BY PAUL FAIN
Approximately one-third of college presidents serve on corporate boards. For their efforts as corporate directors, presidents get prestige and access to potential donors in the business world. They also receive cash fees and stock and stock-option awards. The table below lists the corporate-board positions held by the chief executives of the 40 public and private institutions with the largest operating budgets.
PUBLIC
Mark G. Yudof, U. of California system
Mary Sue Coleman, U. of Michigan system
Boards Company
1 Healthtronics Inc.
2 Johnson & Johnson
Meredith Corporation
Gene D. Block, U. of California at Los Angeles
E. Gordon Gee, Ohio State U.
0
4
Graham B. Spanier, Pennsylvania State U. system
1
Mark A. Emmert, U. of Washington
1
Gaylord Entertainment Co.
Hasbro Inc.
Limited Brands Inc.
Massey Energy Co.
Citizens Financial Group Inc. United States Steel Co.**
Expeditors International
of Washington Inc.**
Fees in cash
$52,000
95,000
10,000
0
66,750
62,021
60,000
113,000
N/A
0
0
Stock awards
$0
99,939
42,031
0
55,650
79,509
48,053
77,294
N/A
0
0
Option awards
$85,457
0
92,036
0
27,638
17,216
0
0
N/A
0
0
Other*
$0
7,692
0
0
0
0
0
2,661
N/A
0
0
J. Michael Bishop, U. of California at San Francisco
Larry N. Vanderhoef, U. of California at Davis
Robert H. Bruininks, U. of Minnesota-Twin Cities
Marye Anne Fox, U. of California at San Diego
0
0
0
4
Boston Scientific Co.
Pharmaceutical Product Development Inc. Red Hat Inc.
W.R. Grace & Co.
0
0
0
60,000
50,500
0
0
0
76,686
64,985
0
0
0
5,230
65,000
0
0
0
0
0
Michael K. Young, U. of Utah
Carolyn A. (Biddy) Martin, U. of Wisconsin at Madison
Ann Weaver Hart, Temple U.
H. Holden Thorp, U. of North Carolina at Chapel Hill
Sally K. Mason, U. of Iowa
John T. Casteen III, U. of Virginia
J. Bernard Machen, U. of Florida Eric A. Gislason†, U. of Illinois at Chicago
Richard Herman, U. of Illinois at Urbana-Champaign
Carol Z. Garrison, U. of Alabama at Birmingham
* Can include gifts to charities ** First year on board † Interim
0
0
0
0
0
1
0
0
0
0
Wachovia Corporation
54,334
117,000
0
0
0
0
0
85,000
0
0
0
0
80,220
0
0
0
0
0
0
157,500
0
0
0
0
22,879
0
0
0
0
0
0
0
0
0
0
0
3,000
0
0
0
0
0
1,000
0
0
0
0
PRIVATE
Amy Gutmann, U. of Pennsylvania
Richard H. Brodhead, Duke U.
William R. Brody, Johns Hopkins U.
Drew Gilpin Faust, Harvard U.
John L. Hennessy, Stanford U.
Boards Company
1 The Vanguard Fund
0 1 IBM**
0
3
Atheros Communications Inc.
Cisco Systems Inc.
Google Inc.
James W. Wagner, Emory U.
Lee C. Bollinger, Columbia U.
Nicholas S. Zeppos, Vanderbilt U.
John E. Sexton, New York U.
Susan Hockfield, Massachusetts Institute of Technology
Jean-Lou Chameau, California Institute of Technology
Joel Seligman, U. of Rochester
Richard C. Levin, Yale U.
Robert J. Zimmer, U. of Chicago
Steven B. Sample, U. of Southern California
0
1
0
0
1
Washington Post Co.
University presidents are attractive candidates for corporate boards. Their credentials and their university’s name lend an air of academic prestige to the companies they oversee.
Presidents are typically well compensated for their service on board of directors, earning at least six figures each year in cash fees and stock awards. It can be a good gig, considering that most boards meet about a dozen times per year, with additional meetings for subcommittee members.
The role can pay off for universities as well, presidents say, through corporate partnerships and access to wealthy donors.
However, the benefits come at a price. Presidents already put in long hours in their day jobs, and board meetings are time away from work. As a result, some university governing boards have begun to restrict the corporate-board service of their presidents. And some higher-education experts recommend that college chiefs take on no more than two directorships.
According to a Chronicle analysis, 19 of the presidents of the 40 research universities with the largest operating budgets sit on at least one corporate board. Leaders of private universities are the most likely to serve on boards. And while most of the presidents hold just one or two director slots, three sit on four boards each. The compensation for such positions is usually $50,000 or more in cash fees, a similar amount in stock awards, and sometimes more in stock options.
James H. Finkelstein, a professor and vice dean at George Mason University’s School of Public Policy and an expert on corporate governance, says those findings are mostly consistent with what his research has found. However, he says, public-university presidents are more likely to serve on corporate boards than are their peers at private institutions.
Mr. Finkelstein and other governance experts say college presidents should be wary of corporate boards, in part because the stakes have gone up in the wake of the accounting scandals from earlier this decade. Subsequent federal legislation has given directors more responsibility as fiduciaries. They can be held accountable for management problems and could face fines after a corporate meltdown.
In the past, many boards existed solely to rubber-stamp the decisions of company executives, says Mr. Finkelstein. Not any more.
“You can’t just show up for a board meeting, have a nice dinner, and go home,” he says.
General Electric Co.
Fees in cash
$N/A
0
83,889
0
32,500
81,000
0
0
52,500
0
0
75,000
Stock awards
$N/A
0
0
0
0
142,055
0
0
0
0
0
149,241
Option awards
$N/A
0
0
0
94,078
113,836
432,334
0
0
0
0
0
Other*
$145,000
0
154
0
0
0
0
0
0
0
0
7,699
1
0
1
0
4
MTS Systems Corp.
American Express Co.
Mark S. Wrighton, Washington U.
2
AMCAP Fund Inc.
American Mutual Fund Inc.
Intermec Inc.
Wm. Wrigley Jr. Co.
Cabot Corp.
Brooks Automation Inc.
David J. Skorton, Cornell U.
Donna E. Shalala, U. of Miami
0
2
Robert A. Brown, Boston U.
Henry S. Bienen, Northwestern U.
* Can include gifts to charities
Joined July 2007
† Left board April 2008
1
1
Gannett Co. Inc.
Lennar Corp.
DuPont Co.
Bear Stearns Cos. Inc.†
44,000
0
87,500
0
N/A
N/A
49,000
60,000
45,000
77,000
0
0
70,880
62,667
59,500
80,009
0
208,931
0
N/A
N/A
30,000
60,000
115,950
124,123
0
0
20,675
99,643
103,510
0
0
0
0
N/A
N/A
109,400
43,156
0
33,853
0
200,052
69,932
0
62,808
3,904
0
1,877
0
100,000
103,800
761
2,700
402
0
0
750
0
243,073
0
SOURCE: Corporate reports to the Securities and Exchange Commission
COS T-BENEfi T ANAL YSIS
In some cases, university search committees will use corporate boards as a lure for prospective presidents and other administrators. While higher-education insiders say this practice is fairly common, it is hard to prove, as the promises are made over handshakes rather than in contracts.
Nancy B. Rapoport, a professor of law who is a corporate-governance expert at the University of Nevada at Las Vegas, says this practice occurs regularly and that she experienced it firsthand. Although Ms. Rapoport, a former law-school dean, never served on a corporate board, she says she was offered director spots by search committees when she was considering dean positions.
A seat on even one corporate board brings risks. For example, two university presidents were directors of Bear Stearns, the collapsed investment bank. The firm’s failure in March has led to some of the first repercussions over the credit crisis, includ-
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