Penn State’s Board of Trustees on Friday approved contract amendments that will boost university President Neeli Bendapudi’s total annual compensation by about $1 million.
Trustees voted 34-1 to increase Bendapudi’s base salary from $950,000 to $1.4 million, with an automatic 3.5% raise each year through 2032. A annual retention bonus — which will be paid out in lump sums 2027 and 2032 —increases from $300,000 to $525,000. And annual supplemental retirement plan payments rise from $555,000 to $650,000.
Bendapudi also will receive annual performance bonuses of up to 15% of her base salary, “provided the President meets mutually approved goals,” according to the term sheet.
In total, the increases bring Bendapudi’s annual compensation to $2.785 million.
Bendapudi was No. 7 among highest-paid public university presidents in 2024 and the second-highest in the Big Ten behind Ohio State’s Ted Carter, according to the Chronicle of Higher Education’s annual survey.
The contract revisions came after an annual performance evaluation, along with benchmarking market data from Big Ten and other peer institutions, according to the university. Penn State’s size and complexity were also factored in. External consulting firm Segal provided data on presidential compensation trends and higher education market assessments.
Board chair David Kleppinger credited Bendapudi for leading Penn State to a balanced budget “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.”
“Overseeing such a vast academic, research, health and athletics enterprise through these changes has been no easy task — particularly with all of the challenges facing higher education as a whole — but her leadership is instrumental in positioning Penn State for future success and growth,” Kleppinger said in a statement. “With today’s vote, the board recognized her accomplishments and signaled its intent to work with and support her for years to come.”
Bendapudi, who began her fourth year at the helm of Penn State in May, has overseen a period of sweeping change at the university, much of it centered on addressing financial pressures and balancing a budget that had an operating deficit of as much as $200 million when she took office.
That has led to significant cuts to some programs, voluntary buyout offers to certain employees, the decision earlier this year to close seven Commonwealth Campuses and as recently as Thursday the pending shutdown of WPSU after trustees turned down an offer to transfer the university-owned radio and television stations to another public broadcaster.
“As I shared in July [when the board reviewed the report on her annual assessment], President Bendapudi has brought about a cultural shift bringing greater accountability, transparency and clarity to how our university allocates and manages its resources,” Kleppinger said. “Throughout all of this, she has kept student success at the center of her vision for Penn State, allowing us to continue to strengthen the Penn State experience for all of our students.”
