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The turnout for the October 7 faculty meeting was notable not only for its size but for the number of top administrators among the usual professorial crowd. Executive Vice President for Finance and Administration Beppie Huidekoper sat in the audience, as did Margaret Klawunn, vice president for campus life and student services. Senior Vice President for University Advancement Ron Vanden Dorpel ’72 AM stood at the back of the Salomon Center auditorium, and Provost David Kertzer ’69 was in his customary seat on stage with President Ruth Simmons. Other administrators were scattered throughout the crowd.

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Timothy Cook
Just a week earlier, Boston University had announced a hiring freeze and a moratorium on new construction projects. That same day news media had reported that the failing Wachovia Bank was limiting access to the $9.3 billion that nearly 1,000 colleges and universities had invested in the nonprofit CommonFund. The lockup threatened the schools’ ability to access huge amounts of cash; some were unable to meet their payrolls.

Long assumed to be relatively insulated from national and global economic swings, universities were clearly exposed to the credit and banking crisis ravaging the U.S. economy. Brown employees worried: Would the University be able to make payroll? Could it help the growing numbers of students whose parents were watching their savings disappear? And just how leveraged was Brown?

“Don’t be spooked by the headlines,” Simmons told the faculty, reassuring them that, among other things, “the payroll process is safe.” Since last spring, she said, Brown has been running risk-assessment models of different financial scenarios, and the University has been closely monitoring its liquidity, putting more assets into cash. “We’re in a good position to deal with this crisis,” she said. She noted that the endowment had earned 6.3 percent last year, making it among the top five or six performers in the country. But don’t expect it to make money this year, she warned.

Simmons told the faculty that the Corporation’s Budget and Finance and Investment committees had met jointly in New York City the previous week, when they had reaffirmed Brown’s commitment to the Plan for Academic Enrichment.

The falling market has hit donors hard, and some Campaign gifts may have to be “rescheduled,” Simmons said, acknowledging that difficult choices lie ahead. Still, she sounded sanguine that recent governance changes will make the process more equitable and transparent. “We’re not making decisions behind closed doors,” she said. “Brown’s principal purpose is to focus on its academic and research mission,” she stressed. “It’s important not to lose our focus.”

A top priority will be ensuring  that students can afford a Brown education. At the faculty meeting, Simmons underscored the University’s commitment to need-blind admission, and two weeks later the Corporation voted to increase the Campaign’s financial-aid endowment goal from $300 million to $400 million.

In an interview, Beppie Huidekoper pointed out that Brown had “expected an increase in families’ financial contributions this year, but that didn’t pan out.” Like the rest of the Ivy League and many other top universities, Brown now waives fees for most families earning less than $60,000. In addition, most students whose families earn less than $100,000 qualify to receive scholarships instead of loans. The past year has seen a huge increase in students’ need: The number of families qualifying for full aid has risen from 284 to 818, and the number of students exempted from loans has skyrocketed—from 143 to 1,479. Forty percent of Brown students receive financial aid, and, of those, 61 percent now qualify to graduate without student-loan debt. Brown’s aid budget has risen to $70 million; hence the new Campaign goal.

November 4, Simmons announced that a hiring “pause” will be in effect through January. Huidekoper said Brown will be extremely conservative about spending: “We aren’t going forward with any gift-funded projects until the money is in.” She predicted that the next wave of need will hit over Thanksgiving break, when families are faced with their December tuition bills. To ease the impact, Provost Kertzer announced that Brown will waive its usual requirement that accounts be paid up before students can enroll for second semester. (For specifics, go to http://financialaid.brown.edu.)

“We’re going to have a year where students are under enormous pressures,” Simmons told the faculty, stressing that students will need good counseling and support as they face a grim job market. “Act as a community should act,” she urged, “with concern.”





Comments (1)
12/26/08
 
Given the present global financial meltdown, and the uncovering of extraordinary malpractice as well as growing inequity between the top few percent of US earners and the declining middle class, it seems appropriate to reconsider whether CEOs (including those of our leading academic institutions) truly merit the inflated compensation packages they have realized since the Reagan years. A realignment of fiscal priorities seems appropriate. I speak as an alum, and probably like many, one who has seen their equity decline by perhaps 40% in the past 6 months. Indeed, my son's tax-advantaged ultra-conservative college fund has also realized a 40% fall in value since this summer. This makes me look carefully at how much of my remaining funds I am willing to see go toward the administration of the academy. 
 
I have no doubt Ruth Simmons is an accomplished president of Brown. This is in no way a criticism of her abilities or performance. Rather I suggest that the entire CLASS of CEOs, COOs, CTOs, CFOs, and Chiefs-in-general should be subjected to a salary review. Is President Simmons' job actually more difficult than, say, that of a soft money Professor at a leading research institution? Or, say, that of millions of less academically-endowed but now struggling middle class parents who, at the end of the day, pay her salary and that of other Brown administrators?  
 
The Gordon Gee lesson is that outrageous financial compensation does not lead to excellence in administration or leadership. It is an HONOR to be President of Brown, and surely one that does not require nearly 88% greater compensation than given to the President of the United States. Shame on all university presidents for accepting compensation now approaching (or in a few cases actually exceeding) 7 figures. I suggest that we cap the compensation of university presidents to a more reasonable level, perhaps $300,000 per annum. I do not accept that the self-reinforcing upward spiral of compensation is necessary to attract the best and brightest - there are many who could and would do a superb job for more realistic levels. Imagine, ten additional students could have a full scholarship were President Simmons to lead the way amongst the Ivy's and voluntarily reduce her salary to $300,000. 
 
This year I've held off on my annual donation to the Brown Annual Fund until such time as positive movement toward more realistic compensation for the President and other leading lights is, at the minimum, discussed and vigorously debated. For reasons of potential conflict of interest, I prefer to remain anonymous.
 
Anonymous '79

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