Showing posts with label John Sexton. Show all posts
Showing posts with label John Sexton. Show all posts

Saturday, June 23, 2018

Dear taxpayers: I hope you approve of New York University's lavish compensation policy because you are paying for it

American Enterprise Institute's report on graduate schools with low rates of graduate-student repayment included a list of 20 universities where graduate students had above average non-repayment rates ranked by the amount of student loans graduate students took out. New York University is at the top of the list.

According to AEI's analysis, the 2009 cohort of NYU graduate- and professional-school students had amassed $1.135 billion in student loans. That's right: billion with a B. Five years later, more than a third of those students (34 percent) had not paid down their student loans by one dime.

New York University, you may recall, has been criticized for its lavish compensation packages for senior executives.  NYU won't disclose how much it is paying Andrew Hamilton, its current president. But John Sexton, Hamilton's showy predecessor, made $1.5 million in 2012-2013.  He retired with $800,000 in annual retirement income and a "length-of-service" bonus of $2.5 million.

Surely Hamilton is making as least as much as Sexton did. And NYU graciously updated Hamilton's penthouse apartment in Greenwich Village. How much did that cost? NYU won't say.

How does NYU manage to pay its executives so much? Does it have a large endowment? Not particularly.  NYU's total endowment funds amount to only $4.1 billion, about one ninth the size of Harvard's ($35.6 billion).

NYU gets a lot of its revenue from federal student loans. As just noted, graduate students in the 2009 cohort borrowed over $1 billion. That would be OK with taxpayers if NYU's graduate students paid back what they owe. But a lot of them are not.

AEI's list of universities with below average repayment rates for graduate students reveals that the top 15 schools with high levels of student-loan debt and below average rates of repayment are all private universities. Here's the list, along with the percentage of graduate students in the 2009 cohort who had not reduced the principal of their loans by even a dollar after 5 years.

New York University (34%)
University of Phoenix (36%)
Nova Southeastern University (33%)
Walden University (33%)
Capella University (34%)
Argosy University (37%)
Rosalind Franklin University of Medicine and Science (51%)
Keller Graduate School of Management (DeVry) (34%)
Midwestern University (22%)
Webster University (34%)
Grand Canyon University (28%)
National University--La Jolla (26%)
Strayer University (49%)
Thomas M. Cooley Law School (29%)
Touro College-Main Campus Midtown (22%)

What is the annual compensation for the senior executives at these institutions? Who knows? As private institutions, these universities are not required to disclose their compensation packages. But you can bet it is in the high six figures at all 15 universities.

So, Mr. and Ms. Taxpayer, I hope you approve of the federal government's student-loan program, which is shoveling money to private universities, because you are paying for a lot of lavish spending. Graduate students in particular are borrowing extraordinary amounts of money, and a high percentage of them have not paid any of it back five years into the repayment phase of their loans.


NYU president Andrew Hamilton:
Thanks, America! I love my swell penthouse apartment!

References

Jason Delisle. Graduate Schools with the Lowest Rates of Student Loan Repayment. American Enterprise Institute, June 2018.

Abby Ohlheiser. John Sexton will officially leave NYU in 2016. Atlantic, August 14, 2013.

Friday, July 18, 2014

Why Not Help Africa? American Universities Should Make a Civic Commitment to Strengthening Higher Education in Sub-Saharan Africa

Not long ago, the New York Times broke the scandal about New York University's new Abu Dhabi campus, which had been launched with much fanfare by NYU President John Sexton. According to the Times, construction workers for the Abu Dhabi campus, most of whom were migrants, were required to pay high fees just to get their jobs and forced to endure substandard living conditions.

NYU expressed regret for how the workers had been treated but suggested that it had no control over the contractor who hired the workers.  Later it was discovered that the owner of the construction firm that built NYU's Abu Dhabi campus sits on NYU's board of trustees!

John Sexton: Ain't life grand?
This unseemly incident illustrates how too many American universities involve themselves internationally.  For the most part, American higher education institutions confine their foreign initiatives to two activities: establishing overseas branches at exotic locations like Abu Dhabi or Shanghai or sponsoring Study Abroad experiences for American students, which are often little more than European travel adventures for both students and professors to places like Madrid and Rome.  I don't know how many students take out federal student loans to pay for their Study Abroad semesters, but I'll bet a lot of American students are funding their trips to the Great Wall with money they borrowed from Uncle Sam.

It is true of course that many American scholars make international contributions through such initiatives as the U.S. State Department's Fulbright Scholars program. But how many American professors have delivered papers at conferences in places like New Zealand, Hong Kong or Britain just to take brief foreign vacations at their universities' expense?

American university leaders like to boast that our nation's universities are the envy of the world, but if that is true, doesn't that impose a civic obligation on our universities to help make the world a better place?  And if that is true, why haven't American colleges and universities made more of a contribution to strengthening higher education and building the economies in the world's developing countries--particularly sub-Saharan Africa?

Sub-Saharan Africa
Right now sub-Saharan Africa is destabilizing. Boko Haram has captured school girls in Nigeria and burned children alive in a boarding-school dormitory. Kenya has suffered several recent terrorist attacks by Islamic extremists including an attack on a shopping mall in Nairobi. Uganda and Tanzania have been relatively free of terrorism in recent years, but a Catholic church was bombed in the Tanzanian town of Arusha in 2013 and people I talked with in Uganda think it is only a matter of time before Uganda experiences the same kind of terrorism that Kenya has begun to suffer.

East African universities are making a heroic effort to expand higher education opportunities for East Africa's young people. In particular, East African universities affiliated with religious denominations are growing and offering new programs designed to lead to good jobs for their graduates and to building stronger national economies.

But they are severely under resourced. They lack experienced faculty members, technology infrastructures, and adequate physical facilities. Often they lack higher-education management expertise.

Meanwhile, American universities have excess capacity. We have too many law programs, too many MBA programs, and too many colleges of education for the current demand. Why don't American universities offer some of their programs and some of their skills and expertise to aid African higher education?

If American universities would make a selfless contribution to strengthening higher education in sub-Saharan Africa, they would help strengthen the economies of the countries in that region and would help raise education levels of the young people of sub-Saharan Africa.  They would be helping to bring prosperity to a region wracked by poverty and crippled by centuries of colonial exploitation. They would be helping to foster the values on which western higher education is founded--values dedicated to the search for truth and justice and equality among all the peoples of mankind.

And by strengthening higher education in Africa, American universities would help stabilize a region that is rapidly destabilizing.  They would be directly refuting the philosophy of nihilistic terrorism that has begun to infect sub-Saharan Africa.

But perhaps helping Africa is too difficult for American universities.  Far easier to engage in self-indulgent Study Abroad programs and egotistical campuses in places like Abu Dhabi.  And far more comfortable. And far safer.

References

Adamu Adamu, Michelle Faul. 29 boarding school students burned alive, shot dead by Islamists militants in Nigeria. NBCNews.com. July 6, 2013.

Jon Lee Anderson. Letter from Timbuktu: State of Terror. New Yorker, July 1, 2013, pp. 37-47.

Clinton Lauds N.Y.U. Graduates, and Inquiry, in Speech. New York Times, May 25, 2014.

Ariel Kaminer. N.Y.U. Apologizes to Any Workers Mistreated on Its Abu Dhabi Campus. New York Times, May 20, 2014, p A16.

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

Tamar Lewin. Universities Rush to Set Up Outposts Abroad, New York Times, February 10, 2008. Accessible at: http://www.nytimes.com/2008/02/10/education/10global.html?pagewanted=all&_r=0

Andrew Ross Sorkin. N.Y.U. Crisis in Abu Dhabi Stretches to Wall Street. New York Times, May 26, 2014.

Tosin Sulaiman. Insight--Africa makes the grade for richest U.S. university investors. Reuters, July 7, 2013. Accessible at: http://www.reuters.com/article/2013/07/08/africa-endowments-idUSL5N0FB2IZ20130708

Friday, May 30, 2014

Transparency--The Last Refuge of a Scoundrel: New York University's Abu Dhabi Construction Scandal

Patriotism, Samuel Johnson remarked, is the last refuge of a scoundrel. But times have changed. Today,self-proclaimed "transparency" is the last refuge of the scoundrel--or at least of scoundrel universities.

Earlier this month, the New York Times broke the story of labor abuses during the construction of New York University's Abu Dhabi campus.  According to the Times, construction workers were required to pay hiring bonuses to get jobs, forced to work long overtime hours in order to obtain the wages they were promised, and crammed into substandard housing--sometimes 15 workers to a room.  Immigrant workers' passports were confiscated, and striking workers were arrested and beaten.

Transparency--the queen of virtues
New York University apologized immediately after the scandal broke, probably pulling a template apology from its public relations department files.  But it never took responsibility for what occurred.  In fact, NYU President John Sexton tried to distance the university from the scandal by claiming that the construction company, not NYU, was responsible for working conditions during the Abu Dhabi construction.

A few days later, NYU held its first graduation ceremony on its Abu Dhabi campus, and Bill Clinton showed up to give the commencement address.  Did he reproach NYU for the labor scandal? No he did not.

This is what Clinton said:
When this story came out, instead of going into immediate denial, the university did something which reflects the values you have been taught here . . . The university, and the government, promised to look into the charges, to do it quickly, to do it honestly and, most importantly, among all the world's skeptics, to do it transparently and if the charges were well founded, to take appropriate, remedial action promptly.
Ah, transparency!  The new queen of virtues.

But then, only a couple of days later, the New York Times reported that the construction company that built NYU's Abu Dhabi campus and apparently abused its construction workers, is run by Khaldoon Khalifa Al Mubarark, a member of NYU's boad of trustees!

So NYU President John Sexton was not being transparent when he suggested that NYU was not directly involved in the Abu Dhabi construction project.  In fact, the construction company's chief executive was sitting on NYU's board.

This is not the first time NYU has been caught being less than transparent. Remember when Senator Charles Grassley tried to get NYU documents pertaining to the low-interest loans it was giving favored administrators? NYU employees finally let Senator Grassley's staffers look at some pertinent documents but they would not permit any documents to be copied or allow Grassley's people to keep any documents for further review.

Some transparency!  Let's face it--New York University, which pays President John Sexton an obscene salary and has a board of trustees packed with Wall Street insiders, is about as transparent as a Louisiana crawfish pond.

Which is fine.  Let NYU run itself any way it chooses.  If it wants to pay its president $1.5 million a year, dispense exit bonuses to guys like Jacob Lew, and give low-interest loans to help insiders buy second homes--I say go right ahead.  But let's kick this renegade institution out of the Federal Student Loan program.


References

Clinton Lauds N.Y.U. Graduates, and Inquiry, in Speech. New York Times, May 25, 2014.

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

Andrew Ross Sorkin. N.Y.U. Crisis in Abu Dhabi Stretches to Wall Street. New York Times, May 26, 2014.

Tuesday, May 20, 2014

NYU's Abu Dhabi Labor Scandal: President John Sexton Should Compensate Exploited Workers From His Own Funds

Yesterday's New York Times reported on New York University's labor scandal in connection with the construction of its new campus at Abu Dhabi.  According to the Times, construction workers, who were largely recruited from East Asia, were crammed into overcrowded living quarters, deprived of their passports, and required to work overtime in order to achieve the wages they had been promised.

Photo credit Sergey Ponomarev for The New York Times       
If the Times report is correct, workers were not paid in accordance with NYU's "statement of labor values, "  which it issued as an explicit assurance that the Abu Dhabi campus would be constructed under fair labor standards. NYU responded to the Times story with a stock apology, but it made no promise to make things right. 

But an apology is not enough. NYU, which has one of the most highly-paid presidents in the country and which charges its students more than $60,000 a year for tuition, room and board, should tap its own resources to compensate workers who were exploited during the construction of NYU's Abu Dhabi campus.

Or better yet, President Sexton should dig into his own pockets to compensate the wronged construction workers.  He is due to get a $2.5 million "length of service" bonus next year, which he really does not need.  After all, President Sexton will receive $800,000 annually for the rest of his life when he retires from NYU.  And he is currently being paid more than $1 million a month to be NYU's CEO.

If President Sexton's $2.5 million bonus were divided among the 6,000 construction workers who were employed on the Abu Dhabi project, each worker would receive a little more than $400.  Four hundred dollars doesn't seem like much to  most Americans, but it represents about a month's wages to the Abu Dhabi construction workers. 

Having President Sexton help pay to make things right seems fair to me.  The construction of NYU's Abu Dhabi campus was an act of hubris and pride on President Sexton's part.  Giving up his extravagant bonus to help right the wrongs in Abu Dhabi would be a humble gesture, and  a touch of humility would do John Sexton good.

References

Ariel Kaminer. N.Y.U. Apologizes to Any Workers Mistreated on Its Abu Dhabi Campus. New York Times, May 20, 2014, p A16.

Monday, May 19, 2014

The Abu Dhabi Scandal: New York University Should Be Kicked Out of the Federal Student Loan Program

Today's New York Times carried a front-page story about New York University's recently constructed campus in Abu Dhabi.  According to the Times, the campus was built by immigrant laborers who worked under harsh conditions for salaries of as little as $272 a month.

Photo credit: NYU Photo Bureau



  


New York University pledged that the Abu Dhabi campus would be built by construction workers who would work under humane conditions and receive fair wages; but apparently that did not happen.  As many as 15 workers lived in tiny rooms, and apparently they were not paid the wages that had been promised to them.  When workers went on strike, the police were called in; and some of the workers were beaten.

New York University is a private institution with extremely high tuition--about $64,000 a year for tuition, room and board.  NYU students graduate with some of the highest student-loan debt levels in the country.  In 2010, NYU students graduated with a total of $659 million in student loans. That's right--nearly two-thirds of a billion!

Nevertheless, John Sexton, NYU's president, is compensated at an obscene level; and the university operates as if it should be answerable to nobody. And when I say obscene--I mean obscene.  President Sexton makes almost $1.5 million per year and is guaranteed a "length of service" bonus of $2.5 million.  When he retires--supposedly in 2016--he will receive annual retirement income of $800,000 a year.  Oh yeah--and he also get an apartment near Washington Square.

Here are a few other recent stories of unseemly behavior by this behemoth institution.
  •  According to a recent news story, the university provides a luxury apartment for scholar Henry Louis Gates at below-market rent. Professor Gates is not even employed by NYU; he works at Harvard.
  • NYU paid Jacob Lew, now Secretary of the Treasury, an exit bonus of several hundred thousand dollars when Lew left NYU to go to work in private industry.
  • NYU gave President Sexton and other favored faculty members low interest loans to purchase second homes. For example, a former law school dean and his wife used a NYU loan to buy a 65-acre estate in Connecticut. 
NYU has the right to operate as it wishes and to disregard its many critics.  The governing board has paid no attention to a vote of no confidence in Sexton's leadership that the Arts & Science faculty issued in 2013.

But does NYU deserve to participate in the Federal student loan program, which is financed by American taxpayers, when it shows so little regard to financial propriety?

I don't think so.  If it wants to pay its president more than $1 million a year and start a high-profile campus in the Middle East, let it do so.  But NYU should not benefit from a federal student loan program that was intended to provide broader access to higher education--not subsidize a lavish and unseemly enterprise.

References

Jake Flanagin. The Expensive Romance of NYU. Atlantic, August 13, 2013. Available at: http://www.theatlantic.com/national/archive/2013/08/the-expensive-romance-of-nyu/278904/

Ariel Kaminer &  Alain Delaquieriere. N.Y.U. Gives Its Stars Loans for Summer Homes. New York Times, June 17,2013.

Ariel Kaminer & Sean O'Driscoll. Worker's at N.Y.U.'s Abu Dhabi Site Face Harsh Conditions. New York Times, May 19, 2014, p. 1.

Abby Ohlheiser. John Sexton will officially leave NYU in 2016. The Wire, August 14, 2013. Available at: http://www.thewire.com/national/2013/08/john-sexton-will-officially-leave-nyu-2016/68346/

Bruce Wright, Harvard Prof. Henry Louis Gates Gets Unreal Housing Perks from NYU. Boston.com, May 17, 2014. Available at: http://www.boston.com/news/nation/2014/05/17/harvard-prof-henry-louis-gates-gets-unreal-housing-perks-from-nyu/pXTFg7YDd3BMSekltbQ4tI/story.html






Monday, July 15, 2013

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