From the issue dated November 24, 2000
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For Some Presidents, Large Salaries Don't End With Retirement
By JULIE L. NICKLIN
In the early 1990's, Joseph H. Hagan, president of Assumption College, told his board that after more than a decade in office, he was considering moving to another college.
He received his second payment in fiscal 2000 -- the same year that he became the president of Roger Williams University, and began to draw a salary there. That development quickly raised the same questions that outsiders and officials at other colleges have been asking more and more: What roles should retired presidents play, and what financial rewards should be bestowed on them? Like Assumption, many colleges ask their retired leaders to stick around, endowing them with emeritus status -- and, at times, a paycheck that is heftier than that of the sitting president. Mr. Hagan, for example, also earned sabbatical pay in 1998-99, helping to bring his total compensation to $219,319, more than twice as much as Assumption's president, Thomas Plough, who took home $101,574. In some cases, emeritus presidents, like Mr. Hagan, don't have many official duties other than ceremonial appearances and occasional fund raising. In other cases, the officials, like John R. Silber, Boston University's former president and current chancellor, still play active roles at their universities. But trustees, college officials, and recruiting consultants all agree that an institution has to be careful about how it structures a retired president's role. Otherwise, it runs two major risks: It may end up paying a lot of money to an official who doesn't do much for the campus, or it may create a situation where it's unclear who is really in charge. "The president emeritus or chancellor can be terribly useful to an institution, but it has to be clear who the chief executive officer is," says Chuck Knapp, the partner in charge of higher education at Heidrick & Struggles, an executive-search firm. He was president of the University of Georgia from 1987 to 1997. Critics often cite the arrangement at Boston University. "I always assumed the former president" -- Mr. Silber -- "wanted to keep his hand in the institution, and was really still running it," says Ernst Benjamin, director of research for the American Association of University Professors. Indeed, Mr. Silber appears to be an active leader. He has an office on the campus and comes in virtually every day, unless he's on the road. And he concentrates on such key areas as fund raising, faculty recruitment, and academic affairs. But Kevin Carleton, a spokesman for the university, says that the separation of power is very clear between Mr. Silber, who retired in 1996 after 25 years as president to become chancellor, and his successor, Jon Westling, who has been at B.U. since 1974. Originally hired as a writer and historical consultant on a special project, Mr. Westling became an assistant to President Silber two years later, and subsequently served as provost. As president, Mr. Westling focuses more closely on the university's workings than Chancellor Silber does, according to Mr. Carleton. "The president is the chief executive officer, and he is in charge of the day-to-day operations," says Mr. Carleton. "There is a clear delineation, and both recognize and respect it. There is really nothing Machiavellian here. There is the appropriate role of the president. And John Silber knows that role, and if someone comes to him with an issue that should go to the president, he directs them to the president's office. And Jon Westling is not shy about wielding the power of the president." He might not be shy, but he does get a smaller paycheck. In 1998-99, Mr. Silber earned $814,956 ($650,000 in salary and $164,956 in benefits); Mr. Westling earned $434,257 ($385,000 in salary and $49,257 in benefits). Campus officials are quick to point out that Mr. Silber's salary that year included a $250,000 loan from 1983 that was forgiven because of his continuous service as chancellor through 1999. According to Mr. Carleton, Mr. Silber used the $250,000 primarily to pay graduate-school tuition and other expenses for his seven daughters. Mr. Carleton says that Mr. Silber's base salary is $400,000, and that it has remained at that level since 1994. A year earlier, Mr. Silber received a $300,000 bonus, bringing his total pay to $776,963, to recognize his outstanding leadership as president. In the early 1990's, Mr. Silber was the highest-paid president in The Chronicle's salary survey for three years running. Mr. Carleton declines to elaborate on why Mr. Silber's pay has stalled at $400,000, but notes that Mr. Westling's salary was merely $15,000 less and that his salary does increase each year. Mr. Silber's benefits include deferred compensation awarded under a program that the university ended in 1986, so Mr. Westling would not be eligible. Unlike at Boston, it is clear at Assumption that the president, Mr. Plough, is in charge, even though he made less than the president emeritus in fiscal 1999. Mr. Hagan, the president emeritus, did not have an office on the campus, and provided help or services only when asked -- which hasn't been often. Some outsiders question the wisdom of the board's decision to give Mr. Hagan $100,000 a year for 10 years. "In the abstract, it seems very strange, and a $1-million commitment seems very high," says Mr. Benjamin, of the professors' association. The Rev. John Franck, chairman of Assumption's Board of Trustees, says the decision was made before he joined the board, in 1996. The trustees had to honor the agreement when Mr. Hagan retired, in January 1998, at the age of 63, he says, but it is a "financial burden" for the college, which operates on a budget of about $45-million. The trustees, Father Franck says, must have just felt that they owed it to the president, who had turned around the struggling college after becoming its president, in 1978. "You can always say we could use that $1-million for something else, but then you would have to say, Would we be in this position if it weren't for him?" Despite taking on yet another college presidency -- and its salary -- Mr. Hagan doesn't have any qualms about getting paid by Assumption, noting that such a "severance package" is not uncommon. He says that after retiring, he had intended to teach and had sought a part-time position at Roger Williams. Instead, he was recruited by that college's then president, Anthony Santoro, to be senior vice president. In 1998-99, Roger Williams paid Mr. Hagan $94,000 in that position, according to the college's tax form. Add that to his compensation from Assumption, and he received $313,319 in that year. On January 1, 2000, Mr. Hagan became Roger Williams's president. He declines to disclose his salary, and tax documents covering the 1999-2000 year are not yet available. However, the former president, Mr. Santoro, who is now the campus's chancellor, made $159,000 in fiscal 1999. Mr. Hagan sees no problem with continuing to accept Assumption's payout: "It was recognition for what I did over and above what was ordinarily expected." And Father Franck says that while Mr. Hagan doesn't initiate contact with Assumption officials, he "has been fair when we reach out." In the next few years, they may call on him more often as they embark on a fund-raising campaign. "I can't really judge how valuable he's going to be," says Father Franck. "Was this an investment by the university? I don't know what was going on in the trustees' mind completely." So would he sign a similar agreement now? "I think I'd have to seriously seek counsel on the wisdom of the decision," says Father Franck.
http://chronicle.com Section: Money & Management Page: A28
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Copyright © 2000 by The Chronicle of Higher Education