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August 20, 2007

Higher education executives want the best of both worlds

Thomas Lifson
The taxpayer-supported University of California is seeing off departing president Robert Dynes with a cushy severance package. Matier & Ross, the outstanding investigative reporters at the San Francisco Chronicle, lay out the shape of the going away present:

"...first he will be entitled to a full year's paid leave to brush up on his studies." [....]
"Now that he has to vacate the UC-provided president's mansion in Kensington, Dynes - like all senior administrators - is eligible for a low-interest home loan to help him relocate.... it's uncertain whether Dynes will take advantage of the benefit." [....]
"When Dynes chooses to retire completely from academic life, his pension will be based on a percentage of the average of his last highest-earning years. That would include his time as president.

"Upshot: Calculations show that if he were to stop working next June, he could either cash out for $1.6 million or get $145,524 a year in retirement pay."
All of this coming to a guy they say was
"nudged out as UC's top dog after a string of embarrassing stories about the university's liberal pay and perk packages for top managers"
So the punishment for embarrassing the university by wretched excess in pay and perks appears to be more wretched excess for the miscreant! That is a form of twisted logic that can only exist within an organizational culture that regards itself as exempt from any accountability to others.
A similar contempt for taxpayers and tuition-payers is the way top UC managers try to have the best of both worlds: academia and corporations. When justifying their increasingly high salaries, university presidents and other top academic managers cite pay scales for executives of comparably-sized private companies.

But when it comes to the academic perks, little things like 400 grand for a full year's vacation, then the robes come out and it's perk, perk, perk your way to financial happiness. Like the outrageous bennies granted the late Denice Denton  (a $30,000 backyard dog run for the Chancellor's mansion at the University of California Santa Cruz and a high paying job for her female companion among others), the incident once again betrays the get-it-while-you-can attitude that evidently permeates upper ranks of academia in places like the University of California. I am reminded of the scenes of Russian revolutionaries invading the homes of the aristocrats and grabbing whatever they could carry off of the lifestyle enjoyed by those they have hated and envied their entire lives.

If top management of big schools wants to play in the corporate major leagues when it comes to pay, then they should obey the league rules there, like personal accountability for performance metrics, strict accountability for their decisions, transparency in accounting and broad disclosure that goes beyond Sarbanes-Oxley, since they are nonprofits and some are organs of government.

There is a risk component to executive responsibility in corporations, and that is one justification for the high pay. If academics do not want to bear the risks, then they don't deserve comparability in pay.

Thomas Lifson is editor and publisher of American Thinker.

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