Former Penn president Amy Gutmann earned nearly $23 million in 2021, but most of it was accrued over her 18 years as president

Amy Gutmann, the former president of the University of Pennsylvania, received nearly $23 million in total compensation in 2021, according to the most recent tax documents available.

It’s likely the highest annual total ever paid to a college president, but the vast majority of it — more than $20 million — was accrued over Gutmann’s nearly two-decade-long tenure as the Ivy League university’s leader and paid out as agreed when it vested, just months before she departed.

“That’s certainly a new record,” said James Finkelstein, professor emeritus of public policy at George Mason University, who has been studying university president contracts and compensation since the 1990s. “Certainly there is not a public university president in the country that has gotten anything close to that. For a private university president, it’s more than twice as much as the highest one I know of.”

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The total amount includes what’s known as deferred compensation, and if Gutmann, who was president for 18 years and left last year to become the U.S. ambassador to Germany, had not met the goals set or left early, she could have lost it. Many colleges offer deferred compensation packages as a way to retain high-quality leaders: They set aside money each year in a fund with an agreed-upon date on when that money can be withdrawn.

“The amounts credited to her annually under these agreements were in recognition of Dr. Gutmann’s outstanding service as Penn’s president, as well as for retention purposes,” the university said in its tax document.

Nevertheless, it’s an eye-popping number, but university officials said it reflects Gutmann’s “exceptional” and lengthy leadership of Penn, with its 12 schools, six hospitals, more than 23,000 full-time undergraduate and graduate students, and $13.5 billion operating budget.

“Amy was an extraordinary president for Penn,” said Scott Bok, who has chaired the board of trustees for nearly two years. “When you have a really extraordinary performer for a very long period of time, in a period of strong investment returns, yes, it adds up to quite a substantial number.”

While he said he couldn’t provide the exact amount, Bok said “a very significant amount” was due to investment gains.

Gutmann, 73, a political scientist who was appointed to Penn’s top post in 2004, has the distinction of being its longest-serving president. She raised more than $10 billion for the university, oversaw construction of many new buildings, prioritized student aid with a no-loan, all-grant policy, and led Penn, the city’s largest private employer, through a recession and pandemic.

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The university’s endowment more than quintupled from $4.1 billion, when she left her post as provost of Princeton to join Penn, to $20.5 billion last year. Major construction projects during her tenure include a nanotechnology center, the 24-acre Penn Park, the $35 million Pennovation complex, and a 1.5 million-square-foot patient pavilion at the Hospital of the University of Pennsylvania.

Gutmann’s total figure for 2021, reported on the 990 tax form, includes her annual compensation of a base salary of $1.56 million and a bonus of $1 million and the $20.2 million deferred compensation and supplemental retirement funds, which also includes investment gains the money made over 17 years. The university reported the amount of deferred compensation it gave Gutmann annually — and now again as a total — and disclosed the total during the Senate confirmation process for her ambassadorship, Bok said.

Her compensation was set by the trustees “using comparative market data,” Bok said, and with the help of a third-party compensation consultant.

Gutmann has routinely appeared near the top of the Chronicle of Higher Education’s annual list of highest-paid private college presidents. A year ago, she finished fifth, with a total compensation of $3.1 million, the Chronicle reported. That year, Paula S. Wallace, president of the Savannah College of Art and Design, topped the list at more than $5 million. Stephen K. Klasko, former CEO of Thomas Jefferson University, was second, at nearly $4.4 million.

Other college leaders have received multimillion-dollar, deferred-compensation payouts upon their departure. Ronald K. Machtley, former president of Bryant University in Rhode Island, received $5.4 million in deferred compensation, which accrued over more than 15 years, the Chronicle reported in 2020.

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Former New York University president John Sexton had accrued $7.8 million in deferred compensation, the Chronicle reported. Jack P. Varsalona, former president of Wilmington University in Delaware, had accumulated more than $4.62 million in deferred compensation. In 2014-15, that made him the highest-paid college president in the country, with total compensation of $5.5 million.

Some universities have gotten criticism for the large deferred compensation packages they have paid to their presidents at a time when adjunct faculty are scraping to make ends meet and tuition is climbing. Barbara E. Hopkins, a professor of economics at Wright State University in Ohio, said paying deferred compensation to university presidents reflects a shift that started a while back of treating universities like businesses and paying their CEOs as such.

But Hopkins, who served on an American Association of University Professors committee on compensation in higher education and teaches about inequalities, isn’t on board with the high amounts.

“What constitutes performance that is so amazing that it is worth $20 million over 18 years?” she asked.

Finkelstein, the George Mason professor, said often deferred compensation is rewarding presidents for time served rather than performance, which is problematic, though Bok said Gutmann’s money was clearly tied to performance.

There might be fewer presidents getting the benefit. Fewer college presidents — less than a third — reported having deferred compensation in their contracts in 2022, compared to 36.7% in 2016, according to a survey by the American Council on Education.

Bok said Liz Magill, who became Penn’s president nearly a year ago, doesn’t currently have deferred compensation in her contract.

“What happened with President Gutmann was really a unique situation,” he said. “A brand-new president is going to be treated differently than somebody who is there for a long time. Of course, if things work well, over time, you may add things like deferred compensation.”

George Birnbaum, a Connecticut-based lawyer who represents presidents in contract negotiations, said deferred compensation packages are beneficial to both the president and the college as a tool to hold on to a talented leader.

“The money is only paid at the end of the term,” he said. “That means if a person gets a better job offer half way through, they will think to themselves, what will I be giving up.”