University Funds Shrink by 18.7% by While College President Salaries Increase by 15.5%
“Is this a misprint?”
That is what a colleague of mine stated to me after he read this piece. And he’s right. It almost seems too hard to believe. University endowments experienced their worst declines since the Great Depression in the fiscal year that ended June 30, 2009, dropping 18.7%. The steep losses were primarily the result of risky investments, according to a study released by the National Association of College and University Business Officers and the Commonfund Institute.
Those losses are in sharp contrast with another trend in higher education — rising salaries for university officers. In November, Sen. Chuck Grassley (R-Iowa) expressed concern about the growth of college president’s salaries, which he noted were increasing even at a time when students and their families were struggling to pay tuition bills.
Sen. Chuck Grassley expressed concern, and rightly so, that private college presidents’ salaries continue to go up even as tuition increases for students, according to a new survey from The Chronicle on Higher Education. Grassley keeps an eye on tax-exempt organizations such as colleges to ensure adherence to their charitable mission in keeping with their special tax-exempt status. Here is what the Senator had to say…
“The executive suite shouldn’t be insulated from belt-tightening,” Grassley said. “The pressure on students and families gets greater all the time. The fact that these salaries are growing right now is out of sync with the reality for most parents and students who are trying to pay for college in the midst of high unemployment and after savings for education were either wiped out or greatly diminished last year due to the stock market falling.”
Some of the colleges are paying former officers high salaries, and 58 private colleges now charge more than $50,000 a year in tuition, room, board, and fees, compared to only five last year, according to the Chronicle. “It’s stunning that so many schools are paying high six-figure salaries to former officers,” Grassley said. “You wonder if these colleges are giving away the store when they sign contracts with employees. A college’s mission as a tax-exempt entity is to educate students, not subsidize former employees.”
Twenty-three college presidents on that list made over $1-million in total compensation, and one in four of all those in the survey were over the half million mark. New this year is The Chronicle of Higher Education’s analysis of “former officer” pay as reported on federal tax forms: 85 of these institutions (20%) were paying at least one former officer or key employee more than $200,000 in compensation in 2007-2008, several with as many as four still drawing pay checks.
The highest compensated private university executive was Shirley Ann Jackson, Rensselaer Polytechnic Institute in Troy, N.Y., whose package totaled $1,598,247 in fiscal year 2008. Next on the list after her were: David J. Sargent of Suffolk University in Boston, who held the top spot for fiscal year 2007 and took in $1,496,593 this past year; Steadman Upham of the University of Tulsa took third place with $1,485,275.
Three private institutions paid a “former officer” more than $1 million in 2007-8: George Washington University’s former president Stephen J. Trachtenberg got a package totaling $3,664,569; Oberlin College paid former president Nancy S. Dye $1,460,420; and Emory University’s Michael M.E. Johns received $1,006,188. The remaining seven former officers on the top 10 list all were paid well over $600,000 in 2007-8.
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