Incoming University of Massachusetts president Martin T. Meehan will make $769,500 during his first year on the job, including salary and benefits, according to terms of his five-year contract released Thursday.
The deal to oversee the five-campus university system will pay him slightly less than his predecessor, Robert Caret, and includes a penalty if he leaves before the end of the agreement.
Meehan’s overall compensation package will rise to $869,000 in 2019, with perks that include annual performance bonuses, retirement and life insurance contributions, and housing and car allowances.
The salary increases amount to about a 3.5 percent raise each year for Meehan in base salary, which starts at $525,000 when he begins in July, and will rise to $602,000 in five years. Caret’s annual raise was about 4.5 percent.
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Meehan, who made $459,000 this year as chancellor of UMass Lowell, said Thursday that he is pleased to have the contract negotiations behind him. In the past, he has said he has no intention of leaving early.
“This is my dream job and I am excited to get started,” he said in a statement.
UMass trustees chairman Victor Woolridge called the agreement fair, competitive, and in line with peer institutions and university guidelines.
“More importantly, this contract is also fiscally responsible,” he said in a letter Thursday to the rest of the board.
For the first time, trustees stipulated in the agreement that if Meehan breaks his contract, as Caret did, the president would owe UMass a penalty that begins at $150,000 next year and shrinks to $50,000 by 2019.
Caret announced in December that he would leave UMass to head Maryland’s university system, two months after trustees had negotiated a new contract for him that would have paid him $952,000 in overall compensation by 2018, the final year of his contract. Caret would have earned a $600,000 base salary that year.
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Unlike Caret’s contract, Meehan’s includes no deferred compensation payments, which would have awarded Caret an extra $200,000 over the life of his contract, according to UMass.
Meehan, who is 58, stands to receive annual performance bonuses of up to 11 percent of his base salary, and retirement contributions of 18 percent of his salary. Caret received bonuses of up to 15 percent and 20 percent retirement contributions.
In Maryland, Caret’s new contract will pay him $801,500 in total compensation in the first year of a five-year deal. He will also get the benefit of a car, driver, and a 12,000-square-foot mansion known as Hidden Waters in Baltimore County.
Meehan’s salary puts him on par with some other systems locally and elsewhere.
The University of Connecticut president makes $743,000 in salary and benefits, and stands to earn an additional $125,000 retention bonus next year. The president of North Carolina’s system earns about $600,000.
UMass this month also negotiated a new contract for UMass Amherst chancellor Kumble Subbaswamy that raises his base pay from $375,000 to $450,000. The chancellor is also eligible for annual performance bonuses equal to 20 percent of his salary as well as retirement and other benefits including a house on campus.
A new contract for UMass Dartmouth chancellor Divina Grossman is under negotiation.
Contact Laura Krantz at laura.krantz@globe.com. Follow her on Twitter @laurakrantz.
Correction: An earlier version of this story incorrectly described compensation for the University of Connecticut president.
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