Schools giving university presidents extra cash to pay their taxes

A new report in the Chronicle of Higher Education finds that out of the nation’s 50 highest paid university presidents, half of them received additional cash to cover taxes on bonuses and other benefits during fiscal year 2010.

The Chronicle’s study comprised of 493 private colleges and universities with annual operating budgets of $50 million or more. It did not break down what the average amount of money university president’s receive for taxes, as universities each deal with the situation in different ways. However the study did show that 36 university presidents received more than $1 million in compensation that year, with the average salary at roughly $400,000.

The practice of giving executives’ additional cash to cover their tax liability on benefits beyond their base salary is known as “grossing up,” and it has been used in both the corporate and non-profit world for years. Recently, however, Congress and the Internal Revenue Service have started to crack down on the practice, and in 2007 the IRS updated its Form 990 to require nonprofits, including private universities, to disclose all corporate perks and cash bonuses, including grossing-up payments.

Despite increased public awareness of the grossing-up payments, colleges have yet to cease providing them. The 2010 report found that among the presidents with the fifty-highest salaries in the country, three-fourths of them still received some form of gross-up payment from the school. Only one, Emory University in Georgia, has officially stopped providing payments to cover employee taxes.

Dean Zerbe, who helped investigate the practice while serving as an aid to Sen. Chuck Grassley (R-Iowa), commented that it is “hugely hypocritical to be out there beating the drum [for Obama], and meanwhile running as fast as they can to get contracts that make sure any taxes don’t affect them.”

Thus, it’s not very shocking to read that 81 percent of campaign contributions that higher-education employees made to presidential candidates went to President Obama, according to a June 2012 Chronicle article.

Ironically, the highest paid university president the year of the study was none other than The New School’s Bob Kerrey, the former Democratic Nebraska Governor and Senator who recently lost a bid to reclaim his U.S. Senate seat against Republican Senator-elect Deb Fischer.

Kerrey netted $3 million in 2010, his final year as president at the New York City-based school, with only a fifth of that coming from his base pay. The Chronicle found that in 2010 the New School paid Kerrey $1.2 million in bonus pay, $420K in nontaxable benefits, and nearly $700,000 in “other pay,” which included severance and retirement pay.

Rounding out the top five were Rensselaer Polytechnic Institute’s Shirley Ann Jackson, Birmingham-Southern College’s G. David Pollick, Washington University of St. Louis’ Mark Stephen Wrighton and Vanderbilt’s Nicholas S. Zeppos. Each of these individuals earned more than $2 million in total compensation in 2010.

(h/t The College Fix)

Comments

Jimmy Kimmel 'censors' Obama

Thanks to some mischievous editing from Jimmy Kimmel, these originally innocent TV clips will put your mind straight in the gutter.

Jon Stewart: Fox News is 'killing' him

As his days on the Daily Show wind down, Jon Stewart wants to make sure we are all aware how much he really, really hates Fox News.

Jay Carney is going to work for Amazon

Imagining an Amazon customer service call with Jay Carney on the line.

Ron Swanson, libertarian visionary

We're sad to say that "Parks and Rec" has aired its finale episode, leaving a Pawnee-shaped hole in our hearts.

Jon Stewart defends Bill O'Reilly

Bill O’Reilly, whom a Mother Jones report has accused of Brian-Williams-like war reporting exaggerations, has an unlikely defender: his long-time sparring partner, Jon Stewart.

White House

Calling for cooperation, Obama engages in confrontation

WASHINGTON (AP) — Amid appeals for bipartisanship, President Barack Obama in just three days has provoked Republicans on issues as disparate as immigration, Wall Street and the Keystone XL pipeline — a combative mix of defense and offense that underscores Washington's political realignment.

It’s on: Obama follows through and vetoes Keystone pipeline

Defying the Republican-run Congress, President Barack Obama rejected a bill Tuesday to approve construction of the Keystone XL oil pipeline, wielding his veto power for only the third time in his presidency.

Biden: The middle class is ‘being killed,’ in worse shape than any time since the ’20s

Joe Biden—everyone’s favorite creeper and truth-bomb-dropper.

MSNBC Host: Obama’s terrorism summit is a ‘dog and pony show’
You know it’s bad when President Obama has even lost the support of MSNBC. MSNBC Host Andrea Mitchell basically called the White House’s Summit on “Countering Violent Extremism” a farce during her show Wednesday. “Here he has the summit, no heads of government coming, the participation has not been at a particularly high level. We’ll have […]
Obama assures ‘almost complete confidence’ there have been no NSA abuses

The president’s interview with Re/code over the weekend touched on privacy issues, with Obama insisting with “almost complete confidence” that there have been no abuses of the government’s vast surveillance program.

Congress

Cruz: Obama, Carter similarities 'uncanny'
Sen. Ted Cruz (R-Texas) has his sights set on 2016, but he is not very optimistic about what will happen both at home and abroad in the mean time. Cruz laid out his predictions for the direction he believes President Obama is leading the country in during a round table event with reporters and bloggers […]
Cruz calls Lynch vote 'heartbreaking'
Loretta Lynch won approval from a key Senate committee Thursday to serve as the nation’s next attorney general, as divided Republicans clashed over her support for President Barack Obama’s immigration policies. The 12 to 8 vote in the Judiciary Committee sent Lynch’s nomination to the full Senate. Three Republicans joined all committee Democrats in voting “yes.” […]
It's Warren 2015, not '16

There seems to be a lot of talk about political "branding" lately. Allow Elizabeth Warren to take a crack at it.

Rand Paul calls Giuliani comments

Rand Paul pushed back on Rudy Giuliani’s controversial comments about Obama’s lack of patriotism, saying he prefers to question policy rather than motive.

House bills would legalize recreational marijuana
THE HILL — Marijuana would be legalized for recreational purposes and taxed like tobacco and alcohol undernew legislation in the House. The Regulate Marijuana Like Alcohol Act reintroduced Friday by Rep. Jared Polis (D-Colo.) would remove pot from a list of federally banned drugs. Meanwhile, the Marijuana Tax Revenue Act, a companion bill from Rep. […]