Pitt Chancellor Patrick Gallagher will receive a $500,000 bonus in 2019, described by Pitt as a retention incentive, as well as a 2.25 percent salary increase. Graphic by Jon Moss | Online Visual Editor

The University’s Board of Trustees granted Chancellor Patrick Gallagher — along with the senior vice chancellors of most schools at Pitt — a 2.25 percentage salary increase during a December 2018 conference call. Gallagher will also receive an additional $500,000 in August as a part of a five-year retention incentive agreed upon during his initial hiring in February 2014. This additional compensation is comprised of $100,000 deferred from his salary each year since 2014 as an incentive for the chancellor to retain his position until 2019.

The combination of the 2.25 percent increase in the chancellor’s salary — to a base salary of $550,000 — and the payout from his retention agreement will result in a salary of more than $1,000,000 for Chancellor Gallagher during the 2019 fiscal year. The chancellor’s first raise after his hiring in 2014 was granted in a December 2017 Board of Trustees meeting to be received in the 2018 fiscal year.

According to Bethany Miga, director of executive communications for the Office of the Chancellor, the additional $500,000 the chancellor will receive in August is best described as a retention incentive rather than a bonus.

“There is no good word for this, but it is not [a performance bonus],” Miga said. “He came in at a certain level and as part of that day-one agreement they were going to step him up. This is a one-time thing.”

According to Miga, it is not clear if previous University of Pittsburgh chancellors have received similar retention incentives in the past, but the University says this agreement will not be replicated if Chancellor Gallagher remains in his position for another five years.

The chancellor is not the University’s highest paid executive. Arthur Levine — Pitt’s health sciences and medical school dean — will receive a 2019 base salary of $891,667. Mark Nordenberg, former chancellor of the University and current chair of the University’s Institute of Politics, received a base salary of $814,255 in 2016. Both Levine and Nordenberg have worked for the University for more than 20 years.

“Dean Levine [and Mark Nordenberg] have been here for a very long time,” Miga said. “[Their salaries are] due to experience and length in position.”

According to The Chronicle of Higher Education, Chancellor Gallagher’s University-related compensation of $536,520 for the 2015-16 academic year ranked 85th out of 253 chief executives’ salaries at public universities in the United States.

The chancellor’s 2019 base salary of $550,000 in addition to the $500,000 payout for his five-year retention incentive this year, results in a total compensation of approximately $1,050,000. According to The Chronicle of Higher Education, Penn State President Eric Barron was the 11th highest-paid executive official at a public university during the 2016-17 academic year with a total compensation of $1,038,170.

In the public Association of American of Universities report for the 2016-17 academic year, the salaries of Pitt’s main campus professors and associate professors ranked 18 and 19, respectively, out of the 34 institutions examined.

The chancellor’s salary fell around the upper third of the salaries of other public university presidents and chancellors, while professors and associate professors ranked slightly below the 50th percentile. Assistant professors, instructors and lecturers at Pitt ranked in the lowest 15 percent in AAU’s data.

Pitt’s assistant professors ranked 29 out of 34. Out of the 21 institutions that had instructors and the 29 institutions which had lecturers, Pitt ranked 19 and 28, respectively.

The executive compensation policy, which gave top university officials a 2.25 percent raise for the 2019 fiscal year, applies to the chancellor and the senior vice chancellors, but not to Provost Ann Cudd, who began work in her current position during the fall 2018 semester.

University Controller Thurman Wingrove said the 2.25 percent salary raise pool approved in the University’s Fiscal Year 2019 Operating Budget varies from year to year. Raises are based on performance, adjustment in equity for employees who have worked for the University for a longer time and market adjustments that account for cost of living.

“The 1.5 [percent raise] is for satisfactory performance. That’s more or less guaranteed if you’re performing satisfactorily. The other 0.75 is available at the school level or the administrative department level to distribute to employees based on merit, market and equity needs,” Wingrove said. “You have certain star performers, really strong performers that you want to be able to retain and reward.”

Director of Media Relations Joe Miksch said the University decides the raises for executive employees through a multi-step process involving equity, market and merit-based evaluations.

“There was a company that did evaluations of peer AAU institutions and similar positions to kind of see where our folks were competitively within that cohort of schools that are similar to ours,” Miksch said. “The chancellor evaluates his team of senior vice chancellors and the Board acts on his recommendation for their salaries and their level of increase.”

According to Miksch, raises and bonuses for University professors and administrative staff are determined separately. In any given year, the percentage of raises given to executive employees is not permitted to exceed the percentage received by the rest of the University’s faculty.

“Increase pool for faculty was 3 percent when the most recent salary adjustments were made. This is higher than the pool for staff because of an academic initiative intended to aid in faculty retention and address competition in the academic market,” Miksch said.

University officials said the chancellor’s increase in pay was comparable to salaries of chief executives at other public universities.

“You need to attract people to leadership positions. You need to have the school in good hands,” Miksch said. “You have to pay them. They’re in line with their peers at peer institutions.”