Men’s basketball head coach Mike Krzyzewski is used to being first. After a year-long hiatus, he has reclaimed the spot atop the list of the University’s highest-paid employees. Krzyzewski netted a total of approximately $1.5 million in salary and benefits—a 70.1 percent increase from his $875,000 income from Duke last year.
The University and Duke University Health System filed their Internal Revenue Service 990 tax forms in February, disclosing the financial details of both organizations for the 2003-04 fiscal year. The forms are required by the IRS of all non-profit organizations and include a list of the highest-paid executives and employees.
“This is the first year [Krzyzewski’s salary] was reflected in the budget based on the arrangements of his lifetime contract,” said John Burness, senior vice president for public affairs and government relations. Krzyzewski signed the lifetime contract with Duke in November 2001.
Last year’s highest earner—founder and former president of Duke University Management Company Eugene McDonald—was this year’s second-highest paid employee. He was paid approximately $1.2 million, despite the fact that he has not worked at the University for over three years.
Approximately $856,000 of McDonald’s salary this year came under the category “expense account and other allowances;” $269,388 of his earnings came directly from his salary.
Burness said McDonald’s high earnings were a result of contractual stipulations, even though he is no longer employed at the University. “He made the judgment that he wanted some payment deferred,” Burness explained.
Ralph Snyderman, chancellor emeritus of Duke University Health System, was the University’s third-highest earning employee, netting over $1 million. Snyderman’s total income from Duke reflected a 33.8 percent increase from the year before.
Huntington Willard, director of the Institute for Genome Sciences and Policy, and former President Nan Keohane rounded out the top five highest-paid employees at $680,731 and $558,399, respectively.
Despite Keohane’s high salary, the former president’s earnings would have been even higher if not for self-imposed salary caps.
“She was regarded as one of the top presidents in the country,” Burness said, explaining that there were times where the Board of Trustees “politely declined” to cap her salary. “In general, her salary was artificially lower relative to other leading [university] presidents.”
Burness said that despite the caps, he does not expect President Richard Brodhead’s salary to be as high as Keohane’s. Brodhead’s salary will be reported in next year’s Form 990s because he took over during the 2004-2005 fiscal year.
The highest-paid faculty members were two professors from the Fuqua School of Business: L. Palmer Fox Professor Robert Ashton and Professor of Strategy William Mitchell, who earned $410,685 and $408,370, respectively.
“If you look nationally—depending on the circumstances—you will frequently see business school professors among those who are highest paid,” Burness said, noting that the salaries must be competitive with those the professors might earn in the business world.
He also explained that the Board Compensation Committee considers a variety of factors when making salary decisions. Salaries are usually a function of reviewing each position’s merits combined with examining the market for and the nature of the position itself.
“It would be possible for someone not to necessarily be among the highest-paid individuals at Duke but to still be among some of the people who are highest paid in his or her field in the country,” Burness said.
DUHS’s highest-paid employee was Vice Chancellor and Chief Operating Officer of Health Affairs William Donelan, who earned approximately $654,000 last year.
The total assets of the University increased by 9.6 percent to nearly $6.2 billion; those of DUHS increased by 8.4 percent to $1.85 billion.
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