Northeastern president tops pay list

Deferred benefits led to $2.9m year

Northeastern University president Richard Freeland stepped down in 2006.

The $2.3 million exit package Richard Freeland received upon stepping down as president of Northeastern University last year earned him the distinction of apparently being the country's highest-paid private college president. But several specialists on college presidents' contracts and compensation said yesterday that the top ranking was misleading because it reflected a decade of deferred benefits paid out in a lump sum.

"It looks like a bonanza, but it's something that has been negotiated and earned over the years," said Sheldon Steinbach, a higher-education lawyer and former general counsel for the American Council on Education. "It's not a parting gift."

Freeland landed atop The Chronicle Of Higher Education's latest survey of the earnings of private college presidents, with nearly $2.9 million in compensation in 2006, when he stepped down after 10 years as president. He was among a dozen presidents of private universities who earned more than $1 million in salary and benefits, the Chronicle reported, many of them because they received large retirement bonuses or deferred compensation.

In 2006, Freeland received a $514,500 annual salary and a $107,295 expense account, according to the Chronicle survey, which was released yesterday. The survey found that in 2006, 81 presidents of private colleges earned $500,000 or more, compared with just three a decade ago.

Northeastern's board of trustees said Freeland's compensation package recognized his "decade of extraordinary service and achievements."

Northeastern now accepts less than half of its applicants, compared with 85 percent in 1995. In that time frame, the average SAT score of entering freshmen has climbed more than 200 points, to 1,224, and the school has risen steadily in the US News & World Report rankings to 96th.

Higher-education lawyers speculated that Northeastern included the deferred payments as an incentive to retain Freeland as president.

"It's part of the platinum handcuff," Steinbach said, using a term common in corporate culture for agreements involving lucrative pensions. "It was likely negotiated early on and would be forfeited if he left early."

Freeland's decision to relinquish a tenured faculty position in the university's history department, among other things, sweetened the terms of the retirement package, said Justine Griffin, a spokeswoman for Northeastern.

Steinbach said that Freeland and Northeastern probably negotiated the pension payments well before Freeland announced he was leaving. He said Freeland could lose the retirement benefits if he violated provisions that are sometimes included in presidential contracts, such as a no-compete clause.

Freeland has been mentioned as a potential candidate for the chancellorship at the University of Massachusetts at Amherst.

Raymond Cotton, a higher-education lawyer in Washington, D.C., who specializes in college presidents' compensation, said the $2.3 million exit package was "very modest" compared with Freeland's yearly salary.