University of Minnesota regents approve more than $1 million contract with new President Rebecca Cunningham

Incoming University of Minnesota President Rebecca Cunningham will begin work this summer and earn more than $1 million per year after U regents on Friday unanimously approved her contract.

“I sometimes struggle with these very expensive employment agreements,” said Regent Robyn Gulley. But, she added, “I also feel like there was a lot of care taken for it to be right-sized in a lot of ways.”

Cunningham’s contract will put her total compensation in the top quarter for leaders of Big Ten universities, and some regents said they considered that range while negotiating.

Regents last month selected Cunningham, a medical doctor working as vice president for research and innovation at the University of Michigan, to serve as the next U president. The U president oversees a system that includes five campuses that together enroll more than 68,000 students and employ roughly 27,000 people.

The figures in Cunningham’s contract aren’t surprising, said James Finkelstein, a professor emeritus of public policy at George Mason University, who has researched compensation for university presidents across the country. “We’ve been seeing this increase in salaries creeping up,” he said.

He cautioned that it can be difficult to compare presidential contracts in a meaningful way, even within a single conference. Presidents tend to structure their contracts differently and their job responsibilities vary. While some university executives oversee an entire system, others are responsible for one location.

U presidential contracts have in the past sometimes elicited strong debate, with some regents saying they worried about paying large amounts to presidents while students struggled to afford tuition increases, and others arguing it was essential to provide competitive pay if they wanted the best leader. Regents on Friday overwhelmingly expressed support for Cunningham’s contract.

While negotiating Cunningham’s contract, U regents reviewed data from a national organization that compiles higher education human resources information and found that total cash compensation for Big Ten executives ranges from roughly $890,000 to $1.2 million.

Cunningham is set to earn more than $1 million per year, an amount similar to what the U expected to pay former President Joan Gabel before she left to take another job. Their contracts, though are structured differently.

Gabel had been on track to earn about $1.14 million this fiscal year, with about $749,000 of that being base pay and the remainder given in the forms of retirement contributions, performance bonuses and other allowances.

Cunningham’s contract calls for her to receive close to $1.1 million, with $975,000 of that being base pay and $120,000 coming in retirement contributions. The agreement also calls for housing allowances and moving expenses, the amounts of which aren’t specified.

It also includes raises in future years, based either on the increases provided to professional and administrative employees at the U or a 3.5% increase, whichever is greater.

Finkelstein and his research partner, Judith Wilde, said they are starting to see more schools structure their contracts this way. Since many schools frequently give presidents their entire bonuses anyway, “they just decided let’s skip that and we’ll just add that to the base and move on,” Finkelstein said.

Cunningham wasn’t at the meeting. In a statement Thursday, after the details of her contract were publicly released, she thanked the board for its support and said: “I can’t wait to continue getting to know more about the great people at the University of Minnesota, learning from Interim President [Jeff] Ettinger, and immersing myself in the U of M’s work later this spring.”