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Thursday, Mar 23, 2023

Faculty Demand Answers on Executive Pay

The Patton administration faced widespread outrage from professors regarding salary practices for top officials at a faculty meeting on April 6. The faculty railed against bonuses and mismanagement, as well as payouts during the Liebowitz administration, which ended in 2015.

President Laurie L. Patton discussed executive pay during her routine report to the faculty and emphasized that she is committed to using fewer stay bonuses of smaller amounts. Stay bonuses were a main point of criticism in physics professor Noah Graham’s op-ed, “Executive Pay and Why It Matters,” published in the March 15 issue of The Campus. 

“I’m still interested in maintaining a very modest use of these bonuses because they are used in higher ed to prevent a kind of constant searching and turning over,” Patton said. “But as you saw from the data, my interest and commitment to them is very modest. They are one tool among many, and I am committed to moving to most of those other tools before we do that.”

Though Patton was unable to stay after concluding her presentation, Provost gave a more in-depth presentation on the subject later in the meeting. Provost provided specifics regarding previously-issued retention bonuses. 

“Since 2009, there were 11 different retention bonuses involving seven different administrators, ranging in annual amounts from $50,000 to $100,000. Those yielded pay outs anywhere from $100,000 to $500,000,” Provost said. 

“Today there are three retention bonuses that range in the $40,000 to $50,000 range, with total expected payouts of $150,000 to $250,000” he added. 

Cason, who presented alongside Provost, told the faculty that he was one of the three remaining employees with a retention bonus. 

“This was offered to me in Laurie’s first year when I was interviewing for another presidency,” Cason said. “I’m just putting that out there, that’s just a fact. If I had understood how this was going to go on, I might have asked for a different kind of compensation at the time. I didn’t ask for [a stay bonus], so I’ll say that.” 

Provost argued that stay bonuses are effective, given that they have resulted in faculty recipients remaining at the college for the duration of their bonus’ payout. Faculty had additional questions regarding the purpose of stay bonuses, however. 

“Any of the previous 11 that were put in place in all cases achieved their anniversary date,” Provost said. “Yes, they worked from the standpoint of keeping that person here.”

Jason Mittell, a film professor, argued that some of the faculty who remained at Middlebury due to stay bonuses actually harmed the college.

“People were highly compensated at the exact same time that they were making financially irresponsible decisions at the college, which then they had left for Laurie and David to correct,” Mittell said. “What type of accountability has the board of trustees talked about for this? It’s the fault of people who made a lot of money from us while spending a lot of our money and mortgaging our future. . . . How do we make sure most importantly, that this never happens again?”

Erik Bleich, professor of political science, argued that stay bonuses actually encourage administrators to leave once they receive their full bonus.  

“If I put myself in the position of someone who’s about to get a $500,000 pay out and then look the next year at the measly salary of $240,000, it’s an incentive to leave, an incentive to leverage that moment to exit,” Bleich said.

Earlier in his presentation, Provost stated that he had in fact been the recipient of a retention bonus at Champlain College, where he worked before coming to Middlebury. 

“I had one previously at Champlain during the last presidential transition,” Provost said. “I had played a very active role in the transformation of Champlain, so they tied my hands for four years knowing they wanted me there. That had expired this past June, so when I started a conversation with Laurie, that wasn’t hanging over my head.” 

In outlining potential reforms to the current executive pay system, Patton said that she and Provost were open to the idea of formulating stay bonuses in accordance with employees’ individual performance. She also said she was committed to maintaining the costs of and reducing the size of the Senior Leadership Group (SLG), citing that the costs of the SLG were already $30,000 less than they were last year. 

Patton said that the college had decided not to award any employee making over $200,000 a raise last year, and shared information regarding her own salary, emphasizing that her take home pay is even less than that listed on the 990 tax form where the college reports executive pay. 

“I do not have a retention bonus and my salary is $575,000,” Patton said. “I tied in scholarships and in fact I just finished my taxes, and with all the other charitable deductions I actually make about three-fifths of that. I am happy to share anything more about my own finances if you’d like to talk.”

Patton also reiterated her commitment to paying administrators in accordance with a “market rate.” 

“To ask anyone to do these really tough jobs, tougher than they’ve ever been, and not pay market rate for folks to do these jobs doesn’t seem fair to either the candidates or to Middlebury,” Patton said. 

Provost explained that the college decides on executive compensation by reviewing market information and by analyzing peer institutions. Patton then recommends executive compensation to the compensation committee, which is made up of the board chair, vice chair, resource committee chair and one additional board member. The compensation committee then approves the President’s recommendations. 

Provost’s presentation compared peer institutions’ executive pay to Middlebury’s. The college’s total executive pay of $4.1 million dollars was higher than the $3.6 million average of its peer institutions. 

Rick Bunt, a chemistry professor, argued that this gap of 14 percent between the peer group average suggested that the compensation committee did not actually base executive pay off of a “market value.”

“These institutions, Williams, Amherst, all have endowments at least twice our size,” Bunt said.  “So our compensation for our top executives is supposed to be market driven, but its 14 percent above average.”

Bunt argued that this is unfair to faculty and staff, given their comparative wages. 

“I’m pretty sure our faculty compensation is not 14 percent above average, and I’m really, really sure that our staff compensation is not 14 percent above average,” Bunt said. “We’re committed to paying market rate for our executives for running the school, why shouldn’t we pay market rate to the staff and faculty who actually do the hard work of educating the students?”

Provost explained that the stay bonuses, which will apparently continue to decline in number and value, were responsible for this 14 percent difference. 

While Provost revealed that the college does not review staff compensation in the context of a such a “market rate” every year, he said that he and Patton hope to establish faculty compensation at an above average rate compared to their peers. He also said that most college staff actually earn above average wages. 

“Laurie is not trying to pay the executives here differently than the faculty or the staff. That is not a goal,” Provost said. “It is our intention to pay our faculty at above market median. On the staff compensation, we are for the most part above the median, there are a few exceptions. We’ve been working with human resources to conduct a compensation study that will address that.” 

Provost said that he hoped sharing the 990 tax forms with faculty sooner would help increase transparency. 

“I don’t want to speak especially for the past board,” Provost said. “The folks on the resource committee are in that way of thinking, of saying if we see a 990 two years after the fact, that’s not prevention, that’s not awareness of what’s going on, so why aren’t we communicating these in real time when that’s happening? And you heard Laurie say she’s open to that conversation. So if that was in place that would help prevent it before it’s old news.”

Provost also announced that former President Ronald Liebowitz received a sizeable payout, the quantity of which will be released in early May with the disclosure of the FY ’17 990. 

In their questions for Provost, faculty members criticized the conduct of past and present administrators, as well as some of the potential methods they feared the college would take to save money in the future. 

Susan Burch, a professor of American studies, said that Provost and Cason brought up adjusting healthcare plans in their meeting with faculty earlier in the week. 

“I’m very concerned to hear that [health care] might be leveraged. Please don’t do that,” she said.

While Provost said that he believes the college spends too much on healthcare, he clarified that they have delayed the decision on changing healthcare another year at the earliest due to employee concerns.

“Our existing health benefits at $25,000 a family, it’s too much, we’re going to spend $422,000 this year on massage therapy,” Provost said. “You as faculty have to come to the table and say this isn’t about destroying people’s healthcare. I couldn’t agree with you more. My concern is we can’t even have the conversation because that is what is inferred. I don’t like that we’re paying $25,000 per family, it’s probably not worth it, but I hope we can find common ground on some things we should talk about.” 

Though Provost had no control over the order of the meeting agenda, history professor Rebecca Bennette expressed frustration that Provost’s presentation was the final one in a nearly four-hour long meeting. 

“I’m deeply disturbed that you basically waited us out until almost everyone left and Laurie’s not even here to be here for this conversation. This should have been first,” Bennette said. 

John Schmitt, a professor of mathematics, defended Provost and encouraged faculty to view him as an ally. 

“I’ve been working with David since September and we have an opportunity here that didn’t exist under the previous administration,” Schmitt said. “David is looking to empower us to make good decisions about our future. We’re not going to get Ron’s payment back. And I’m hopeful that we see David as an ally.” 

However, faculty continued to voice criticisms. Tamar Mayer, a geography professor, suggested selling the Middlebury Institute at Monterey in order to save money, to which several faculty voiced support.

Provost replied that though this might not be off-limits, it is not a simple fix to the college’s financial problems, and there are reasons to keep the Institute.

“The spirit of my approach is that I want everything on the table,” Provost said. “But if we’re serious about a conversation about things we want to explore, for me we’re the only one of those peer institutions up there that has a physical campus in the backyard of Silicon Valley. We have not leveraged a resource that we decided to invest in and it sits out there.”

Erik Bleich, professor of political science, issued Provost a warning.

“The decisions that have been made in the past, and some of the current administrators were involved in those decisions, were a disaster,” Bleich said. “I want you all on warning. Don’t let this happen again.” 

Bennette argued that the current administration should begin to take more responsibility for the financial state of the college. 

“We’re three years into this presidency now. And I’m not saying this was the greatest inheritance to come in to as a president. But you can play a hand of cards good or you can play it poorly, and I think a lot of people think it was not played that well.” 

Provost urged faculty to view the college’s financial problems as more complex than a simple issue of executive overcompensation, and to recognize some of the positive conditions at the college.

“If we think Middlebury’s financial difficulties are caused by executive compensation, we won’t solve our problems,” Provost said. “Is there some responsibility there? Absolutely. But we are a very privileged organization. We have a lot of employees. We pay people well. Our benefits are off the charts. And if we aren’t willing to put everything on the table, we aren’t going to solve these problems.”