College presidents' salaries are going up. Don't governing boards know they can hire dunderheads for a lot less money?

Salaries for private college presidents went up 5.6 percent between 2012 and 2013, according to a  Chronicle of Higher Education survey. Lee Bollinger is the highest paid president. He made $4.6 million in total compensation in the survey year. Amy Gutmann ranked second. Her total compensation was more than $3 million in the year of the survey including a bonus totally a cool million and a half.

Lots of these academic high rollers get salary enhancements in the form of puffball performance bonuses and deferred compensation packages that help them manage their taxes. As if some bloated college president needs the incentive of a  financial bonus in order to make key executive decisions like raising tuition, and outsourcing student services.

Of course the governing boards insist they have to pay ridiculous salaries to attract top talent. What a load of horse manure.  You don't need to pay $4.6 million to find a president wiling to defend race-based admission policies, like Bollinger did at the University of Michigan.

You don't need to pay a guy millions of dollars to wear a bow tie and host elaborate parties for big-shot donors, like Ohio State University did when it had Gordon Gee on the payroll.

Gordon Gee: Goof balls can be hired for a lot less money.

You don't have to pay $3.0 million a year to hire someone who writes mediocre books, which is what University of Pennsylvania pays Amy Gutmann, author of Democratic Education, one of the purest examples of academic bull crap you'll ever want to read. And Vassar could certainly find a dullard president for less than it pays Catharine Hill, whose only solution to the student  loan crisis is better counseling and long-term repayment plans!

You don't need to pay a half million or so to find a president willing to hold photo ops serving pancakes to students while presiding over a university that pays assistant football coaches a million dollars a year--more than the president himself makes--as Louisiana State University did when it hired F. King Alexander.

This is the same Louisiana State University, by the way, that is planning the construction of an $85 million "lazy river" recreational project that includes a "water feature" shaped in the letters of LSU.  Why is LSU doing this?

According to Laurie Braden, LSU's Director of University Recreation,  “I will put it up against any other collegiate recreational facility in the country when we are done because we will be the benchmark for the next level.” The next level of what--the next level of insanity?

I wonder how much Braden makes for dishing out that kind of logic?

University governing boards need to be clued in to this simple fact: They can hire dunderheads for a lot less than a million dollars  a year.  For a lot less money, presidents can be found who will sign contracts with Starbucks  so that university students pay four bucks for a cup of coffer instead of a quarter.  Presidents can be hired who will sign contracts with Barnes & Noble to sell overpriced textbooks to students and give the university a  percentage of the profits. Presidents can be found at reasonable salaries who will collude with banks and credit card companies to encourage students to utilize the services of favored financial institutions.

CEOs can certainly be found at very reasonable salaries who are willing to kiss the butts of student protesters and coddle the kids who take over the presidents' offices.

In short, this nation could run a crappy higher education system like the one we have for a lot less money.

LSU President F. King Alexander: Would you like pancakes with your fee bill?
Photo credit: Baton Rouge Advocate and Hilary Scheinuk

Feed Me, Seymour: New York University and Ohio State University Should Be Kicked Out of the Federal Student Loan Program

American colleges and universities love the Federal Student Loan Program.  Many of them wouldn't last a week if their students couldn't borrow money to pay their tuition bills.  And universities could




Feed me, Seymour!

not raise their tuition and fees every year were it not for the fact that student can absorb these increased costs simply by borrowing more money.

Does participation in the Federal Student Loan Program impose a moral obligation on universities to prudently manage their affairs? In particular, are they obligated to put some limits on their executive compensation packages and to disclose the terms of those packages to the public?

 

Apparently not.  Some universities--both public and private--pay their presidents and senior executives obscene salaries and lavish benefits like bonuses, travel and entertainment allowances, and luxury housing.  And they don't want the public to know about it.

 

Here are a couple of examples. Recently, the press reported that John Sexton, president of New York University, receives a salary of $1.5 million, and NYU gave him a loan on favorable terms to purchase a second home.  When he retires, Sexton's pension will be $800,000, and he will get a "length of service" bonus of $2.5 million if he stays on the job until 2015. 

And Jacob Lew, our new Secretary of the Treasury, received a $685,000 parting bonus when he stepped down as Executive Vice President of NYU to take the Treasury post.  That's right. In addition to a generous salary and other perks, NYU gave Lew two-thirds of a million dollars as a going away present.

Senator Charles Grassley decided to look into NYU's executive compensation practices to see if they were in keeping with the university's tax status as a non-profit organization.  Did NYU cooperate with Senator Grassley's investigation?

 

Not really. According to a New York Times story, Senator Grassley accused NYU of impeding his inquiry. For example, NYU representatives allowed Senator Grassley's staffers to view some

John Sexton

documents but would not allow them to be copied. On the date of the NY Times story, Senator Grassley still had not received all the information he asked for.

 

Would you like another example? In 2012, Gorden Gee was the highest paid president of a public university in the United States. In the fiscal year ending 2012, Gee made $1.9 million, including base salary, bonus, deferred compensation, and supplemental retirement contributions. In addition, he lived in a 9,6000 square foot mansion stocked with antiques, art work, and Persian rugs.  And according to Dayton Daily News, Gee spent an average of $23,000 a month on entertainment.
 

A guy pulling down that kind of money obviously has tax issues--big tax issues.  Not to worry. Under his university contract, OSU provides Gee with up to $20,000 a year in tax preparation and financial planning services!

 

Did OSU make the terms of  President Gee's entire compensation package available to the public? No, it did not.  The Dayton Daily News pried the information out of OSU through an open records request. And it took OSU eleven months to turn over all the documents the newspaper requested.

 

This, then, is the status of higher education in the current age. College costs go up every year and students have to borrow more and more money to pay for it. Many can't find decent jobs when they graduate and many default on their loans. How many? We don't know because the Department of Education won't tell us.  Meanwhile, our universities pay avaricious  oligarchs like OSU's Gorden Gee and NYU's John Sexton ridiculous amounts of money.

Does anyone believe our universities need to pay their leaders unseemly amounts of money and provide them with regal benefits in order to get good leaders? I certainly do not. 



Gordon Gee

In fact, the emergence of the imperial university president is a core reason our public universities are in the mess they are in. We've appointed people to run our colleges who want to become wealthy, and indeed some of them have become wealthy.

We should have university presidents who see themselves as first among equals in a community of scholars--people who will turn all their energies into making sure students get an education that will fit them for a 21st century economy and who will work night and day to keep tuition costs down.

We need federal legislation to regulate all the colleges and universities that receive federal loans.  First, all institutions that participate in the student loan program should be required to post their senior executives' compensation on their web sites--with a direct link from the university's home page.

And by compensation, I mean ALL executive compensation: salary, bonuses, enhanced retirement benefits, housing, travel and entertainment allowances, financial services, speaking fees, etc. And senior executives should be required to report compensation they get from any source, including nonprofit foundations.

And we also need federal legislation to require all universities that participate in the federal student loan program to cap salaries and compensation for their senior executives at some reasonable level--say $300,000.

If Ohio State University and New York University want to pay their presidents outrageous salaries, they are free to do so. But they should be kicked out of the federal student loan program until such time as they bring their executive compensation packages down to some level of decency. 

References

Laura Bischoff. OSU president expenses in the millions. Dayton Daily News, September 22, 2012. Accessible at: http://www.daytondailynews.com/news/news/state-regional-govt-politics/expenses-of-osu-president-run-into-millions-for-tr/nSGkK/

David Haglund. NYU Neatly Embodies Everything Wrong With Higher Education in America. Slate,, June 18, 2013. Accessible at: http://www.slate.com/blogs/browbeat/2013/06/18/nyu_loans_for_summer_homes_ny_times_story_about_university_pay_for_john.html

Ariel Kaminer.  N.Y.U. Impeding Compensation Inquiry, Senator Says. New York Times, July 10,2013.  Accessible at: http://www.nytimes.com/2013/07/11/nyregion/nyu-accused-of-impeding-compensation-inquiry.html?_r=0