Vanderbilt chancellor received nearly $3 million bonus amid layoffs

May 30, 2018

VU Chancellor Nick Zeppos
Credit VU

NASHVILLE, Tenn. (AP) — Vanderbilt University's chancellor received a nearly $3 million bonus in 2016 following rounds of layoffs and budget cuts at the private school.

The Tennessean reports Chancellor Nicholas S. Zeppos was credited with $4.3 million in total compensation in 2016, including a $2.9 million bonus. The financial information is based on Vanderbilt tax returns provided in response to a request, the newspaper said.

Zeppos' responsibilities were reduced in 2016 when the university split with Vanderbilt University Medical Center. His total pay that year was comparable to the highest-paid presidents of private universities in the country in recent years.

The timing raises questions of the reason for the bonus, considering budget cuts and layoffs at Vanderbilt in the years preceding the incentive payment.

Vanderbilt spokesman Princine Lewis declined to provide the specific reason for Zeppos' bonus when asked if it was paid for certain goals met or completion of a contract.

Zeppos has overseen tremendous growth since becoming chancellor in 2008. Vanderbilt's endowment has increased by more than $1 billion in the past decade, and the university is ranked 10th in innovation and 14th overall by U.S. News & World Report among the country's best colleges.

"Several Vanderbilt University leaders, including Chancellor Nicholas S. Zeppos, received one-time incentive payments in 2016 related to their accomplishments as leaders of a top-tier, internationally-renowned research university," a Vanderbilt statement said.

But 2016 was a year that saw cost-cutting measures and the university and medical center split into two separate entities. That reduced Zeppos' role to chancellor of only the university.

In 2013, Vanderbilt University Medical Center officials said they would cut about 1,000 jobs as part of a $250 million reduction to a $3.3 billion operating budget, but they ultimately kept about half of those employees.

In 2015, nearly 200 employees were laid off immediately, without notice, which they contended in a class-action lawsuit violated the Worker Adjustment and Retraining Notification (WARN) Act, which requires 60 days notification when layoffs impact large numbers of employees.

The laid-off employees won the lawsuit that would have cost the university about $400,000. But in 2016, the 6th Circuit U.S. Court of Appeals reversed the decision, refusing to allow the initial group of laid-off employees to include 279 other laid-off workers from the same year in their suit because they were terminated too many days apart to enact the WARN Act.

The same year the laid-off employees lost on appeal, Zeppos was paid a $2.9 million bonus, just as the university and medical center split.

Dr. Jeff Balser was tabbed president and CEO of Vanderbilt University Medical Center, and Zeppos was named to the 11-person governing board for the medical center.