Executive Compensation at Private Colleges

[GMTplus7]

<p>

These guys are bureaucrats who have played the game of politics well, and are being paid huge dollars, authorized by thier friends on the board of trustees, to do what tons of other people could do just as well.

So what? If mega-rich private institutions want to pay their presidents well with their private mega-hoard, they can have at it-- it’s private money. </p>

<p>The only thing that gives me heartburn is why taxpayers have to subside these fabulously-endowed schools w free property taxes to maintain these schools’ extensive acreage footprint. Schools with endowments of tens of billions of dollars (i.e. trust funds w schools) should pay their fair share of funding the local services they use, like the fire dept, the sewerage system, the streetlights, paving potholes, etc… </p>

[letsbefrank]

<p>Not too difficult Sue. I see nothing challenging in their jobs. But that begets the point that these institutions are bankrupting the American public and have abdicated their roles to produce a reasonable education for a reasonable dollar. That’s my opinion. Free to agree or disagree.</p>

[Sue22]

<p>GMTplus7-
Many colleges (not sure if it’s most or just many) make PILOT payments (Payments In Lieu Of Taxes) to the local community and allow local groups to use their facilities. For instance, I grew up in a college town where town residents could use the school’s gym and pool at an extremely reduced rate. It probably doesn’t fully make up for lost real estate and tax revenue, but then these schools would probably argue that they bring a tremendous amount of commerce into their host communities and stimulate local economies.</p>

[halfemptypockets]

<p>

ou all may think its supply and demand. I see it as the super rich taking care of themselves at the expense of 99% of the rest of the country.

</p>

<p>I’m just speculating, Frank, but my guess is you’re actually in that top 1% in income, or at least you have been in some years. </p>

<p>How do you reconcile your lifestyle

I like driving a BMW. I like taking a European and Alaskan cruise now and then. I like Ski vacations in the West and going to the National Parks. The kids come with us and so they benefit to. The kids get reasonably priced dance lessons, figure skating lessons, etc.

</p>

<p>and this attitude

I work hard, and I think we are entitled to vacations and to eat out and all the other things an upper middle class lifestyle brings. And I would resent that my kids would have to pay twice as much as the average kid going to Amherst, so this school would not even be on my radar.

</p>

<p>with this attitude</p>

<p>

I just think that the country is going down the tubes because of the amount of greed as evidenced by those at the top of the pyramids,

</p>

<p>I don’t begrudge you a single ski vacation, Alaskan cruise, or prepaid college tuition. I say good for you and your kids. You’ve not only supported your own family in style, you’ve contributed greatly to the economy and the wealth of others by spending your money in the way that suits you and your family. Why are you begrudging others the same? Capitalism when it helps me/socialism when it doesn’t is an interesting combination to say the least. </p>

[letsbefrank]

<p>By the way, when I say its not too difficult, I don’t mean anybody can do the job, but that lots of people could do the job. These are not unique people building organizations from the ground up. These are administrators and bureaucrats doing the same jobs that many others could do given the chance to do so. But in our entitled world of “elite” education and ceo’s of large organizations . . . huge compensation even for doing a middling job is par for the course. Look at the former President of Penn-State, paid a million or more a year, who didn’t even have the wherewithal to recognize it was a mistake to sweep the sexual misconduct allegations under the rug instead of reporting the same to the authorities, as required by law. Was it really difficult for this guy to ask his lawyers . . . what are our obligations here? Its arrogance. Its a sense of entitlement. That’s why we are where we are in the country, with huge inequality and an economic system that is going to come crashing down unless there are changes made before it is too late.</p>

[Consolation]

<p>

Different insurances companies get charged different rates, insurance companies are practically always charged (meaning they pay less) than the hospital would charge an individual with no insurance,

</p>

<p>Okay, I’m with you up to this point. People with no insurance are routinely charged a LOT more. Of course, people with no insurance can also go through the process of applying for charity care, depending on their income and assets–basically, you have to apply for Medicaid and be rejected–so that mitigates it to some extent. But that applies only to hospital charges, not doctors who practice at the hospital. Separate arrangements have to be made with them.</p>

<p>

and hospitals will discriminate and try to gouge rich customers more than poor customers because they think they can extract more out of the rich.

</p>

<p>Here you lose me. The “rich” customers have health insurance, and their charges are knocked down to their insurer’s “usual and customary” rates. </p>

<p>Please explain how you think they are being gouged?</p>

[letsbefrank]

<p>half, I am not begrudging anybody anything. I am stating plain and simple that the educational industrial complex is far too expensive for what it is offering most of its students these days, and that there will be a time for reckoning sooner or later. I really don’t care what the bureaucrats pay themselves, but I point it out because that is a symptom of the many problems we have. But again, this is just a symptom of Corporate America at large who is paying less and less to the employees who make their businesses viable rewarding those at the top with astronomical amounts of money. Without a viable middle class . . there will be nobody to buy the goods that corporate America produces. Sooner or later the chickens are going to come home to roost. </p>

[halfemptypockets]

<p>

So what? If mega-rich private institutions want to pay their presidents well with their private mega-hoard, they can have at it-- it’s private money.

</p>

<p>Exactly. On another note, I know some places are beginning to charge colleges property taxes. At least some have entered into private agreements. I think Providence Rhode Island charges Brown and maybe other schools.</p>

<p>Here in Philadelphia, colleges and their associated hospitals are huge employers. I literally know dozens of employees of them. I think we’d need to be careful about sweeping, drastic changes in non-profit status, as ridiculous and scammy as that non-profit status often is.</p>

[halfemptypockets]

<p>

I am stating plain and simple that the educational industrial complex is far too expensive for what it is offering most of its students these days, and that there will be a time for reckoning sooner or later.

</p>

<p>Yes, Frank, the market will sort it out. </p>

[Consolation]

<p>

@letsbefrank

I just think that the country is going down the tubes because of the amount of greed as evidenced by those at the top of the pyramids, whether it be CEOs of private businesses or Administrators at the top of these non-profits. You all may think its supply and demand. I see it as the super rich taking care of themselves at the expense of 99% of the rest of the country. This inequality cannot continue or its the end of the USA and its capitalistic system. That in the end is my opinion.

</p>

<p>This much I definitely agree with.</p>

[emilybee]

<p>“Emily, negotiating happens with the out-of-pocket costs. This has nothing to do with the insurance company.”</p>

<p>Rich people usually have excellent insurance and OOP costs are usually minimal - especially for a hospitalization which are usually covered at 100%. </p>

<p>So tell me how they are being gouged? </p>

<p>I accumulated over $15K in medical costs in just four months over the winter. My total OOP cost was $385. </p>

[Flossy]

<p>Why is this so hard? Hospitals write off charges every day for people who cannot pay the bill. Meanwhile, people who can pay are expected to pay and people who can just pay a small amount per month are often allowed to do exactly that. It’s not new or unusual or even surprising. This has been going on for decades. If the insurance pays for everything then this is not an issue you have but there are people who find themselves with big hospital bills for a variety of reasons who are not uninsured.</p>

[3togo]

<p>

Blue, does fund raising take any particular amount of talent?

It’s a cake walk … which explains why all the colleges are rolling in doe … offering to meet all need at even lower than FAFSA EFC levels … and providing huge merit to tons of students. It’s also why all the charities, non-profits, high-schools teams and bands, are flush with money. It’s great is’t so easy and everyone is flush with money because now I never get calls during dinner, no solicitations, and no requests from kids/friends/neighbors/Cobrat’s cousins/strangers to support every event occurring in Eastern Mass. Yup it’s a cake walk.</p>

<p>Seriously, I’ve been involved in two major fund raising efforts for youth sports initiatives and it was very interesting. There are effective strategies but it was a tough go … everyone is getting hit on by zillions of folks for dollars. So we essentially had to clear 2 hurdles … first, convince people to donate … and second, to make that donation to us and not one of the zillion other causes. The first campaign was a lot of work bit succeeded in a relatively short amount of time … when we had our second campaign <em>5</em> years after the first one it was a much tougher go … a lot of our donors still felt fatigue from the first campaign 5 years earlier. It has to be very tough for organizations dependent on year-to-year increases in donation bases requiring a huge percentage of repeat donors and also acquiring new donors.</p>

<p>Just sticking to colleges … these are the connections related to college from which we (parents and kids) receive donations requests at least occasionally. (some are the same school repeated but a different connection)</p>

<p>Mom3ToGo = undergrad school #1
Mom3ToGo = undergrad school #2
Mom3ToGo = grad school
Mom3ToGo = school at which she teaches</p>

<h2>Mom3ToGo = school at which her father was emeritus</h2>

<p>3ToGo = undergrad school
3ToGo = grad school #1</p>

<h2>3ToGo = grad school #2</h2>

<p>Both parents = FirstToGo’s undergraduate school<br>
(this is the only school anyone has finished … I’m sure this list will grow … actually it has
Both parents = FirstToGo’s grad school … and she hasn’t even started yet
Both parents = SecondToGo’s undergrad school #1</p>

<h2>Both parents = SecondToGo’s undergrad school #2</h2>

<p>FirstToGo = undergraduate school
FirstToGo = grad school
FirstToGo = study abroad school
FirstToGo = school at which she took <em>1</em> summer course</p>

<h2>FirstToGo = travel program for college students in which she participated</h2>

<p>SecondToGo = undergrad school #1
SecondToGo = undergrad school #2</p>

<h2>(SecondToGo is still an undergrad and just finished study abroad … so this list will grow)</h2>

<p>(ThirdToGo is still in high school)</p>

<p>In our house we have almost 20 fund raising efforts just for college related things chasing our dollars … and we’re far from 1%ers … we a basic doughnut hole family. Yea … it’s a cake walk for the fundraisers.</p>

[sorghum]

<p>

It’s a cake walk … which explains why all the colleges are rolling in doe …

</p>

<p>Then why are they all so deer?</p>

[Pizzagirl]

<p>“The only thing that gives me heartburn is why taxpayers have to subside these fabulously-endowed schools w free property taxes to maintain these schools’ extensive acreage footprint. Schools with endowments of tens of billions of dollars (i.e. trust funds w schools) should pay their fair share of funding the local services they use, like the fire dept, the sewerage system, the streetlights, paving potholes, etc…”</p>

<p>They also bring in business to the local community though; they bring in jobs; and they can raise the value of living in an area. They may be bringing in far more such that the cost of the sewage system, utilities, etc are small potatoes. </p>

[coase]

<p>

It’s a cake walk … which explains why all the colleges are rolling in doe …

</p>

<p>

Then why are they all so deer?

</p>

<p>Well played. </p>

<p>Let me also add that fundraising is not simple. My institution’s president cultivated one relationship slowly and after a few years reaped a $100M gift. Getting the potential donor to consider a major gift, and then getting him to increase the size of the gift (as happened in this case), can be painstaking work that requires a range of skills. Even if some donors simply show up with a check, most others do not, and it is the latter who make the president earn his money. If one president would raise $750M in a five-year capital campaign, and another would raise $765M, that extra $15M covers the latter’s cumulative salary three times over. He or she is worth it. </p>

<p>Finally, let me note that price discrimination, exclusive dealing and other practices mentioned here need not be anti-competitive. That is why almost every practice other than collusion (which is per se illegal) is subject to rule of reason scrutiny according to the anti-trust laws. </p>

[bluebayou]

<p>

Schools with endowments of tens of billions of dollars (i.e. trust funds w schools) should pay their fair share of funding the local services they use, like the fire dept, the sewerage system, the streetlights, paving potholes, etc…"

</p>

<p>IMO, that’s a canard since a college doesn’t tend to use much of the fire department or the streetlights or create potholes. Indeed, they even tend to their own, including having their own police/security. But don’t forget that the college is a HUGE employer of local residents (who drive over the streets creating the potholes) but are also well paid, particularly on the lower end, and thus pay more in taxes while using fewer city services.</p>

[GMTplus7]

<p>

that’s a canard since a college doesn’t tend to use much of the fire department or the streetlights or create potholes. Indeed, they even tend to their own, including having their own police/security.

</p>

<p>By the same token, one could argue that private homes with security fences, fire sprinkler systems, paved driveways & porch lights have their own services</p>

[Pizzagirl]

<p>This is all a “it depends” on the college and community. </p>

[dustypig]

<p>I have no idea whether those salaries are justified, though I would bet that the folks at the top of that list are under a lot of pressure to justify those salaries. The comment on how the president of Marist increased the endowment from $42M to $211 M in one year is a case in point. I’m pretty sure Marist’s board of trustees, or whoever it is that’s responsible for hiring the pres, thinks they got their money’s worth with that guy. On the other hand, if Robert Zimmer at U of C doesn’t do whatever they’re paying him $3.3M to do, he’ll get the boot and they’ll lure someone away from another school who would be glad to accept 1/3 of what Zimmer is getting.</p>

<p>I also think that it must be a different job to be pres of a small school with a small campus than to be pres of, say, Stanford. Stanford is practically a city in terms of size (it has its own zip code) and the administration has to deal with all kinds of land use issues etc. Yes, the details of those things are delegated, but it’s still a more complex job than being the pres of a school that only owns a few city blocks of buildings.</p>