Recently released tax forms show Bob Kerrey received $3 million in compensation from The New School in 2010, the year he resigned as president of the liberal arts school after a tumultuous decade at the helm.
The form 990 — which the IRS requires annually — shows Kerrey received $603,000 in base pay, a $1.2 million retention bonus, a $692,000 payout from his retirement plan, $134,000 in deferred compensation and $420,000 in nontaxable benefits.
Kerrey contacted Nebraska Watchdog to note that $603,000 of that was his base pay as president of the school that year and the $420,000 is primarily the annual rental value of the university-owned West Village brownstone he lived in, plus utilities and upkeep.
Of the remaining $2 million, $1.2 million was a bonus he received for staying on with the school through the end of 2010 — even though he was recruited by the Motion Picture Association of America. An outside consultant said that’s how much Kerrey had been underpaid — compared to the market — in prior years, Kerrey said. Politico also reported the $3 million compensation figure.
There’s no doubt Kerrey was well-compensated for his work overseeing the progressive university in downtown Manhattan. The university paid Kerrey $1.3 million in 2009 – making him the fourth highest paid private college president in the state of New York and 21st highest paid in the nation that year, according to the Chronicle of Higher Education.
Kerrey’s pay package has been the subject of controversy on the campus in the heart of Greenwich Village. Kerrey’s successor, David Van Zandt, has been under fire to be more transparent about the school’s finances, including the amount of money being paid to Kerrey and other administrators, according to the New School Free Press. The student newspaper reported that last month Van Zandt declined to disclose how much Kerrey was being paid, and has noted that Kerrey made nearly as much as the president of New York University, even though that school has five times as many students, 10 times as much revenue and 12 times as big an endowment.
Kerrey’s campaign manager, Paul Johnson, dismissed the school newspaper report, saying, “The students never really cared for Bob.”
The newspaper noted that while many universities cut back on administrators’ pay after the Great Recession hit in 2008, The New School went against the trend, with Kerrey’s base pay increasing from $340,000 in 2000 to nearly $688,000 in 2009.
Sam Biederman, a spokesman for The New School, said part of the reason Kerrey’s total pay package seems high is that it includes the cost of his housing in a university-owned home on the west side of Greenwich Village. He said it also serves as an entertaining space.
Biederman defended Kerrey’s $3 million compensation, saying Kerrey led the university through enormous growth – increasing the student body 50 percent, doubling the full-time faculty and increasing fundraising.
“This is not out of the ordinary at a university,” Biederman said. “This sort of package is not uncommon out here.”
Kerrey spearheaded an expansion of the campus with a $352 million, 375,000-square foot building called University Center that will house classrooms, dorms, an auditorium and a library. It’s the largest building project the school has ever undertaken.
“President Kerrey did lead a transformation of this university,” Biederman said.
However, Kerrey’s decade at The New School was hardly smooth: Although he is credited with rebranding and renovating the school, the faculty handed him a no-confidence vote in 2008, students organized sit-ins and called for his removal as he churned through six provosts and the student newspaper knocked him for being tone deaf and far non-transparent. In 2009, 22 students were arrested at a sit-in after Kerrey called in the police.
While Kerrey can continue to collect $400,000 to $600,000 per year in salary and benefits for serving as president emeritus through 2016, the school is battling a budget gap. Enrollment did not grow as expected, leading to a $9 million shortfall in its $330 million budget. The university plans raise tuition rates 2 percent and Van Zandt said in a message to the community that $2.5 million in savings was found by reorganizing the president and provost’s offices. The student newspaper speculated that those savings were found simply by releasing Kerrey and his executive vice president.
Some lay part of the blame for the budget shortfall on Kerrey for putting the school on an unsustainable course. Van Zandt recently said the university will stop relying on rapid enrollment and tuition increases to sustain its budget. In addition, he and his provost took a 5 percent cut to their base pay.
Van Zandt told the student newspaper that after taking over the reins, he quickly saw that the school’s growth projections were unrealistic and began focusing on quality rather than quantity.
Johnson acknowledged Kerrey ruffled some feathers while president but noted that the school’s board of trustees asked him to stay on.
“The school was in great financial shape when Bob left it,” Johnson said. “He ran the place like a business. And yeah, some of the faculty didn’t like the changes that were made. But that’s to be expected in a university setting.”
He said the new president decided to scale back enrollment, which affected the school’s income.
Kerrey said he’s proud of what he accomplished at The New School and although the university is facing “a little trouble financially” today, he said, “We had no financial difficulties through my entire term. None.”
Biederman said Kerrey’s $3 million in 2010 compensation reflects the growth during his decade as president, but he said now the school is facing the same challenges as many other colleges and universities.
“This is a different time,” he said. “We are impacted by the uncertain economy. But The New School remains in very solid financial condition, thanks in large part to President Kerrey’s vision for the university.”
According to the New York Times, Kerrey’s detractors accused him of centralizing power, shutting out faculty and being “autocratic, impulsive and even erratic.”
Kerrey is running for his old U.S. Senate seat representing Nebraska. His Republican opponent, Deb Fischer, is a state senator. Her campaign manager said Kerrey’s $3 million payout is telling.
“This revelation tells Nebraskans all they need to know about this race,” Aaron Trost said. “While Senator Fischer was busy serving Nebraska by passing the largest tax cut in state history, cutting spending and balancing state budgets, Bob Kerrey was making millions in New York City.”
Reported by Deena Winter, firstname.lastname@example.org.
Editor’s note: to subscribe free of charge to News Updates from Nebraska Watchdog click here.