Penn State’s Board of Trustees on Friday approved a $210,000 performance bonus for university President Neeli Bendapudi.
Under the terms of her contract amended in September 2025, Bendapudi is eligible for a bonus of 15% of her base salary for meeting annual performance goals mutually agreed upon with the board. During its meeting at Penn College in Williamsport, the board approved the maximum bonus available for Bendapudi, whose 2025-26 base salary was $1.4 million.
The bonus was recommended by the board’s Committee on Equity and Human Resources. Bendapudi is eligible for a performance bonus every year of her employment agreement, which runs through 2032.
Trustee Jay Paterno said that “retention of presidents is vital” in the Big Ten, where the current average presidential tenure is about 1.5 years.
“So I think it’s important that we understand the marketplace that we are in and why these things are meaningful and important to do,” Paterno said. “I also think that it will be a time in the future for us as a board and other boards to have discussions about structures of what presidential contracts should look like. That’s not the time for this now, but I just want to make sure people understand we’re fortunate that we have a president who’s been here for four years already because that’s not the norm in our conference. This is not a stepping stone job in the Big Ten.”
Board Chair David Kleppinger added that “it’s clear that stability and leadership is very important right now in higher education space.”
“We’re fortunate to have a president that’s committed to being with us for the long term,” Kleppinger said. “I believe President Bendapudi is now the third or fourth most senior president in the Big Ten conference with a four-year history. It goes to show how short some of the tenures are and the disruptions that can occur with presidential transitions.”
Bendapudi has overseen a period of sweeping change during her tenure at Penn State, 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 last year to close seven Commonwealth Campuses and the pending transfer of WPSU TV and radio from university ownership to public broadcaster WHYY.
Trustee leadership has often praised Bendapudi for making tough decisions to balance the budget while focusing on accountability and advancing the university mission.
The updated contract approved last year by the board increased her base salary by nearly $500,000, with an automatic 3.5% raise each year through 2032, which along with bonuses and increases to supplemental retirement plan payments boosted her total compensation by about $1 million to $2.785 million.
The performance bonus and 2026-27 presidential goals approved Friday came during a meeting in which trustees also authorized an $11.1 billion budget for 2027-28 that includes tuition increases for all but in-state Commonwealth Campus students and increases to room and board rates. The budget also includes a 3% merit-based salary increase for employees funded in the education and general budget and 4% for graduate assistant stipends. (Because Penn State operates on a two-year budget cycle, budgets and tuition rates are set a year in advance.)
Paterno and Matt McGloin were the only trustees to vote no on the 2027-28 budget and tuition rates.
