Harvard Gave Ex-President Summers $2M Severance

Harvard University gave then-president Lawrence Summers a severance package valued at about $2 million when he surrendered the office last year.

The Ivy League school also paid $55.2 million in fiscal 2006 to the investment firm run by former endowment manager Jack Meyer, according to Internal Revenue Service documents. His Convexity Capital Management LP oversees bond portfolios for Harvard, the world's richest university with a $29.2 billion endowment.

Mr. Summers, 52, stepped down from the Harvard presidency 11 months ago after repeated clashes with faculty. His severance included a $1 million home mortgage loan, a one-year paid sabbatical, and "future salary supplements" totaling less than his final year's salary as president, the document said.

"It is comparable for the marketplace," said Claire Van Ummersen, 70, vice president of the American Council on Education's Center for Effective Leadership in Washington. "It is also a reflection on how competitive the presidential marketplace is at the current time."

The agreement could have been larger, Ms. Van Ummersen said, noting that Boston University gave Daniel Goldin, now chief executive officer of Intellisis Corp., $1.8 million even before he could assume the presidency. Mr. Goldin, hired to replace John Silber in 2003, never took office. Benjamin Ladner of Washington's American University resigned in 2005 under an agreement that paid him about $3.75 million.

For "Harvard, being an elite institution, this would probably be a fairly modest exit package," Ms. Van Ummersen said.

Harvard spokesman John Longbrake said the university in Cambridge, Mass., doesn't discuss employee compensation.

During Mr. Summers's final year, he received $714,005 in total compensation, including $580,115 in salary, $102,779 in expense accounts and other allowances, and $31,111 in contributions to employee benefit plans, according to the tax documents. Harvard also provided him with a home during his presidency.

Mr. Summers's wife, literature professor Elisa New, held a $250,000 mortgage and an education loan of $38,044, the document said. She received $179,056 in compensation, benefit plan contributions of $34,999, expense account allowances of $15,432, and loan interest subsidies of $1,154, the document said.

Mr. Summers declined, through a spokeswoman, to comment.

Mr. Summers, a former U.S. treasury secretary named president in 2001, served until February 2006, after professors in the Faculty of Arts and Sciences prepared a no-confidence measure against him for the second time. Professors criticized what they called an autocratic management style and comments he made and later retracted about women's aptitude in mathematics and science.

He also had several battles with faculty members including Cornel West, now African-American studies professor at Princeton University. It was the shortest tenure of any Harvard president since the U.S. Civil War in the 1860s. Mr. Summers returns to campus this fall as an economics professor.

Mr. Summers was replaced on an interim basis last July by Derek Bok, who served as president of the university between 1971 and 1991. Drew Gilpin Faust, dean of the Radcliffe Institute for Advanced Study, will become Harvard's president on July 1.

Mr. Meyer, 61, was chief executive officer for 15 years of Harvard Management Co., the university-affiliated company that runs the school's endowment, before leaving in September 2005 to form Boston-based Convexity. During his tenure, Harvard's endowment assets grew to $22.6 billion from $4.7 billion.

Mr. Meyer didn't immediately return a call seeking comment.

Harvard Management in recent years has run about half of the school's endowment money, with external firms managing the rest. Many of those are operated by ex-Harvard Management employees.

Between July 2005 and June 2006, Harvard paid $31.9 million to timberland investor Campbell Group LLC of Portland, Ore., and $31.6 million to Charlesbank Capital Partners LLC of Boston. Charlesbank, a private equity firm, is led by Michael Eisenson, a former managing director at Harvard Management.

Mr. Meyer took about three dozen Harvard Management colleagues with him to Convexity, saying their departure was due in part because of press and alumni outcry over the compensation of his managers. In fiscal year 2003, Harvard Management's two best-paid managers received $69.2 million.

Endowment managers have resigned from universities including Stanford and Duke to found their own investment firms.

Convexity raised $6 billion from investors by February 2006. The total included $500 million from Harvard.

Convexity ran even more money for the university during the months after Mr. Meyer's departure. The firm provided "significant value" to Harvard Management during the transitional period, Mr. Longbrake said.

Mr. Meyer was replaced in February 2006 by Mohamed El-Erian, former managing director of Pacific Investment Management Co. and a prominent emerging-markets bond investor.