Harvard Endowment Pay Practices Come Under Fire by Alumni
Harvard University is paying top executives overseeing its $39 billion endowment too much.
(Bloomberg) -- Harvard University is paying top executives overseeing its $39 billion endowment too much even after they began overhauling operations and cutting jobs in a push to improve results, according to a group of alumni who are persistent critics of pay at the Ivy League school.
“The last two years’ data confirm that compensation still seems to lack a plausible relationship to performance,” the group of nine alumni, known as the Class of 1969 Ad Hoc Committee on Harvard’s Endowment Management, wrote on Wednesday in a letter to President Lawrence Bacow.
Representatives for Bacow’s office and Harvard Management didn’t immediately reply to requests for comment.
The alumni group seized on recent tax filings showing the five highest-paid executives at Harvard Management Co., which runs the endowment, collected the same compensation in 2017 as they did the year prior. The committee has denounced pay at the fund since 2003, when it was one of the top performers in higher education. The endowment’s 10% gain through June 2018 trailed most of its Ivy League peers.
While Harvard Management has said pay from 2017 is inflated by arcane accounting rules, filings this month show top executives made a combined $46.9 million, equal to the amount from 2016. Harvard Management’s total compensation tumbled by about half in fiscal 2018 after the organization cut roughly 100 jobs.
Pay in the latest tax filing was inflated because Internal Revenue Service rules required the endowment to include guaranteed future compensation for some new executives, according to Harvard Management. The top five executives actually collected a combined $35.3 million in 2017 -- not $46.9 million as indicated in the filing -- the endowment said on May 10.
Harvard hired Narv Narvekar as the endowment’s chief executive officer in 2016 to spearhead the overhaul, and he has changed compensation, tying bonuses to performance overall instead of by asset class. The school said he was paid $9.3 million in 2017, though with the inclusion of future guaranteed compensation the tax filing shows $13 million.
To contact the reporter on this story: Michael McDonald in Boston at mmcdonald10@bloomberg.net
To contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Josh Friedman
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