Derek C. Bok earned $81,659 last year, his highest salary in 12 years as Harvard's president. The University of Chicago's president Hanna Gray pocketed more, with earnings of $105,000. So did the presidents and chancellors of most leading universities.

Bok, in fact, wasn't even close to the top moneymaker among Harvard officials. Publicly available financial forms show that, in 1981-1982, Bok was out-earned by two deans, one University Health Services surgeon, two Medical School professors, and a vice president. And while the precise salaries of individuals are known to only a handful of officials, another 20 Med School faculty members probably bring home larger Harvard paychecks than Bok in any given year, according to Financial Vice President Thomas O'Brien.

Bok's surprisingly modest salary salary reflects the two chief tenets of Harvard's approach to setting administrators' pay. To the extent that the president's wages are topped by those of his Harvard underlings, the inversion shows the importance Harvard puts on market considerations and individual performance in setting the pay of key officials. And to the extent that Bok's salary is dwarfed by those of other university presidents, it largely reflects Harvard's unusual interest in keeping-even its highest-paid officials in the same ballpark as the rest of the administration.

Four years ago, just one of the University's top five wage-earners was a Med School official. But in 1981-1982--the latest year for which figures are publicly available--four were: Dean Daniel C. Tosteson '44 ($109,500), UHS director of surgery John R. Brooks '40 ($108,019), Higgins Professor of Physiology Howard Green ($85,500) and Andrus Professor of Genetics Philip Leder ($85,000) Only Dean of the Faculty Henry Rosovsky, in third place with $86,500, stood in the way of a Med School sweep. (As a "public charity," Harvard is obliged to file its top five salaries in annual tax forms.)

The sudden surge in medical officials' salaries, says director of Personnel Daniel D. Cantor, is reflective of the market. These things swing back and forth like a pendulum "If Med School administrators earned any less. Cantor says, "they'd be lower than most of the professionals reporting to them and would be tempted to leave Harvard for private practice.

O'Brien also explains Tosteson and Brooks six figure salaries--the first in the University's history by describing the men's skyrocketing market value. "At every University in the country, the dean of the medical school is probably the highest or second-highest paid person. If Harvard wants to be one of the top universities in the country you've got to compete."

And of Brooks, O'Brien says, "To get a surgeon as eminent as he is as the University's chief surgeon we consider ourselves very fortunate. If you talk to anyone who's had their gallbladder out [at a Harvard hospital]. John Brooks has probably done it."

Brooks, however, puts forth an additional reason for his hefty paycheck: he wears two hats. Not only did he net about $82,000 for his UHS job in 1981-1982, he says, but he also drew $46,000 from his newly endowed professorship of Surgery, of which he set aside $20,000 for retirement. That chair was donated by and named after former patient Frank Sawyer, who Brooks says "likes me because I've kept him alive for some time."

Yet if the market has put extra money in the pockets of medical administrators, it has also boosted the wages of non-medical specialists.

Vice President for Alumni Affairs and Development Fred L. Glimp '50, for example, surpasses Bok and the three other vice presidents with his 1981-1982 salary of $83,500. Glimp's wages not only reflected his greater experience, but also heightened demand for his skills. "If you looked at the whole development and fundraising area," O'Brien says, "you d find it's becoming an incredibly valuable part of the economy."

When professors' salaries are determined, marketplace realities take a distant backseat to a professor's age and experience in the Harvard system. But when the Corporation kicks off the annual process of setting administrative salaries each fall, it looks primarily to two very traditional factors: supply and demand.

"We're competing in a whole series of markets," emphasizes University Treasurer George Putnam '49 So the Corporation considers Boston area wages for a given position and the salaries of similar workers at comparable universities, in addition to the University's overall financial condition. Ultimately the board settles on average and maximum rates of salary increase for given positions, Putnam says. For 1982-1983, those average rates hovered between 8 and 8.5 percent, differing relatively little across positions Putnam says That rate will probably stay the same for next year's raises, officials predict.

But once the Corporation forwards its salary parameters to individual fiefdoms around the University, market considerations give way to what administrators call "equity" concerns. An official's salary can diverge up to about 3 percent from the average set by the Corporation, Putnam says. How much it does depends entirely on the judgment of one person: the individual's supervisor.

Thus Bok, for example, sets the salaries of each of the deans and vice presidents. Rosovsky fixes the pay of his deputies, such as Dean of the College John B. Fox Jr. '59 and Dean of Students Archie C. Epps III, who in turn determine what the paychecks of their aides will show. Dr. Warren E.C. Wacker, director of UHS, is responsible for the $86,000 lion's share of Brooks's six-figure salary.

And across the board, supervisors stress that they consider an official's responsibilities, salary and job history, age--and his performance. Where the Faculty downplays performance as too elusive a criterion for determining professors' salaries, supervisors agree that it is the single most important factor determining how far an administrator's salary increase will diverge from the Corporation-set average for his position.