Purdue trustees to extend Mitch Daniels’ contract

Purdue University’s Board of Trustees will decide Friday whether President Mitch Daniels should receive nearly all of his at-risk pay for the 2014-15 school year.

The compensation committee voted Thursday to award 90 percent of Daniels’ $126,000 at-risk pay and extend his contract for two additional years — to June 30, 2020.

Trustees decided to extend Daniels’ contract so he could see projects, including the State Street redevelopment and Purdue Moves, to fruition.

The contract awaits a vote Friday by the Board of Trustees, which also will decide whether Daniels receives $113,400 of at-risk pay for 2014-15, bringing his total compensation to $533,400. As part of the contract extension, Daniels could receive a “retention incentive” of $100,000 in 2016, with an additional $50,000 every year until 2020.

“We’ve got a lot to do yet, and so we thought it best, in order to have continuity, that we would retain Mitch for two more years to complete some of the major things we’ve started,” said Chairman Mike Berghoff.

Under the amended contract, Daniels’ at-risk pay would increase from 30 percent of his base salary to 50 percent, or $210,000. Next year, Daniels could earn up to $630,000.

For the 2013-14 school year, Daniels received 88 percent — or $110,880 — of at-risk pay.

“We’re serious about this pay for performance business, and I think it’s fair to say that Purdue had a really good year,” Daniels said. “And if that year only works out to 90 percent, I think that shows that we’ve got the bar set really high, and that’s exactly what we want.”

Trustees evaluated Daniels based on metrics in four categories: student affordability, student success, fundraising, and institutional reputation and excellence.

According to the committee’s evaluation, Daniels fell short in several areas, including retention and graduation rates for underrepresented minorities and research productivity. According to meeting documents, about 38 percent of minority students at Purdue graduate in four years. The board’s goal is 41 percent.

But Daniels exceeded goals for fundraising, bringing in $343 million during the past fiscal year, and for average debt of graduates, which has dropped to $4,326. Total debt among undergraduate and graduate students has dipped $50 million since 2011-12.

“I’d never expect that portion of his pay to be easy to get all of it,” Berghoff said. “In fact, we’re making it pretty darn difficult. That’s the way he wants it.”

In other business, various committees:

•Approved revised promotion and tenure criteria for faculty at the West Lafayette campus. The guidelines place a larger emphasis on faculty mentorship and student support.

•Approved the lease of the Indiana Manufacturing Institute at Purdue Research Park. The $50 million facility will house Purdue’s efforts to research lightweight composite materials.

All action requires subsequent board approval during its meeting at 9 a.m. Friday.