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Bonuses and Furloughs

February 29, 2012

Charging “moral turpitude,” leaders of the Howard University Faculty Senate are protesting more than $1.1 million in bonuses paid to high-level officials as the university moved forward with controversial program eliminations. Adding to the anger: news of the bonuses has surfaced just as Howard is enacting large tuition hikes and considering furloughs.

The chair, vice chair and secretary of the faculty senate expressed “outrage” and “great disappointment” over those bonuses in a Feb. 16 letter to Sidney Ribeau, Howard's president, and Addison Barry Rand, chairman of the board of trustees. A Howard spokeswoman declined to make Ribeau or other senior administrators available for comment Tuesday, citing scheduling, but both released short statements defending the bonuses.

Ranging in size from $97,006 to $522,184, the bonuses were awarded in 2010 and disclosed on the private university’s most recent Form 990 filing with the Internal Revenue Service. The three largest bonuses were negotiated in 2007 – on the recommendation of “an independent compensation consultant,” the college explained on its IRS form – just before Ribeau’s hiring. No such bonuses were awarded in 2009.

Hassan Minor, senior vice president for strategic planning and external affairs, received the largest bonus. Minor’s total compensation that year was $836,788 -- almost $115,000 more than Ribeau, who did not receive a bonus. Artis Hampshire-Cowan, senior vice president and secretary, received a $302,820 bonus in addition to her $213,552 base salary. Norma Leftwich, general counsel, was awarded $224,050 in addition to her $252,930 base salary. Wayne Frederick, now interim deputy provost for health sciences and then director of the cancer center at the university hospital, received a $97,006 bonus on top of his $586,335 base salary. Frederick’s total compensation was also higher than Ribeau’s, though his bonus was negotiated separately from the others.

While those awards might raise eyebrows in even the sunniest budget years, the fact they came just before the college slashed its degree offerings and announced a 12 percent undergraduate tuition hike.

Just three days before the faculty senate leaders sent their letter, Ribeau wrote an open letter to the university community saying the university’s expenses exceeded its revenues during the first half of the fiscal year. He outlined several steps to save money, including closing buildings over spring break. Ribeau also called for the consideration of furloughs for faculty and staff members, including administrators. Senior administrators would be asked to take the most furlough days, he wrote.

But in their letter, the faculty senate leaders questioned why furloughs were being considered so soon after the university gave some administrators bonuses that in 2010 that in some cases doubled their income that year. “The bonus compensation … is viewed overwhelmingly by faculty to be an affront to the integrity of the university and a slap in the face to the entire faculty who have been laboring under salary compression for a number years,” the senate leaders wrote.

“We find this to be morally repugnant for the university to award very large sums of additional university monies when our endowment, our federal subsidy and the university’s operating budget have decreased significantly.”

Rand said in a statement released to Inside Higher Ed that the bonuses were necessary "to ensure the continuity of senior leadership in critical areas and mitigate any potential risks for the university."

The senate leaders asked Ribeau and Rand to disclose more information about the independent consultant who recommended the bonuses, explain why the university budget committee wasn’t consulted in regards to the recent shortfall and stop considering faculty furloughs as an austerity measure.

Ribeau, who was hired in 2008, replied to those concerns in his statement:  "Amid the new realities facing similar institutions," he wrote, "Howard University continues to be very thoughtful and deliberate about its short and long term strategic needs. We will continue to set the standard for leadership when it comes to balancing the needs of acquiring and keeping top talent while being fiscally prudent."

Raymond D. Cotton, a Washington lawyer who specializes in presidential contracts, said the incentives Howard offered -- often called “stay bonuses” – help keep top administrative talent at universities during transitions. While the value of the bonuses at Howard struck Cotton as perhaps somewhat high, Cotton recommends such stay bonuses to his own clients. Howard is not one of Cotton’s clients.

“One has to be careful not to overspend on them,” he said, “but they have to be high enough to convince highly thought-of people to stay.

“You could then argue that they were successful. [Ribeau] has had several years to evaluate these people and he’s decided to keep them.”

When considering whether the bonuses were effective, he said, one must take into account the potential problems if several high-level administrators left just as the new president took office.

“The last thing you want is for the president to come in and see a whole bunch of empty offices,” he said.

But others question the investment. Sen. Chuck Grassley has long been critical of high administrator salaries at institutions where tuition is rising. A planned 12-percent undergraduate tuition hike for this fall leaves the Iowa Republican and Senate finance committee member skeptical. Grassley said the fact Howard receives about $200 million each year in special federal aid – a contribution dating back to the early days of the historically black university – should encourage administrators to be especially open about funding.

“The university’s board of trustees is responsible for reconciling big bonuses for executives with a big tuition increase,” the senator said in a statement released to Inside Higher Ed. “A 12 percent tuition increase in one year is a steep jump. The university needs to explain how all of this fulfills its charitable mission of educating students. That’s especially true for a university that receives special federal aid from the taxpayers.”

Cotton’s assessment is more forgiving. The contracts were agreed to in 2007 and the bonuses were paid in 2010. To scrutinize them in the context of budget problems in 2012 is unfair. “It’s an accident of timing,” he said.

The faculty senate leaders don’t see it that way. They question why the bonuses were promised before Ribeau was hired, and lament the fact administrators are receiving incentives while faculty salaries remain largely stagnant.

“Given the timing of such bonuses during a transition in leadership, these actions appear … disingenuous and opportunistic," they wrote. “To be sure, it is a dark and shameful time at Howard University.”

 

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