As I took my seat at the Thursday, May 7th public meeting of the Penn State Board of Trustees Equity and Human Resources Committee meeting (video link here), I spotted a group of professionals from The Segal Group, the New York based consultants Penn State uses to advise on employment and human resource issues. (Side note: Segal positions itself as Benefits and Human Resources consultants, and often appears when pre-determined Board actions, like Dr Bendapudi’s previous raises, need to be justified).
I guessed immediately why they were there: Dr Bendapudi must think she deserved another raise.
After all, it has been nearly nine months since her last raise (where she received an additional $1 million per year, setting her total compensation at a Big10 Conference record-breaking $2.8 million per year). I will also venture that more money for her inner circle ‘President’s Council’ would be a high priority at the moment—to quote Machiavelli: “A dictator can survive unhappy citizens longer than unhappy guards.”
At this point, I am beyond being surprised or dismayed by the blatant cash grab.
In 2021, Dr Bendapudi was making a reported $800,000 a year as the president of the University of Louisville. In August of that year, Dr Bendapudi accepted a new five year contract of over $1 million/year to insure continued stability at the university. Less than four months later she ‘flew the Cardinal nest’ and was named Penn State president. Since 2022 she has received three raises and an evergreen contract, bringing her current compensation to $2.8 million a year. This makes her the highest paid president in the Big10 Conference and in the top five of national public universities (many private universities do not disclose their presidential compensation). Coming to Penn State has indeed been, to borrow a favorite buzz-phrase, a ‘transformational experience’ for her.
What is Penn State getting for its money?
I want to be very clear: if Dr Bendapudi had provided meaningful impact on any of Penn State’s core missions I would not begrudge her reasonable salary increases. Heck, I’d be cheering. But let’s see what Penn State and Pennsylvania taxpayers are getting for their money since 2022:
Strained relations with the Pennsylvania Legislature, particularly with regard to her disingenuous claims regarding the Commonwealth campus closures decision.
Failed to prevent the graduate students and faculty from unionizing. Given how strongly her administration opposed the effort, this is a critical failure.
As the head of Penn State Health, she is responsible for the closure of the Penn State Hershey Med transplant and critical missteps at the cancer center, and now horrific reports of suboptimal operating room sterilization practices.
Undergraduate enrollment is down, targets are missed, and yield is in the toilet. Compared to our peers, the academic quality of incoming freshmen is abysmal and continues to decline. Dr Bendapudi is on her third Provost in four years, including a long-term interim.
Penn State Athletic spending is out of control and is carrying the biggest debt load in the history of higher education.
Penn State’s national academic ranking and reputation continue to flounder.
Compared to our Big Ten peers, philanthropic giving is anemic and Dr Bendapudi is now on her third fundraising chief (the last one barely having time to unpack before being replaced)
Penn State Dickinson Law School is on the edge of a very damaging situation. Dean Danielle M Conway was recently hit with a civil rights complaint over her strategic plan to make ‘anti-racism’ the school’s core mission. This comes at a bad time to draw the Federal government’s attention to what it considers to be schools that thumb their noses at their directives. (read here, here, here and here).
Penn State still hasn’t cracked the top 15 US research schools, a goal of Dr Bendapudi’s since she was hired (it is currently #25).
I could go on, but judging by her track record, paying Dr Bendapudi more money is only going to exacerbate these problems.
Why isn’t the Penn State Board of Trustees saying no?
Dr Bendapudi’s bosses on the Board of Trustees have a long history of avoiding setting concrete priorities and connecting accountability to them (see this article). In fact, they allowed Dr Bendapudi to write her own performance-based compensation rubric called the ‘Presidential Vision and Goals’, which tie to her Penn State Strategic Plan. Neither contain specific goals or quantifiable metrics. The plan seems to have last been updated in 2023 and ‘How we will measure success’ in the category of ‘Transforming Health Care Through Academic and Clinical Synergy’ still reads: “Measures are in development”.
From the point of view of a having recently been a trustee, I know that the thought of having to find a new president chills Board leadership to the bone. And I would be remiss to not acknowledge that higher education is a challenging business, demanding a capable administration that can lead through complex situations.
There are talented candidates out there who might turn Penn State around for the same salary. But these leaders would demand a major course correction, which would expose the chronic damage the leadership has done for over a decade. For example, closing the Commonwealth Campuses was not a traumatic event but instead the outcome of years of neglect and prioritizing University Park enrollment at the expense of the smaller campuses.
Penn State always finds money for the wrong things.
Perhaps the most intractable barrier to meaningful reform is the Board’s longstanding tendency to measure its success by how much it pays. It’s an unfortunate fact that Penn State always seems to find money for the wrong things: $700 million (and counting) for renovating thirty percent of Beaver Stadium, paying off the Sandusky victims, a $100 million art museum that has generated little philanthropy or interest … the list is long and the instinct to keep throwing cash at problems is strong.
Penn State has proven it hasn’t met an optics problem it couldn’t ignore
Back to the meeting.
The Segal consultants began by discussing executive compensation trends in ‘the marketplace’, which is the top 25 public universities and/or top 50 national universities that Penn State considers to be their peer group such as Ohio State, Cal Berkeley, UCLA, Yale, Penn, Stanford, MIT, Johns Hopkins, and Columbia University. Dr Bendapudi and her chief of staff, Michael Wade Smith, were present in that meeting and listened to Segal’s presentation.
At the 9:32 mark, you will hear Trustee Nareen Gursahaney make a startling comment:
“Just one thought for your consideration. If we’re going to use school ranking as part of the peer group criteria, I think we need to open it up. Because if you look at it the way it’s articulated today, you have to be within the top 25 of the public institutions, or top 50 of the national institutions. And if I’m correct, Penn State is ranked 26th and 60th. So we’re outside of our own peer group.”
“I just… the optics of that aren’t really great for us.”
Penn State Trustee Nareen Gursahaney
I believe Trustee Gursahaney hit the nail on the head. To be brutally frank: Penn State used to be a peer to these top schools, but isn’t any longer.
Will the Penn State Board of Trustees announce another raise for Dr Bendapudi and her staff?
The Board has set a meeting of the Human Resources and Compensation Committee for June 4th. To the best of my knowledge, this meeting will be held in Executive Session.
I am not a betting man, but if I had to put $10 down I would wager that increased funds will be provided for Dr Bendapudi’s higher-level administration team (although such measures do NOT require Board approval) and also lay the groundwork for yet another increase in compensation for Penn State’s ‘rock star’ president.
As a former Penn State alumni-elected trustee, I enjoy sharing my personal observations, concerns, and ideas about Penn State. I invite you to contact me with your opinions so that we can engage in meaningful conversations on those topics: barry@barryfenchak.com.
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