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Ali: Presidential Parachutes

08/16/11 5:55PM By Saleem Ali
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(HOST) Commentator and UVM Professor Saleem Ali has been thinking about the broader implications of the controversy regarding pay-scales for university executives in Vermont.

(ALI) I have called Vermont home for almost a decade thanks to my employment at UVM, which started the same year as Dan Fogel became president of the university. Having observed the transformation of the university during this period, I must say that his departure amidst an unfortunate series of events beyond his control saddens me greatly. What I find most troubling is the cynicism about academia that is resonating with many young people in the state and beyond. We already have a national culture where President Obama has to constantly be on guard to not sound like a “professor.” So I’d like to unpack the issues and dispense with the eye-rolling and anti-intellectual slander of the academy.

A lucrative “golden parachute” of one year paid leave of around $400,000 was provided to Dan Fogel following his unexpected resignation this summer after 9 years of uninterrupted service. Paid leave is not unusual by any means in academia, nor are higher pay rates for senior management. Accusations in the media that UVM is being run like a private corporation are quite unwarranted. If you want a comparison with a corporate CEO, recall that former Disney corporation president Michael Ovitz was given a severance package of $38 million in cash and $131 million in stock options when he was fired after only 2 years on the job in 1997. Fogel’s parachute package is about 1% of this, and one would argue that managing a university can be far more challenging than running a corporation because of a culture of greater dissent and job security within the academy.

So beyond the rhetoric, here’s what I see as the core issue. Income inequality is indeed a very troubling social problem which transcends UVM, and the university should not be blamed for what is a systemic malaise in American employment culture. If we are troubled by inequality in compensation, we need to first focus on corporate compensation, which has in fact also led to inflated salaries in academia. Many university administrators could be competing for corporate executive salaries, and hence universities have little choice but to raise their salary levels.

This is the same reason why an assistant professor with a doctorate in sociology would be paid twice the salary in a business school to teach organizational behavior - as opposed to the same course in a liberal arts sociology department. Even more galling are the huge salaries for foundation presidents who are supposed to be running philanthropies. Reform of corporate compensation packages that Congress initiated must be revisited. In the meantime, we need to have a more measured and less personalized response to executive packages at universities. Amidst all the titillating gossip, let us never forget the value of public universities as a beacon of learning and opportunity for generations to come.
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