Salary increases consistently low

by Amy Zoss

The college’s fiscal 2002 tax return shows that raises for most of Simpson’s top paid faculty and administrators either fell short or barely outpaced the previous year’s inflation rate.

The four top-paid faculty at Simpson College earned an average 3.6 percent raise, while six of the top-paid administrators averaged a 2.7 percent raise. The Consumer Price Index – used to gauge the impact of inflation on the consumer dollar (and used by many bargaining agreements to determine cost of living increases for union members) – rose by 3.2 percent from June 2000 to June 2001.

The largest raise reported on the tax return was that of Kelley Bradder, vice president of information services and chief information cfficer. Bradder was promoted from assistant vice president to vice president, and as a result, her salary went up by 16.7 percent from $72,131 to $86,594.

Because of Bradder’s large gain, her pay raise was not used by The Simpsonian to calculate the average increase for top paid administrators. Neither was that of Vice President for Enrollment Deborah Tierney, who was promoted in 2001 and is new to the list this year.

Bradder’s promotion bumped her to the return’s compensation list for officers, leaving a spot open on the list of the five highest paid non-officers. New to the list of top paid non-officers on Simpson’s tax return is chemistry professor Cliff Meints.

According to President R. Kevin LaGree, the college didn’t meet budget goals in the fall of 2001, which curtailed additional salary increases for fiscal 2002.

Simpson notifies employees about salary increases in a two-stage process, according to LaGree. For example, LaGree signed letters one week ago that guaranteed a 2 percent increase for all employees still working at Simpson in the 2004 fiscal year. Once the college finalizes enrollment numbers this September, any additional raises will be based on “meeting budget goals,” said LaGree.

“For example, if there is a war with Iraq and the oil prices are so high that it cuts into our heating budget dramatically,” it would hurt the college’s ability to meet its budget goals, said LaGree. “We are so driven by tuition that it is scary to give even a 2 percent raise right now.”

For fiscal 2003 almost all Simpson faculty members got a 4.5 percent increase in salary, “which is pretty extraordinary given the [economy],” said LaGree.

President’s salary

LaGree earned $163,428 in salary during fiscal year 2002, a 1.3 percent increase since 2001. His total compensation, which includes salary, contributions to benefit plans and expenses, was $185,513.

LaGree is on annual contracts with the college, and a subcommittee of the executive committee on the board of trustees reviews his salary annually, according to Jerry Chicoine, a member of the executive board who does not sit on the review subcommittee.

Many college presidents work on three- to five-year contracts. “I’m quite happy at Simpson and would like to be here for some time to come,” LaGree said.

Trustees chairman, Robert Downing also chairs the review subcommittee. As a 25-year veteran of the board, Downing has been a part of the hiring process for several years.

“We have a committee that meets and evaluates him and it’s approved by the whole board,” said Downing. “The committee makes a recommendation to the whole board. The board is responsible for hiring the president.”

The board subcommittee reviews LaGree’s performance as part of the employment process. LaGree requested annual reviews when he was hired, and he said reviews are based on the subcommittee’s “conversations with students, faculty, each other and members of the community.”

“What I want is one [an annual review] that gets feedback from the constituencies that I serve,” said LaGree.

I think we [LaGree and I] thought it needed to be more structured, and Kevin agreed to that,’ Downing said. “In my opinion, it’s people that report to him evaluate him, and its done confidentially so people can be candid in their evaluations. It is meant to give advice and counsel in areas that need to improve, if there are areas that need to improve. It is a proactive evaluation, and it’s done by numerous people. It’s done by a combination of staff, faculty and students as well as trustees.”

An outside company will orchestrate future reviews to formalize the process and the reviews will be based on discussions with 45-50 people around campus. LaGree said the review process is an important part of his continued employment at Simpson.

“People get sideways with their boards and they get fired, so it is important to keep the channels of communication open,” said LaGree.

Robert Lester, who just joined the review subcommittee this year, said that the committee has been looking at company bids to do the review work.

“We’re going to continue to move more in the line of more active performance reviewing [for Simpson employees],” said Lester.

The national average total compensation at a four-year liberal arts college was $236,924 in the year 2000 for jobs similar to LaGree’s, according to a report from, an agency that monitors the finances of nonprofit organizations around the country.

LaGree’s total compensation for fiscal 2002 places him in the bottom quartile of the 2000 national statistics.

In the plains region, which includes Iowa, the average salary for educational institutions of greater than $5 million budget bracket was $144,978 in fiscal 2000. Simpson’s annual budget is $33 million.

Compensation information from Simpson’s five comparison schools lags behind Simpson by a year because of the vagaries of Internal Revenue Service filing deadlines and the schools’ fiscal years.

The highest paid college president in fiscal year 2001 within Simpson’s peer group was Cornell College’s Leslie Garner, who was paid $173,825 in salary. Presidents at Coe, Cornell, Luther and Wartburg all earned higher salaries in 2001 than LaGree earned in 2002. LaGree’s 2001 salary was $161,385.

LaGree would not specify the amount of his raise for fiscal 2003, but he said, “It is within the range of every other Simpson employee.”

Revenue at five-year low

For fiscal 2002, the reported revenue was at a five year low of $24,081,571, down nearly $4 million over reported revenue at the end of fiscal 1998. However, once an $11,359,129 investment loss is removed from the equation, revenue is nearly at par with fiscal 1998 levels. The investment loss comes from both real losses and losses on paper.

Some other changes in revenue, such as gifts to the college, may be reflected in those figures but are “trickier to factor out” according to Vice President of Business and Finance Ken Birkenholtz.

Operating revenue is a more telling figure. “Our operating revenues have been on a nice increase,” said Birkenholtz.

The weak stock market has caused trouble for colleges all over the country and Birkenholtz said the loss is still a concern to the college. The finance committee on the board of trustees met last week to look at the investment mix of the endowment, according to Birkenholtz. It discussed whether or not to make changes to the investment mix, a discussion that results in part from concerns over the losses in the past year.

“The finance committee actually reviews the operating budget, performance, and capital expenditures,” said committee member Chicoine. “The endowment falls in the purvey of the committee.”

The committee will take up the discussion again at their next meeting in April.

In the same time period, reported expenses have gone up from $28,160,526 at the end of fiscal 1998 to a new five-year high of $33,288,197. Adjusted for inflation using the Department of Labor’s CPI inflation calculator, the expenses in 1998 would have been $30,976,578 in 2002.

While inflation accounts for some of the increase, Birkenholtz said that financial aid is “the largest growing piece of the pie.” Financial aid awards in fiscal 2002 were reported at $8,898,202 compared to $7,732,199 in 1998. Using the same adjustment for inflation, the financial aid award in 1998 would have been worth $8,505,419 in 2002 dollars.

Tax return as public record

As a private not-for-profit organization, Simpson’s tax return must be made available by request. Called the Form 990, potential donors can use it to get a snapshot of the college’s financial health. The form includes such information as which contractors the college paid more than $50,000, how much money the bookstore made, and how much tuition was paid to the college.