University of Michigan employees take salary freezes and lower pay increases this year

University of Michigan's top-paid executives and deans took the lead from President Mary Sue Coleman and accepted no merit pay increases in 2009-2010.

But not all took the freeze. The biggest increase among top earners went to U-M's chief investment officer, L. Erik Lundberg. HisÂ 18 percent salary hike, to $578,800, made him the 2nd largest earner at U-M with a base salary that tops Coleman's.

But Lundberg's earnings are tied to investment performance, rather than the university's merit program. While there was a negative 23 percent return on investment in fiscal year 2009, U-M's 10-year annual investment return through fiscal year 2009 was 9 percent, making it a top performer among all universities.

U-M hired Lundberg in 1999 to help set investment policy and oversee the endowment; last year, about $6 billion in investments generated $244 million in support of operating funds.

Ora Hirsch Pescovitz

Ora Hirsch Pescovitz, the executive vice president for medical affairs and CEO of the U-M Health System since May, makes the top university salary at $700,000. Her predecessor, Robert Kelch, made $648,047 base salary for the same position last year.

Faculty and staff took lower increases this year in light of the economic times, university officials said. The average faculty member accepted an increase of 2.3 percent, while staffers saw an average 0.7-percent raise.

Last year, the average pay hike for faculty was 4.4 percent, while staff members received an average 3.2 percent pay increase.

U-M released its annual salary list today; data on the list reflects 2009-2010 salaries.

Top 10 U-M base salaries 2009-2010

Name	Position	Base pay	Increase from last year
1. Ora H. Pescovitz	U-M Health System CEO/Exec. VP - medical affairs	$700,000	8%
2. L. Erik Lundberg	Chief investment officer	$578,800	18%
3. Mary Sue Coleman	University president	$553,500	0%
4. Douglas L. Strong	Director, CEO - U-M hospitals	$546,364	0%
5. James O. Woolliscroft	Dean, school of medicine	$494,400	0%
6. Timothy P. Slottow	Executive V.P. - finance	$472,106	0%
7. Robert J. Dolan	Dean, school of business	$435,102	0%
8. Evan H. Caminker	Dean, law school	$429,280	0%
9. David R. Morlock	Sr. Assoc. director, CFO - U-M Hospital	$400,000	0%
10. Peter J. Polverini	Dean, school of dentistry	$392,261	0%
*Pescovitz has held her position since May; the percentage increase was calculated using her predecessor's $648,047 base pay.

This salary report counts base salaries, but does not include other perks awarded to U-M's top executives.

Pescovitz, for example, has the ability to earn up to $150,000 annually if she meets certain performance goals. She'll be eligible for a merit increase to her base salary in 2010.Â

In addition, Pescovitz receives $100,000 a year in a retirement account that will be vested after five years and received a one-time lump sum of $150,000 for transition costs. The money for her salary package comes from health system resources, not the university's general fund, which is primarily funded by tuition and fees and the state appropriation. Pescovitz doesn't receive additional compensation for teaching at the U-M Medical School.

Coleman, who took a salary freeze at $553,500, is the third-highest paid employee at U-M and one of two women among U-M's 10 highest paid employees. Her salary package also includes $230,350 in other compensation, such as a retention bonus and retirement pay, and a house and car. She takes no pay for teaching in the Department of Chemistry.

University of Michigan head football coach Rich Rodriguez makes $300,000 base pay, but takes home at least $2.5 million a year in other contract perks, with bonuses between $50,000 and $300,000 available if the team makes a bowl game or wins the national championship. The U-M Athletics Department is a self-funded unit that doesn't take taxpayer dollars.

For a full list, visit: http://hr.umich.edu/hrris/reports/standard.html.