Light shed on housing for college presidents
New IRS guidelines require estimate on compensation deals
Harvard’s president lives on Cambridge’s historic Tory Row in a 12-room Colonial whose rental value the university estimates to be $8,000 a month. Northeastern says its president’s five-story Beacon Hill town house with Boston Common as its front yard would rent for just $6,225 a month. And the MIT president’s stone manse, with sweeping views of the Charles River and Boston skyline, would go for even less — $5,800 a month.
For the first time, the IRS this year is requiring private colleges and universities and other nonprofits to factor in the value of certain nontaxable perks — such as the estimated fair-market rents of the housing many schools provide for presidents — in reporting executives’ total compensation packages.
The new rules, effective with the 2008 tax filings colleges submitted last month, aim to capture a more accurate and transparent picture of how top administrators are rewarded. But a Globe examination of the latest filings from 10 Greater Boston colleges shows a wide variation in how schools interpret the requirement.
The priciest presidential home, according to the documents, belongs to Boston University’s president, Robert Brown. He lives in a five-bedroom Brookline mansion that the university estimates would rent for $21,000 a month — more than three times the value of his MIT and Northeastern colleagues’ homes — bringing Brown’s total salary and benefits to more than $1 million and making him the most highly compensated college president in the area.
In determining rental value, BU assessed the entire house, while other universities counted only the portion considered to be a private residence. The ground floor of a college president’s home often serves as public space for entertaining visiting dignitaries, faculty, students, and alumni. Brown himself describes where he lives as “an apartment over a restaurant,’’ since his home is used weekly for such university functions.
IRS instructions do not specify what portions of the homes should be counted in executives’ compensation, said BU spokesman Steve Burgay.
“We just decided to err on the side of valuing the entirety of the house,’’ Burgay said. “No one likes to be at the top of that list, but it is what it is.’’
Local real estate specialists say many of the other presidential homes would fetch thousands of dollars more on the open market than schools have reported.
One Boston realtor who specializes in luxury sales and rentals scoffed at Northeastern’s rental estimate for the house of its president, Joseph Aoun.
“No, that would be more like $20,000 a month,’’ said the realtor, who spoke on condition of anonymity to avoid alienating university clients.
But the majority of Aoun’s house is used for community events, even when the president is not home, said Northeastern spokesman Michael Armini. Aoun once said that the only place he truly feels at home in the massive abode is in his bedroom.
Another realtor, Tina Kaneb of Coldwell Banker in Cambridge, estimated the rental value of the MIT and Harvard residences at $12,000 a month each — a figure Harvard acknowledges in its tax filings would be accurate if the entire house were to be counted rather than just president Drew Faust’s private quarters.
“There are still areas that are open to interpretation as to what gets counted and what doesn’t,’’ said Richard Doherty, president and CEO of the Association of Independent Colleges and Universities in Massachusetts. “It gets a little tricky in terms of valuing housing. I think for the first few years, this will bounce around a bit.’’
On the lowest end of the housing spectrum are Tufts and Wellesley, which estimate their presidential homes to be worth just $3,500 a month in rent.
Then there’s the Boston College president, the Rev. William Leahy, who resides in simple quarters on campus in Saint Mary’s Hall, a Jesuit residence that the college says does not have a market value. Leahy also does not collect a salary, given the vow of poverty he has taken as a Jesuit priest, said a campus spokesman.
The IRS is in the midst of conducting an audit of more than 30 colleges and universities, including Harvard and Suffolk universities, focusing on executive compensation and analyzing possible reporting inconsistencies. Spokeswoman Peggy Riley said the agency may consider changes to its tax guidelines if many discrepancies are found.
The new IRS reporting requirements allow for more equitable comparisons of presidential compensation packages and could take some of the spotlight off one local college president.
Suffolk University president David Sargent received criticism from some faculty, students, and alumni for his $1.5 million compensation, making him the second-highest paid private college leader in the nation in 2007-08.
According to the latest filing, Sargent’s total compensation of $832,782 in 2008 placed him fourth on the list of local college presidents — in part because he does not live in university-owned housing.
The new filings also disclose for the first time some of the other trappings of presidential power. Some, including the presidents of MIT, Brandeis, Tufts, and Wellesley, have maids. Most travel first class, often bringing their spouses. And the presidents of Suffolk, Brandeis, and Boston College receive health or social club dues.
Senator Chuck Grassley, an Iowa Republican who helped push for the tax filing changes, says the fuller disclosure gives the public a better picture of compensation.
“The more transparency, the better, to hold the public’s trust,’’ Grassley said in a written statement to the Globe. “With disclosure, the public is informed to discuss what’s appropriate.’’
Tracy Jan can be reached at email@example.com.