Light & Verity

Levin’s $8.5 million retirement benefit

A deferred bonus fuels debate about presidential pay.

Mark Ostow

Mark Ostow

Former president Rick Levin ’74PhD was rewarded for staying at Yale. View full image

The deal was struck 13 years ago, and the payment was made in 2013. But the requirements of federal tax reporting are such that the world first learned on May 20 that Yale had paid $8.5 million to Rick Levin ’74PhD in a lump-sum “additional retirement benefit” when Levin stepped down as president of Yale two years ago. The revelation immediately became fodder for an ongoing debate about pay for university presidents.

The payout, noted the Wall Street Journal, highlighted “the increasingly lucrative compensation for leaders at the nation’s top universities.” New York Times columnist Frank Bruni followed with a blistering opinion piece that likened Levin’s benefit to the lavish salaries of modern CEOs. “The lofty pay of college presidents is part of higher education’s increasingly corporate bent, of the blurred lines between the campus and the marketplace,” Bruni wrote.

Yale issued a statement defending and giving context for the payment: by 2002, the statement explained, the Yale Corporation (the university’s board of trustees) was impressed by Levin’s nine years of leadership and eager to explore ways to encourage Levin to stay at the university for as long as possible. In consultation with compensation experts, the Corporation devised the benefit, which would (and did) vest in January of 2013.

Yale’s statement enumerated Levin’s many achievements—among them 40 new buildings, 60 renovated buildings, Yale’s emergence as a global university, a quintupling of financial aid. The statement also quoted John Pepper Jr. ’60, the former Procter and Gamble CEO who was the Corporation’s senior fellow in 2003 (and later a vice president of the university), who called Levin “as talented a leader as I have seen in any walk of life.”

Expert observers differ on their opinions of the payment. “It is extraordinarily large, and strikes me as over the top,” says Richard Vedder, an economist whose books include Going Broke by Degree: Why College Costs Too Much. But Ron Ehrenberg, a Cornell professor studying the economics of higher education, has a more nuanced take: “My initial reaction was, ‘Wow, that’s a lot of money,’ and that’s still my reaction. But on the other hand, this was a really long-term deferred compensation agreement.” And very seldom does a president remain at a university for one decade, let alone two. Toward the end of his term, Levin’s base compensation fluctuated, but he was often reported among the highest-paid private university presidents. For 2011, for instance,* the Chronicle of Higher Education ranked Levin’s total compensation as tenth among his peers, at $1.65 million. (Robert J. Zimmer of the University of Chicago topped the list, at $3.35 million.)

But despite this context, critics like Vedder worry that universities lose “moral high ground” when large sums like these grab headlines. There was a time, he says, when “being a university president was like a calling, like being a minister or a priest,” adding that top public servants like US Supreme Court justices only make around $250,000 per year.

Pepper, though, compares Levin’s pay to the private sector, telling the Wall Street Journal: “He could have been in investment banking, he could have been in venture capital, he could have run a corporation. Obviously, if he’d gone into other fields, the compensation would be orders of magnitude greater.”


* This sentence has been corrected. Here and inour print edition, we originally referred to 2011 as Levin's “last full year as president.” But he did not step down until June 2012.


  • Martin E Cobern
    Martin E Cobern, 12:20pm July 30 2015 | Ico flag Flag as inappropriate

    He is worth every penny!

  • DS
    DS, 12:52pm July 30 2015 | Ico flag Flag as inappropriate

    2011 wasn't Levin's last full year as president. He announced he was stepping down in late August/early September 2012, and Salovey didn't take over until mid-summer 2013.

  • Joseph McCabe
    Joseph McCabe, 1:36pm July 30 2015 | Ico flag Flag as inappropriate

    Dr.Levin did an absolutely extraordinary job for 20 years.We got him cheap !!!

  • Mark Branch
    Mark Branch, 11:14am July 31 2015 | Ico flag Flag as inappropriate

    Thank you DS! We've corrected the article.

  • Michael Montesano '83
    Michael Montesano '83, 4:21am August 03 2015 | Ico flag Flag as inappropriate

    Now that the YAM has lost its financial independence from Yale and is overseen by a long-time Yale functionary (herself the recipient of a large "supplemental retirement benefit that raised eye-brows in the Elm City), it really needs to bend over backwards to demonstrate that it retains some semblance of editorial independence. This piece does not do the job.

    Rather than quoting outside experts, a media pundit and a Levin administration insider and rather than essentially repeating Woodbridge Hall's line on this scandal, the YAM could have actually reported the story.

    It could, for example, have gone to former President Levin for comment on how he viewed this payment. It could have solicited the comment of his successor, President Salovey. Their failure to speak about this matter has not gone unremarked, and that failure reflects badly on them, on their leadership (and endowments of guts/cowardice) and on Yale. If they really believe that there is nothing wrong with this payment, why are they so silent?

    Further, the YAM could have put this payment into perspective, in at least two ways. First, it could have compared this payment to Dr Levin with the total financial contributions to Yale made by the average Yale alumna or alumnus over the course of her or his post-Yale life. That comparison would suggest, I believe, that that average alumna or alumnus would really do best to channel her or his money elsewhere. For her or his donations are clearly chump change in the eyes of a Yale Corporation that can throw away eight million dollars so thoughtlessly. A second comparison might be with cuts made in various departments or other units of the University during the thirteen years in which Dr Levin "earned" these eight million dollars. With the reality of fungibility in mind, it would be most instructive to see which among Yale needs and goals were sacrificed in order to retain Dr Levin in Woodbridge Hall. These sorts of comparisons, rather than Mr Pepper's comparison with the compensation of--God help us--an "investment banker" would put this payment into a context that might help readers mull over their reactions to this news and come to informed conclusions of their own.

    A fundamental irony underlies this story. That irony concerns the fact that some at Yale and among Yale alumni would celebrate the achievements of the Levin years even as it becomes clearer that much about those years has remained secret or unappreciated. One wonders how historians of Yale and of American higher education will view those years as what all went on during them slowly comes to light and into sharper focus.

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