Michael Vondriska: Judith Rodin-Penn's $700,000 bargain

For the CEO of a a multi-billion-dollar corporation, Judith Rodin doesn't do so well.

The 1967 College for Women graduate -- and the Ivy League's first female president -- leads a nationally ranked academic institution, manages an often-troubled health system and conducts her daily routine under the close watch of students, academics and members of the press.

But she only gets paid $716,325.

That's how much Rodin took home in salary, employee benefits and reimbursed expenses -- combined -- during the 1999-2000 fiscal year.

And it's at least a few million too little for a woman who is expected to be on call seven days a week for the entire academic school year.

In recent years, there has been much discussion over the salary levels of top higher education officials. Some point out that, like college tuitions, the benefit packages of administrators have skyrocketed. Faculty members are concerned about the growing disparity between themselves and their former peers, removed from laboratories and lecture halls and now placed in cozy offices of administration buildings. Students are astonished that their tuition dollars seem to be paying for a lifestyle of luxury for individuals they may only see at commencement.

During her seven years at Penn, Rodin has overseen an explosive campus building campaign -- financed by donation dollars that, mind you, she brought in.

She has completed the five-year Agenda for Excellence program, which initiated changes on campus such as the formation of the Center for Undergraduate Research and Fellowships and many of Penn's international initiatives.

At the same time, Rodin moved the University up the national rankings to its current top-five spot in the controversial U.S. News and World Report list.

If this was corporate America, Rodin would have celebrated those accomplishments with a nice big bonus check in her hands.

Instead, she received an $1,800 salary raise last year -- despite all the accomplishments over what was a busy term.

Even considering this year's comparatively smaller raise, many believe that Rodin still received too much. In justifying her increasing pay during her tenure at Penn, the University Trustees point to competition in both university and business circles.

Hired compensation consultants, in fact, have recently highlighted the increasing similarity between industry and academia pay scales. To quiet the critics of raises, compensation is tied more and more to specific performance evaluation.

For the most part, these statements make most university constituents, including critics, comfortable with higher presidential salaries. But while this model has justified the steady increase in Rodin's pay, however, it still cannot even begin to explain why Penn's president makes far less than what her going value would be on the open market.

Consider, for example, Barnes and Noble, a publicly-held bookseller that operates on Penn's own campus. Total sales for the chain totaled $3.4 billion in 1999, more than the University's $2.5 billion total revenues, but still within the same ballpark.

According to Executive PayWatch, a watchdog for bloated corporate payrolls, Barnes and Noble CEO Leonard Riggio swallowed $800,000 in total compensation last year, not including $18,174,752 in unexcercised stock options from previous years.

Riggio's $800,000 isn't far off from Rodin's $716,325. So the compensation consultants must be right on?

Wrong.

Take Applebee's, an international restaurant chain that takes in significantly less operating revenues than the University, only $690 million. CEO Lloyd Hill cashed a paycheck of $2,842,768 last year. So much for parity with corporate America.

There is only a small chance -- a very small chance -- that Rodin will leave Penn to become the next leader of Applebee's. But the chance of her departure to a high-profile government position or private sector job, on the other hand, is actually rather high.

Seven years into her term, Rodin is now one of the longest-running Ivy presidents. And her national reputation and contacts in every sector have already opened questions about where she will go next.

Maybe she'll end up at an enterprise where she'll be able to hold her own, like Universal Health Systems. Considering her experience leading the University's own health system, UHS, one of the nation's largest hospital companies, might be a hypothetical future fit.

In 2001, that corporation netted $2.2 billion in revenues, and CEO Alan Miller played golf on his $5,194,873 in total compensation.

Think about that: Miller made $5 million -- compared to Rodin's $700,000 -- while bringing in fewer revenues and steering clear of the political and social hassles that come along with being an academic leader.

If I were Rodin, I'd probably ask, "Where's my extra $4.5 million?"

And if I were a University Trustee, I'd probably be thrilled that Penn's top administrator comes at such a bargain.

Michael Vondriska is a senior Accounting concentrator from St. Louis, Mo., and executive editor of The Daily Pennsylvanian.

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