Penn State board approves $1 million compensation hike for president

Pennsylvania State University’s Board of Trustees Friday voted 34-1 to give Neeli Bendapudi a $1 million increase in compensation and extend her contract to 2032.

The vote came without discussion at a meeting where trustees also agreed to ask the Commonwealth for a $49 million increase in funding next year to avoid a tuition increase for all undergraduate students across the system. A board committee had discussed the proposal on Thursday and voted unanimously to recommend it to the full board.

Bendapudi’s overall compensation for 2025-26 will rise to $2.8 million, up from $1.8 million.

» READ MORE: Penn State board committee approves raising the president’s compensation by $1 million

That includes an increase in base salary from $950,000 to $1.4 million with an automatic 3.5% increase in every subsequent year. She also will get an increase in the retention component from $250,000 to $525,000 annually with the first payment to come June 2027 and the second June 2032. She will receive an increase in deferred compensation from $555,000 to $650,000, beginning July 1. The proposal also includes a new performance-based incentive of up to 15% of the base salary if she meets her goals.

“President Bendapudi has led the University to a balanced budget and more than $560 million through philanthropic commitments, while also continuing to strengthen the Penn State research enterprise and advance Penn State Health — all with a laser-sharp focus on the core academic mission of Penn State,” said Board Chair David Kleppinger.

He credited her with spurring “a cultural shift bringing greater accountability, transparency and clarity to how our university allocates and manages its resources.”

Board member Anthony Lubrano cast the lone no vote.

The new package comes as Bendapudi begins her fourth year at the helm of the flagship state university at a particularly challenging time for college presidents, given political and financial pressures. Bendapudi in July earned high marks from trustees in her evaluation and got a standing ovation at the meeting.

The board considered market data from other schools in the Big Ten and others considered to be in the president’s peer group, the university said, noting that with more than 87,000, students, Penn State is one of the largest and most complex universities in the nation.

During the committee meeting Thursday, the consultant who presented Bendapudi’s recommended package said her compensation currently ranks just below the median in comparison with her peers and that the raise would take her to the 80th percentile.

In 2024, Bendapudi placed seventh in overall compensation among 180 public doctoral university presidents, according to the Chronicle of Higher Education, which released its survey results this month.

On appropriations request, the university’s planned request for an approximate 20% increase would raise its general support from the state to $291 million and its overall funding to over $410 million. Its general support has remained flat at $242.1 million since 2019-20.