Administration November 5, 2009

Wall Street Execs not the Only Ones Facing Pay Scrutiny

November 5, 2009 (PLANSPONSOR.com) - While compensation for presidents at private colleges and universities cannot compare to that for Wall Street executives, information from the Chronicle of Higher Education has some questioning its fairness.
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AOL’s SPHERE news site reports the median compensation for presidents increased 15.5% from the previous year to $358,746 in 2007-2008, with 23 presidents making more than $1 million a year, according to the Chronicle’s survey of 419 private colleges and universities. At the top of the list was Shirley Ann Jackson, president of Rensselaer Polytechnic Institute, whose compensation in 2008 was $1,598,247.

Amid the backlash from parents over ever-rising tuition costs, experts suggest these paychecks come with even higher expectations than from allegedly overpaid corporate chiefs.

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In defense of most paychecks, Henry M. Levin, professor of economics and education at Columbia University’s Teachers College, said the position is a challenge as it requires balancing the needs of different intertwining interests, from faculty, students and alumni to donors and the government, and “that the demands are so unique that very few CEOs could succeed as university presidents.”

He said the pay packages to take note of are the ones where a school’s prestige doesn’t match the president’s paycheck. “The surprises are that presidents with far, far more prestige, far more responsibility, far more complexity in their jobs are getting less than the presidents of institutions you’ve never heard of,” he said, according to the news report.

Following Rensselaer President Jackson on the pay scale for 2008 is David J. Sargent of Suffolk University in Boston, who made $1,496,593, and Steadman Upham of the University of Tulsa, who made $1,485,275. In comparison, Drew Gilpin Faust, president of Harvard University, was paid $693,739, and John L. Hennessy of Stanford University received $731,614.


The SPHERE pointed out that compared with chief executives of public companies, even a $1 million paycheck is not staggering. Michelle Cooper, president of the Institute for Higher Education Policy, cautions against taking the survey out of context, pointing to the fact that 23 schools with highly paid presidents out of thousands countrywide is not a large percentage.

The Chronicle’s data can be obtained here .

Compliance November 4, 2009

House Panel Passes Investor Protection Act

November 4, 2009 (PLANSPONSOR.com) - A U.S. House committee on Wednesday approved the Investor Protection Act, which backers say will strengthen the powers of the Securities and Exchange Commission (SEC) in regulating the financial markets.
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A news release from the House Financial Services Committee said the vote on H.R. 3817, sponsored by Representative Paul E. Kanjorski (D-Pennsylvania), was 41 to 28. Kanjorski is chairman of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.

Among the bill’s provisions is what the news release called a “harmonized standard” for fiduciary responsibilities of broker-dealers and investment advisers. The bill also doubles the SEC’s funding over five years and provides new enforcement power and regulatory authority.

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The measure fixes what backers say are holes in the Securities Investor Protection Act, which returns money to customers of insolvent fraudulent broker-dealers, and the Public Company Accounting Oversight Board (PCAOB). The PCAOB has lacked the powers it needed to examine the auditors of broker-dealers, according to the announcement.

“In order to maintain a sound economy, we must improve investor protection and confidence,” said Kanjorski, in the announcement. “The Investor Protection Act aims to achieve these goals while also improving enforcement powers at the U.S. Securities and Exchange Commission and implementing a fiduciary standard for broker-dealers and investment advisers to ensure that customers’ interests are at the forefront of investment recommendations.”

The bill also provides a “bounty program” to create incentives for whistleblowers to identify wrongdoing in the securities markets and ends mandatory arbitration requirements for defrauded investors seeking redress.

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