Issue date: 9/25/09 Section: News

Former President Robert G. Bottoms

Media Credit: Matt Welch A visual representation of the money former President Robert G. Bottoms has made and will make in retirement.

Former President Robert Bottoms earned $1.2 million when he retired in 2008. He will also receive yearly payments over the next two decades totaling roughly $1.1 million, according to 990 forms filed with the Internal Revenue Service.

That money accumulated over his entire 22-year career in an incentive-based retirement plan designed by the board of trustees.

When the board of trustees created the contract in 1988, it had no idea how long Bottoms would stay. To encourage a lengthy career, the board of trustees' four-member executive compensation committee crafted something called a deferred compensation plan.

Bottoms was 42 at the time, and retirement was far from his mind.

"I didn't even know what deferred compensation was at that point," Bottoms said.

Bottoms, currently the director of the Janet Prindle Institute for Ethics, said he never left DePauw because the work was constantly rewarding. Even when a more lucrative offer came from another university, Bottoms rejected it to finish construction of the Richard E. Peeler Art Center.

Financial incentives were not his primary consideration, he said.

"I always felt like we had important things to do here," Bottoms said. "I loved it here or I wouldn't have stayed for 30 years, 22 as president."

According to the terms of his contract, a small but steadily increasing percentage of Bottoms' salary was placed in a fund every year to accumulate and earn interest. Bottoms had to stay in his position for 10 years, or the money would return to the university.

Contributions started at $10,550 in 1988 and reached $76,832 by 2007, according to the university's 990 form. Eventually contributions and interest combined to a total of $1,489,316 by June 30, 2007.

Bottoms was paid $735,360 of that sum in 2008. The remaining $753,956 was used to open an annuity, which will be distributed to Bottoms in $56,000 yearly payments until January 2029, totaling $1.1 million.

The first payment in July 2008 was part of Bottoms' $1.2 million paycheck, Bottoms confirmed.

Since Bottoms first signed his contract as president, deferred compensation plans have become commonplace, according to a 2006 article in the Chronicle of Higher Education.

During his tenure, Bottoms' salary steadily increased. According to the Chronicle's annual compensation survey, Bottoms' salary was $164,262 in 1996 and rose to $338,911 in 2006, following a nationwide trend of rising presidential salaries. The median salary for a president of a single baccalaureate institution has grown from $139,121 in 1999 to $225,000 in 2008.

To determine Bottoms' and other administrators' salaries, Bottoms said the board of trustees aimed for the top quartile of the Great Lakes College Association (GLCA). The GLCA is a network of 12 private liberal arts colleges including DePauw. Bottoms said his salary was never the highest in the GLCA.

As the Prindle Institute Director, Bottoms still earns a regular salary, which he said is "significantly, significantly less" than he made as president.

John Morrill, professor emeritus of mathematics, said Bottoms was not overpaid in the context of a 22-year career at a top-50 ranked liberal arts college.

"He has not been highly paid," Morrill said. "He has been adequately paid."

Philosophy professor Marcia McKelligan said she wasn't shocked by Bottoms' retirement package.

"It's a lot of money," said McKelligan, who has taught philosophy for 34 years and has recently focused on business ethics. "Some people say 'Wow, that's so much more than I make.' I don't think it's too out of line."

Nationally, public scrutiny of executive pay has intensified in recent years as the disparity between top executives and workers has skyrocketed. Some college presidents returned portions of their salaries when their schools lost money in the faltering national economy, according to a story published in The New York Times in 2008.

McKelligan said that is not a reasonable expectation in Bottoms' case, even as financial pressures compelled DePauw to freeze faculty and staff salaries last year.

"Everyone is making a lot relative to someone else," McKelligan said. "I'm not giving back any of my salary."

In 2008 President Brian Casey moved into the university-owned president's house, The Elms, and took over for Bottoms. The board of trustees negotiated a new contract under chairman David Hoover's direction, incorporating a similar retirement plan.

"There are incentives to keep me here based on length of service," Casey said.

Casey's base salary is lower than Bottoms' final salary, Hoover said, since Casey is a first-time president. But Hoover maintained the combination of base salary, variable incentives and deferred compensation is important.

The board's current contract with Casey is set up to reward good work, Hoover said, and can withhold incentives if Casey's performance falters. Hoover praised Casey's response to a difficult year and is optimistic his successes will continue.

Casey embraces the challenge.

"I am profoundly happy in this position and deeply honored to hold it," Casey said. "I have no deferred emotional incentives."



- Matt Welch contributed to this story.

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