/A

N/A

$284,203

111.2%

$336,834

93.8%

VP Strategy and
General Counsel

Leslie
Strohm

$350,000

N/A

N/A

$478,011

73.2%

$254,975

137.3%

University of Louisville

17

Summary of Total Cash Compensation (Base Salary + Annual Incentives) Findings Median

Position

Incumbent

Incumbent
Total Cash

The Chronicle of
Higher Education
(President Only)

Form 990s

Median
Total
Cash

CompaRatio

Median
Total
Cash

CompaRatio

President

Dr. James
Ramsey

$804,961

$535,600

150.3%

$511,336

157.4%

EVP Provost

Dr. Shirley
Willihnganz

$460,436

N/A

N/A

$353,816

130.1%

SVP Finance and

Administration/COO

Harlan Sands

$420,000

N/A

N/A

$354,066

118.6%

EVP Health Affairs

Dr. David
Dunn

$1,047,280

N/A

N/A

$875,172

119.7%

EVP Research

Dr. William
Pierce

$316,050

N/A

N/A

$284,203

111.2%

VP Strategy and General

Counsel

Leslie Strohm

$390,000

N/A

N/A

$499,229

78.1%

University of Louisville

18

Summary of Total Compensation (Total Cash + Deferred Compensation and Benefits)

Findings - Median

Position

Incumbent

Incumbent
Total Comp

The Chronicle of
Higher Education
(President Only)

Form 990s

Median
Total
Comp

CompaRatio

Median
Total
Comp

CompaRatio

President

Dr. James
Ramsey

$1,103,633

$690,718

159.8%

$615,221

179.4%

EVP Provost

Dr. Shirley
Willihnganz

$690,026

N/A

N/A

$421,480

163.7%

SVP Finance and

Administration/COO

Harlan Sands

$546,250

N/A

N/A

$410,657

133.0%

EVP Health Affairs

Dr. David
Dunn

$1,125,826

N/A

N/A

$1,236,568

91.0%

EVP Research

Dr. William
Pierce

$379,754

N/A

N/A

$346,374

109.6%

VP Strategy and General

Counsel

Leslie Strohm

$416,250

N/A

N/A

$600,801

69.3%

University of Louisville

19

Deferred Compensation and Executive

Benefit Prevelance

University of Louisville

20

CUPA Survey - Benefit Prevalence

The table on the following page summarizes how many Universities offer deferred compensation
and incentive compensation plans.
Approximately 53% offer deferred compensation.
Approximately 30% offer incentive compensation.
CUPA is only one data source. Our experience working with other Universities is that deferred
compensation is common and incentive compensation usage is growing.

University of Louisville

21

Deferred Compensation Projected Payout

Dr. Ramseys contract calls for an annual University payment of $250,000 to his deferred
compensation account until 2020. Ignoring past contributions, his projected retirement is
estimated in the table below. Further analysis may be needed to confirm these projections.

University of Louisville

22

CUPA Survey - Benefit Prevalence

University of Louisville

23

Findings and Preliminary

Recommendations

University of Louisville

24

Findings and Preliminary Recommendations

University of Louisville executives are generally at or above the market.

Matching executives to the market is not an exact science. We used three data sources to
mitigate this weakness: peer group 990s and survey data available from The Chronical of Higher
Education and CUPA.
Dr. Ramsey has been President since November 2002 and due to his long tenure and high
performance, is at the high end of the market.
The current compensation philosophy is (appears) to pay market salaries, incentives and provide
deferred compensation arrangements to retain key executives. We recommend the University
develop a formal executive compensation philosophy document which would be used as a guide
for future compensation decisions.
Deferred compensation plans are used by many Universities and are considered common
practice. A more detailed analysis should be conducted to determine if these plans are structured
to meet the Universitys objectives.
The peer group 990 data may be understated, as many report income from multiple sources.
Although we did review foundation 990s, its impossible to know if we captured the complete
picture from the 990s. A custom survey should be considered.

University of Louisville

25

Next Steps

Review compensation data from preliminary report with the University of Louisville Compensation
Committee.
Decide on whether to conduct a custom compensation survey that could be used to gather
specific compensation data, at peer universities willing to participate, for similar executive
positions.

University of Louisville

26

Appendix A President

University of Louisville

27

Summary of Compensation Data Sources - President

The Chronicle of
Higher Education

Form 990s

CUPA

Base Salary
25th Percentile

$455,391

$424,173

$445,946

Median

$518,250

$460,808

$479,354

Average

$516,081

$496,760

$460,426

75th Percentile

$549,351

$563,518

$530,349

Total Cash Compensation (Base Salary + Annual Incentives)

25th Percentile

$468,019

$424,173

N/A

Median

$535,600

$511,336

N/A

Average

$543,544

$518,100

N/A

75th Percentile

$628,047

$585,903

N/A

Total Compensation (Total Cash + Deferred Compensation and Benefits)

25th Percentile

$568,094

$479,407

N/A

Median

$690,718

$615,221

N/A

Average

$662,393

$674,834

N/A

75th Percentile

$749,013

$887,521

N/A

University of Louisville

28

The Chronicle of Higher Education Compensation Data

University of Louisville

29

The Chronicle of Higher Education Compensation Data (continued)

University of Louisville

30

Form 990 Compensation Data

University of Louisville

31

CUPA Compensation Data

University of Louisville

32

Appendix B EVP Provost

University of Louisville

33

Summary of Compensation Data Sources EVP Provost

Form 990s

CUPA

Base Salary
25th Percentile

$265,208

$373,109

Median

$353,816

$404,500

Average

$323,092

$399,889

75th Percentile

$382,700

$425,744

Total Cash Compensation (Base Salary + Annual Incentives)

25th Percentile

$267,197

N/A

Median

$353,816

N/A

Average

$328,330

N/A

75th Percentile

$382,700

N/A

Total Compensation (Total Cash + Deferred Compensation and Benefits)

25th Percentile

$305,034

N/A

Median

$421,480

N/A

Average

$404,591

N/A

75th Percentile

$485,302

N/A

University of Louisville

34

Form 990 Compensation Data

University of Louisville

35

CUPA Compensation Data

University of Louisville

36

Appendix C SVP Finance and

Administration/COO

University of Louisville

37

Summary of Compensation Data Sources SVP Finance and Administration/COO

Form 990s

CUPA

Base Salary
25th Percentile

$303,025

$248,658

Median

$345,077

$263,196

Average

$330,590

$277,696

75th Percentile

$371,296

$305,970

Total Cash Compensation (Base Salary + Annual Incentives)

25th Percentile

$326,514

N/A

Median

$354,066

N/A

Average

$347,143

N/A

75th Percentile

$383,918

N/A

Total Compensation (Total Cash + Deferred Compensation and Benefits)

25th Percentile

$351,664

N/A

Median

$410,657

N/A

Average

$405,340

N/A

75th Percentile

$473,556

N/A

University of Louisville

38

Form 990 Compensation Data

University of Louisville

39

CUPA Compensation Data

University of Louisville

40

Appendix D EVP Health Affairs

University of Louisville

41

Summary of Compensation Data Sources EVP Health Affairs

Form 990s

CUPA

Base Salary
25th Percentile

$817,193

$705,317

Median

$875,172

$811,446

Average

$1,008,505

$822,187

75th Percentile

$1,066,484

$870,103

Total Cash Compensation (Base Salary + Annual Incentives)

25th Percentile

$817,193

N/A

Median

$875,172

N/A

Average

$1,035,027

N/A

75th Percentile

$1,093,006

N/A

Total Compensation (Total Cash + Deferred Compensation and Benefits)

25th Percentile

$988,084

N/A

Median

$1,236,568

N/A

Average

$1,257,814

N/A

75th Percentile

$1,506,298

N/A

University of Louisville

42

Form 990 Compensation Data

University of Louisville

43

CUPA Compensation Data

University of Louisville

44

Appendix E EVP Research

University of Louisville

45

Summary of Compensation Data Sources EVP Research

Form 990s

CUPA

Base Salary
25th Percentile

$268,588

$305,892

Median

$284,203

$336,834

Average

$305,960

$333,514

75th Percentile

$300,117

$361,954

Total Cash Compensation (Base Salary + Annual Incentives)

25th Percentile

$268,588

N/A

Median

$284,203

N/A

Average

$308,257

N/A

75th Percentile

$300,369

N/A

Total Compensation (Total Cash + Deferred Compensation and Benefits)

25th Percentile

$319,646

N/A

Median

$346,374

N/A

Average

$365,810

N/A

75th Percentile

$357,099

N/A

University of Louisville

46

Form 990 Compensation Data

University of Louisville

47

CUPA Compensation Data

University of Louisville

48

Appendix F VP Strategy and General

Counsel

University of Louisville

49

Summary of Compensation Data Sources VP Strategy and General Counsel

Form 990s

CUPA

Base Salary
25th Percentile

Insufficient data (2 data points)

$210,865

Median

Insufficient data (2 data points)

$254,975

Average

Insufficient data (2 data points)

$253,361

75th Percentile

Insufficient data (2 data points)

$295,628

Total Cash Compensation (Base Salary + Annual Incentives)

25th Percentile

Insufficient data (2 data points)

N/A

Median

Insufficient data (2 data points)

N/A

Average

Insufficient data (2 data points)

N/A

75th Percentile

Insufficient data (2 data points)

N/A

Total Compensation (Total Cash + Deferred Compensation and Benefits)

25th Percentile

Insufficient data (2 data points)

N/A

Median

Insufficient data (2 data points)

N/A

Average

Insufficient data (2 data points)

N/A

75th Percentile

Insufficient data (2 data points)

N/A

University of Louisville

50

Form 990 Compensation Data

University of Louisville

51

CUPA Compensation Data

University of Louisville

52