The amount of money distributed in bonuses to Ohio State employees in 2011 was almost $5 million more than what was generated from the university’s 2011-2012 academic year 3.5 percent tuition increase.
Seven OSU employees received bonuses of more than $1 million in 2011. The total amount of money used toward bonuses adds up to $25.6 million. Additionally, 25 employees were paid bonuses of $100,000 or more, according to OSU payroll records.
The 3.5 percent undergraduate-tuition increase raised in-state tuition from $3,140 in 2010 per quarter to $3,245 in 2011 and out-of-state tuition from $7,868 to $8,210 per quarter. With 43,525 Ohioans enrolled at OSU for the 2011-2012 academic year and 7,042 non-Ohioan, non-international students, the total number of additional dollars totaled about $20.8 million.
Five of these seven employees are Wexner Medical Center physicians and the remaining two are coach Thad Matta and former coach Jim Tressel from the Athletics department. Both the Medical Center and the Athletics Department are independently and separately funded from the university.
President E. Gordon Gee said he is proud that OSU gives out such bonuses and he does not apologize for them.
“I’m not sorry, I feel very strongly that everyone at this institution should be paid well and right and should be paid according to how well they perform,” Gee told The Lantern Monday. “We ought to take great pride in the fact that we have people performing at a very high level.”
However, Richard Vedder, professor of economics at Ohio University and director of the Center for College Affordability Productivity in Washington D.C., said he thought such bonuses are outrageous in the world of higher education and could have helped to avoid a tuition increase.
“Gee will claim that the bonuses were funded out of a different pot, but ultimately it is OSU,” Vedder said. “Moreover, some of the bonuses did not go to medical personnel.”
OSU distributed 4,028 bonuses in 2011, compared to its 1,693 in 2010. Its total payroll increased by 7.6 percent overall from $1.6 billion in 2010 to $1.8 billion in 2011.
Vedder said he has not heard of dishing out bonuses in the millions in higher education.
“I was really kind of blown away by all of this,” Vedder said. “The total payroll change really struck me.”
Jim Lynch, university spokesman, provided The Lantern with the budget of the Athletics department. The department produced $131.8 million in revenue for 2011 and had expenses totaling $122.3 million.
Of its expenses, $16.5 million of that was attributed to “total coaching salaries, benefits and bonuses paid by the university and related entities.” Matta, OSU’s men’s basketball coach and the universities top paid employee, made $2.2 million of that $16.5 million in 2011. Jim Tressel, former football coach, made $1.8 million in 2011. Together, the two made up 25 percent of the total coaching budget in 2011.
In comparison, University of Florida men’s basketball coach, Billy Donovan, made a base salary of $205,000 for 2011. Matta’s base salary was $563,508.
According to Donovan’s contract, if his team were to win the SEC Championship and advance to different levels of the NCAA tournament, he would receive various bonuses ranging from $25,000 up to $150,000 for winning a National Championship – which he has done twice.
In 2011, Matta lead his team to the Sweet Sixteen, won the Big Ten Tournament and Big Ten Championship. He received a $1.1 million bonus.
Lynch said the Medical Center employees are paid for patient care and procedures on a quarterly basis and those are processed as payments under bonus codes.
“In regards to the bonuses for our Medical Center physicians, last year we integrated the OSU Physicians group into the university so payments that had previously been administered through the physicians group now go through the university,” Lynch said.
All five of the Medical Center employees who grossed bonuses upwards of $1 million, Steven Kalbfleish, John Hummel, Emile Daoud, Ralph Augostini and Raul Weiss, declined to comment on their bonuses.
Additionally, David Crawford, a spokesman for the Medical Center, did not return The Lantern’s requests for comment.
The Board of Trustees had to approve the nearly $26 million in bonuses, Lynch said.
“Bonuses are largely contractual,” he said. “The Board of Trustees does have to approve the bonuses made in accordance with the OSU Reward and Recognition policy.”
The Ohio Board of Regents did not respond to The Lantern’s emails to comment on the bonuses.
In comparison to OSU’s 13 employees who made more than $1 million in 2011, according to payroll data from the University of Texas, three of their employees broke $1 million. At OSU, there were 238 employees who made more than $300,000 in 2011, while at UT, there were 34.
Vedder said other institutions do not have payrolls as large as OSU.
“I just am interested to see how students feel about paying extra for tuition and seeing these additional payments being given out,” Vedder said.
Bruce Weinberg, an OSU economics professor, said there has been a shift toward linking compensation to performance, like these bonuses.
“That’s something that is sort of a trend that’s happened in industry over the past years,” Weinberg said. “Now there are discussions in industry as to whether that has gone too far.”
Weinberg said he is unsure as to whether that pendulum had swung too far at OSU.
“That’s a hard question,” Weinberg said. “Because you’re looking at the provosts and the presidents and important figures here that make the university function and asking if you could get someone cheaper for their value, and you can’t really answer that.”
Gee said this trend is what the university has taken on as part of the American system.
“As you know, I’m a very highly paid university president, much of my salary is at risk, which I like,” he said. “This is the American system, if you do well, then you’re paid for doing well.”