Tuesday, March 8, 2016

Motley UC Stew

Accusations of errors and deception fly in CRISPR patent fight

"Which of these motley strategies the two sides will be allowed to pursue depends on"...

Comments and Op Ed highlights on UC's latest compensation scandals include:
A former state senator familiar with past issues writes:
"UC exec's moonlighting raises questions, criticism
He’s right. Her moonlighting does not serve students or taxpayers.

Still, it’s too little, too late. And it’s just too bad.

Assemblyman Jose Medina, D-Riverside, chairman of the Assembly’s Higher Education Committee, has joined the call for oversight hearings. Where’s the state Senate? Where’s the UC Board of Regents?

Katehi should resign. Quickly. And she should still donate the investment proceeds she earned off the backs of her students.

UC President Janet Napolitano, who, at $570,000 a year plus housing and car allowances, earns significantly more than President Obama, claimed she knew nothing about the moonlighting, quickly standing by Katehi’s side. That should trouble Californians. Who is minding the store at the highest echelons of California’s education system?

It has been 10 years since revelations that prompted UC to adopt policies to limit the number of corporate boards on which chancellors and senior management can sit. Nine chancellors received $1.5 million in cash compensation, as well as deferred compensation and other stock options for comparable moonlighting gigs from 2012-14.

UC executive compensation practices need scrutiny and reform. Clearly, the 2010 policies are either insufficient, or simply ignored. When former UC President Mark Yudof stepped down in 2014, he was given $500,000 to help “transition.” Yet, UC officials quickly plead poverty when asked to enroll more California students or better compensate their low-wage workers."

This posted at Inside Higher Ed:

a day ago
To the best of my knowledge, my colleague, Nancy Goldschmidt of OHSU, and I are the only individuals who have systematically studied university presidential service on the boards of publicly traded corporation. We have conducted three studies since the late 1990's, with the most recent having been funded by the Kauffman Foundation and completed in 2010.

Our findings over the years have been remarkably consistent. Of the approximately 135 universities in our studies--the top 100 universities as ranked by US News and World Reports and the top 100 universities in terms of research expenditures as ranked by NSF--a third of the presidents served on one ore more corporate boards.

In our most recent study, we found that 43 presidents served as a director of 73 publicly traded corporations. We collected data on 40 variables, including fees, retainers, stock ownership/options and other benefits. In addition, we were able to estimate the time devoted to each corporate board membership based on SEC filings--approximately 10-12 days per board membership.

We found that the total compensation paid to university presidents for service on corporate boards was $11 million for one years with the average compensation being just over $154,000 per membership. The median compensation was approximately $163,000 with 22 board memberships paying over $200,000 and 4 board membership paying over $300,000 per year.

We also looked at the committees on which presidents served. As a group, each of these 43 presidents served on an average of three committees with the audit and compensation committees being the most common. The likely reason for this is that federal regulations require all members of both these committees to be independent/outside directors. One interesting finding is that while at least two members of the audit committee must be certified as a "financial expert" no university president serving on the audit committee was so certified.

It is important to remember that our study was limited by our sample and by only focusing on presidents who serve on the boards of publicly traded corporations. In the course of our research, we have discovered that some presidents are now serving on other types of boards for which they received compensation. These include privately held companies and investment trusts.

As noted in this article, serving on a corporate board can be lucrative. In fact, in our 1998 study, we discovered one university president who had accrued $50 million in stock options. You read that number correctly. We've also found instances of presidents serving on as many as 5 corporate boards in one year and estimated that they spent over 60 days on board service. For some of the presidents in our study, their fees and stock grants/options come close to their university salary. At the very least, it raises a serious question about a conflict of commitment.

We've found only one instance where a president of a public university asked for an opinion of a state ethics commission regarding their board service. The commission found that the president could serve on the board but could not receive any compensation while president. To get around this, the corporation placed the director fees, stock grants and options in escrow until the president stepped down. They ultimately received everything. On the other extreme, we found only one president who voluntarily reduced their salary by the amount of their director's fees.

Over the years, I have been widely quoted on this subject. The most common question I'm asked is whether a president serving on a corporate board is primarily a benefit to the university or a private gain. I always answer the question in the context of public university presidents. These individuals are the most highly paid executives in any state--more than a governor, cabinet secretary or supreme court judge. (I emphasize executive in order to exclude coaches and some physicians at medical schools.) None of these other government officials are afforded the opportunity to serve on corporate boards. In fact, when elected or appointed to office, they have to resign from any corporate boards in order to avoid the appearance of any conflict. Yet, both the public and our elected officials seem to be untroubled by a university president serving on a corporate board. This is a topic that deserves much greater attention--especially as it relates to public university presidents.

A final comment as it relates to this article. One has to ask a question as to why a president of a university--especially a public university--would choose to join the board of a for-profit education firm. It is troubling to me that several current and former presidents have joined such boards in the past few years, especially in the context of the abuses in the industry. At the very least, this suggests their poor judgement and to faculty who have spent their careers dedicated to teaching, research and service it is further evidence that at least some of our leaders are more interested in personal gain than in strengthening our institutions. Perhaps this instance will serve as a reason to examine whether or not our presidents should serve on corporate boards.

Jim Finkelstein
Professor of Public Policy
George Mason University"

PS seem to recall Sheila Slaughter bringing this up in her talks

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