Total compensation for WSU’s new president to reach $1.2 million, contract shows

WSU’s new president will earn nearly $1.2 million in total compensation, his contract shows
If he completes his 4.3-year contract, he will earn a bonus, pushing his total compensation to nearly $1.3 million
The package is not ‘extraordinary’ among presidents serving similar public universities but ’richer’ than the contract awarded to the previous president

Wayne State University will pay newly appointed President Richard Bierschbach a $795,000 base salary, but additional compensation built into his employment contract will boost his total yearly earnings to approximately $1.2 million, according to an expert.

Bierschbach’s employment contract, released Wednesday, includes compensation beyond the base pay, according to George Mason University professor emeritus James Finkelstein:

A target performance bonus of $75,000
A carryover interim bonus of $25,000
Retirement compensation of $104,500
Deferred compensation of $125,000
A car allowance of $9,000
An allowance for spousal travel of up to $20,000.

It also includes a $400,000 bonus if he serves 4.3 years through June 2030, the end of his contract. If Bierschbach completes his tenure, that bonus breaks down to approximately $95,000 annually, meaning his earnings could reach up to $1.3 million annually, said Finkelstein, who studies presidential contracts and analyzed Bierschbach’s contract at the request of Bridge Michigan.

Base salary for a university president is not as meaningful as total compensation because universities boards find ways to “hide” compensation throughout an employment contract, said Finkelstein.

Related:

vertical shot of a man standing in front of a window with arms crossed — Richard Bierschbach was named Wayne State’s 14th president after serving as interim chief since September and dean of the WSU law school for eight years. (Courtesy of Wayne State University)

Even so, Bierschbach’s total compensation package does not stand out amid other presidents serving similar public universities across the nation, said Finkelstein.

“In today’s world, where we are seeing presidential contracts for flagship universities routinely ranging from $2-3 million, for an institution like Wayne State, it’s nothing extraordinary,” said Finkelstein. “A million dollar (compensation package) is starting to become increasingly common among R1 (high research) universities that have substantial enrollments.”

Heads start to turn when public universities compensate presidents with $2-3 million, Finkelstein said, like University of Michigan recently did in an employment contract with President-elect Kent Syverud.

The current total compensation package of MSU President Kevin Guskiewicz was not immediately known. But a university spokesperson said his base salary as of October was $1,029,210.

“It’s fair for the university and for him,” Sunny Reddy, a member of the WSU board, said of Bierschbach’s compensation.

The WSU Board of Governors this week appointed Bierschbach as the university’s 14th president after he had served for eight years as dean of the WSU law school and stepped up last September to serve as interim president following the resignation of former President Kimberly Andrews Espy.

In an unusual move, the board hired Bierschbach without interviewing any candidates, when experts say that 92% of public and private universities hire a firm to conduct a national search. WSU officials said they were trying to save university resources and listening sessions revealed that the WSU community was seeking traits in a president that matched those of Bierschbach.

As dean of the law school, Bierschbach earned $569,000; his pay increased to $769,000 as interim president, according to WSU spokesperson Matt Lockwood.

In comparison to the original contract of Espy, WSU’s first female president, Bierschbach’s contract “is meaningfully richer across nearly every major compensation dimension,” Finkelstein said.

His base salary is approximately $105,000 higher than Espy’s; his target bonus is nearly double ($75,000 vs. $40,000), and it starts immediately rather than in a second contract year.

His deferred compensation is $36,500 higher than Espy’s and then escalates automatically with salary increases — a structural advantage that grows over time. Espy did not have a completion bonus.

“Those differences are not trivial,” Finkelstein said. “They materially raise the overall compensation profile.

Several things stood out in Bierschbach’s contract, Finkelstein said.

Among the most unusual, he said, is a summer salary enhancement embedded in his contract as dean.

“The contract amends his law faculty appointment to increase his post-presidential summer stipend from 20% to 30% of his nine-month faculty salary,” said Finkelstein. “For a law professor at his salary level, that effectively converts him from a nine-month to a twelve-month employee after the presidency ends — a benefit that has nothing to do substantively with the presidency itself. That is not something you typically see in public university presidential contracts”

Also unusual are terms outlining dismissal for cause and his tenure.

He automatically loses his tenure rights only under one of the six grounds for cause.

“If he is fired for any of the other five reasons, the university would be required to follow the separate process outlined in Board of Governors Code Section 2.51.01 to terminate his tenure rights,” said Finkelstein. “Increasingly, we are seeing contracts that terminate tenure rights for any termination for cause.”

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