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Culture of big bonuses permeates Ohio State administration

April 15, 2014

essig.21@osu.edu
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At a university as large as Ohio State — with 43,630 employees — one might expect equally large paychecks to go to the institution’s top officials.

After all, OSU has a total endowment of $3.149 billion and had an annual payroll for all employees of $2.237 billion in 2012-13.

In 2012, then-President E. Gordon Gee said he didn’t apologize for large bonuses and paychecks to university employees.

“I’m not sorry, I feel very strongly that everyone at this institution should be paid well and right and should be paid according to how well they perform,” Gee told The Lantern in April 2012. “We ought to take great pride in the fact that we have people performing at a very high level.”

Even after his retirement, it seems that line of thinking is still woven into the university’s operations.

Of 18 senior administrators, all earned a salary of more than $120,000 in 2013, and eight had a salary of more than $400,000. With bonuses and other compensation, many made even more.

Twelve of the administrators earned a bonus in 2013. These ranged from $19,099 to $1,460,703, paid to Vice President for Student Life Javaune Adams-Gaston and Gee, respectively.

The Lantern requested 18 OSU senior administrators’ performance reviews for 2012 and 2013. Eight of the 18 administrators did not have performance reviews available for 2013, and at least two who were employed at the time did not have reviews available for 2012.

According to an OSU human resources performance review policy, “all employees must receive a performance review at least once a year.”

University spokesman Gary Lewis said he would be responding to all questions about the performance reviews. He provided a human resources document Tuesday with additional information on the distribution of bonuses for some administrators who did not receive written reviews.

 

Breaking down bonuses

Under OSU’s Performance and Retention Plan, not all bonuses are paid out in full immediately. Instead, 50 percent is paid in the following fiscal year and 50 percent is deferred until the employee’s contract term has expired.

Therefore, an employee might receive money in one year that is actually the culmination of past bonuses. On another note, if an employee leaves the university before their term is up, or breaks their contract, the deferred money goes back to the university.

While additional payments might be noted as bonuses, some are to fulfill the terms of an employee’s contract.

Monday, The Lantern reported on bonuses for some employees who did not receive written performance reviews in the year they received bonuses. Tuesday, Lewis provided The Lantern with a document with more information on bonuses for several administrators, including Senior Vice President, General Counsel and Senior Adviser to the President Christopher Culley.

Culley received an additional $691,119 on top of his $555,500 salary in 2013.

This additional payment consisted of a bonus from 2012, as well as distributions from his Performance and Retention Plan and deferred compensation account, as his contract term ended in October 2013.

 

Performance review logistics

While not all administrators had written performance reviews on file, Lewis said performance management, and the assurance that employees are reviewed yearly, go beyond the written review.

“Although it is required for all employees to receive reviews, performance management at Ohio State also involves a continuous process of feedback and mentoring, which includes verbal and written reviews,” Lewis said in an email Monday. “All elements of performance review, verbal and written, are key inputs in determining compensation.”

He said the performance review process was adjusted because the university is in a period of change.

“This year’s process for performance reviews of senior leaders was one in transition. Because every senior leader participates in the ongoing, annual review process, all leaders expect to receive helpful coaching and feedback.”

The Lantern requested the performance reviews and other records including travel budgets Jan. 23, and the request was filled March 24.

The performance reviews focus both on looking ahead and reflecting on past accomplishments of each reviewed personnel. This is the second article in a series of three, and keys in on six members of the administration.

 

Senior Vice President for Advancement Michael Eicher

Eicher earns $714,000 annually, and earned a $300,000 bonus in FY 2013. That bonus is set to be paid in two installments, allowing Eicher to pocket half in FY 2014 and deferring half until the end of his contract term.

The amount of Eicher’s bonus was determined per his employment contract, according to an HR document from Lewis.

Eicher joined the university Nov. 1, 2012, to oversee efforts involving fundraising, alumni relations and communications, as well as leading OSU’s $2.5 billion “But for Ohio State” campaign.

In Eicher’s performance review dated September 2013, Alutto said Eicher had spent his first months on campus “observing, building, understanding and laying the foundation.”

To further this, Alutto called on Eicher to continue focusing on developing his leadership team and planning for campaign management, along with some additional recommendations.

“Do not be shy to speak out on topics you are not an expert in or those that do not apply to Advancement,” Alutto wrote. “It is time for you to focus on integration with other senior leaders and this is a way to build those relationships.”

Alutto also said he has “not been impressed with the recent hires nor the quality of work” in the communication piece of Advancement, and his “expectation is that (Eicher) will continue to be involved with improving their performance.”

As he was hired in late 2012, Eicher did not receive a performance review in that year.

 

Wexner Medical Center CEO Dr. Steven Gabbe 

Gabbe was paid a $123,138 bonus in 2013, on top of his $861,492 annual salary. Gabbe earned that bonus in the previous year.

In FY 2013, Gabbe earned a $185,812 bonus, and is set to be paid half that amount in FY 2014, with the other half deferred until the end of his contract. That bonus equals about 22 percent of Gabbe’s base pay.

OSU announced in February that Gabbe intends to step down from his position as Wexner Medical Center CEO in December, or as soon as a replacement is named. He is slated to remain a senior vice president through June 2015, after which he will return to the faculty, according to an email to faculty and staff from Alutto.

Alutto commended Gabbe for exceeding his “Board-mandated financial targets” in several areas in his 2013 performance review.

“You and your team have been working diligently to bring the new hospital in on time and within the stated budget,” Alutto wrote. “Your leadership in these areas has been greatly appreciated.”

The new James Cancer Hospital and Solove Research Institute is set to open in December, according to the Medical Center website. The center is being built to accommodate a 21 percent increase in patient admissions over the next 10 years, with an emergency center that’s two-times larger and a planned 21 floors, which would make the hospital the 15th tallest in the United States.

Alutto told Gabbe to focus on two areas, but the details of the projects were redacted from the review. The details of the first project were completely unclear from the amount that was redacted, though the second point advised Gabbe to work on “strengthening (his) leadership team and its structure.”

“There appears to still be confusion about what each person is accountable for and how decisions are made. In times of change, employees will need clear leadership from the entire leadership team,” Alutto wrote.

Additional details were redacted.

Alutto noted Gabbe’s “inpatient satisfaction scores are very good” and he needs to continue moving forward.

“We will need you to continue to build on these successes so that we can be prepared for all the upcoming changes brought on by the ACA (Affordable Care Act) as well as those that will strengthen our ability to be profitable in the future,” Alutto wrote.

In the 2013-14 Best Hospitals ranking by U.S. News and World Report, the Wexner Medical Center was named the third best hospital in Ohio and the best in the Columbus metro area. It was also nationally ranked in the top 50 for 10 categories, and ranked above both the state and national average in patient satisfaction.

Gabbe’s 2012 review lauds him for recruiting Charles Lockwood as dean of the College of Medicine and other achievements. Lockwood is set to leave OSU for University of South Florida in May.

 

Senior Vice President for Alumni Relations and President/CEO of the OSU Alumni Association Archie Griffin

Griffin earns about $366,170 annually, and received a $89,748 bonus in FY 2013. Half of that bonus is set to be paid in FY 2014, and the other half is deferred until the end of Griffin’s contract.

In 2013, Griffin was paid $43,616 from bonuses earned in 2012.

A letter to Gee dated May 24, 2013, from Irene Bandy-Hedden, then-chairwoman of the Alumni Association Board of Directors, detailed the consensus of Griffin’s review from FY 2012-13.

Among other notes, Bandy-Hedden said the Board “unanimously” recommended raising Griffin’s wage “at a rate that is comparable to that planned for his university peers in this performance category,” as well as awarding a contribution to Griffin’s Performance and Retention Program.

She also recommended retaining Griffin in his role with the university and Alumni Association.

Goals for FY 2013-14 for Griffin included continued collaboration between the Alumni Association and Advancement, leading the restructure of the Annual Giving office, developing a centralized volunteer relations solution and continuing his cultivation of Alumni Association senior management.

There was 100 percent participation from the Board and 75 percent participation from the Advancement staff in completing Griffin’s review, according to Bandy-Hedden’s letter.

Notes mentioned Griffin has a “deep love of OSU” and “desire to pay back by paying forward,” he is “committed to excellence and demonstrates a high degree of integrity” and “leads by example.”

“There is no question regarding Archie’s integrity and ethics,” one note reads. “He is the guiding light for the organization and maintains the correct tone for the employees, directors and members to follow.”

In a letter detailing his FY 2011-12 review, the same recommendations about giving Griffin a raise, adding to his Performance and Retention Program and retaining him at the university were made.

 

Chief Information Officer Michael Hofherr

There was no written review available for Hofherr in 2013, though he was promoted and received a $33,966 bonus that year in addition to his annual salary of $173,232.

Hofherr took over as interim CIO in June 2013, following former CIO Kathy Starkoff’s resignation June 21. In March, Hofherr was named Starkoff’s permanent replacement.

Prior to moving into the interim role, Hofherr was named associate vice president for distance education and eLearning in 2012 after joining the university in 2011.

In his performance review dated June 2012, Starkoff noted some areas for improvement for Hofherr, including learning to manage his increased responsibility at OSU and to learn the differences in the culture and organization at OSU compared to Penn State, where he worked previously.

“Mike should share situations and actions plans with trusted advisers … to ensure that he stays keenly focused on cues within and around his organization, makes good choices to ensure his success and creates an environment of interest, performance and trust,” the review reads.

Furthermore, the overall review indicated Hofherr achieved four “above,” six “meets” and one “below” ratings as far as his performance expectations, though Starkoff mentions “his contributions to the organization in many ways speak much louder than this simple ranking.”

 

Professor of Comparative Studies and Secretary to the Board of Trustees David Horn

Horn earns $122,568 annually and was not eligible for a bonus in 2013. There were no 2012 or 2013 performance reviews available for him.

In a letter dated Aug. 31, 2012, then-Board Chairman Alexander Shumate gave Horn a raise, a 3 percent increase on the “full-time equivalent salary for (his) position.”

Horn became secretary to the Board of Trustees July 1, 2011, when his predecessor retired after nine years in the position.

As secretary, Horn coordinates and officiates the Board’s operations, serves as a liaison between the Board and university leaders, monitors the Board’s committees and helps shape meeting agendas.

Previously, Horn chaired the Department of Comparative Studies from 1999 until 2008.

 

Vice President for Research Caroline Whitacre

There were no 2012 or 2013 performance reviews available for Whitacre, although she did earn a $62,593 bonus in 2013. Whitacre’s annual salary is $390,166.

She was also paid $104,218 in October 2013 at the conclusion of her contract term.

Whitacre served as associate vice president for health sciences research and vice dean for research in the College of Medicine from 2001-08 before taking her current role within the Office of Research in August 2008. She has been with the university since 1981.

As vice president for research, Whitacre oversees the university’s new and ongoing research efforts. She is responsible for managing OSU’s annual $967 million basic and applied research program.

 

Looking ahead

OSU has experienced several changes in administrative roles, notably in the presidency. Gee retired from the role July 1, days after controversial comments he made at a Dec. 5, 2012, OSU Athletic Council meeting came under public scrutiny.

Gee’s departure left Alutto to take over as interim president while the university began its search for a permanent replacement. In January, Dr. Michael Drake, the current chancellor at the University of California Irvine, was named the next president.

As part of a series on the OSU administration, The Lantern is sorting through different aspects of what goes into running a university of OSU’s size and prominence.

This story is the second of three focusing on performance reviews of 18 senior administrators. The next segment will include reviews for Gee and Alutto, among others.

This story is the third in a series about Ohio State’s administrators, including travel expenses and performance reviews over the last two years. The series was made possible by the generosity of Ohio State and The Lantern alumna Patty Miller.

 

 

This story is the third in a series about Ohio State’s administrators, including travel expenses and performance reviews over the last two years. The series was made possible by the generosity of Ohio State and The Lantern alumna Patty Miller.

 

A look at some of OSU’s administrators:

 


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Comments (14)

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  1. Jerry Frey says:

    HARTFORD — Despite being paid $455,000 in 13 months, Connecticut’s former Board of Regents president charged taxpayers nearly $400 for gourmet coffee and a yearly subscription to Sirius XM radio so he could stay tuned-in while driving around in his free state car, among other perks.

    http://napoleonlive.info/politics/the-connected-class-con-2/

    It’s the culture of corruption and that’s the way they like it.

  2. Anonymous says:

    Good work if you can get it….

  3. Anonymous says:

    OSU is in competition with other highly-ranked institutions, all of which pay high salaries for staff and faculty. If OSU does not offer competitive pay, then they won’t be able to retain people–and they won’t be able to recruit top people either. If mediocrity is the goal, then by all means, cut salaries. Take a look at pay at other highly-ranked institutions–UCLA, UVA, Wisconsin…if OSU wants to compete at this level, then you gotta pay for talent.

  4. Anon at 9:13am wrote:

    “OSU is in competition with other highly-ranked institutions, all of which pay high salaries for staff and faculty. If OSU does not offer competitive pay, then they won’t be able to retain people–and they won’t be able to recruit top people either. If mediocrity is the goal, then by all means, cut salaries. Take a look at pay at other highly-ranked institutions–UCLA, UVA, Wisconsin…if OSU wants to compete at this level, then you gotta pay for talent.”

    That’s the usual, tired argument. I don’t buy it.

    I suspect there is a certain pay point that each job requires, and once met, it will attract qualified candidates. As with any distribution, it will be a mix of qualifications, but I don’t think intelligence, diligence, creativity, and other qualities are so affected solely by Ultra High Salary Levels that OSU has to stick to this wasteful “Battle of the Higher Education Joneses” in order to do the job.

    There are younger folks looking to move up. There are folks who live in the area who don’t want to move. There is the recent horrid economy. There is also the notion of “Public Service” instead of “I Earn Mo Money Than You Do Bragging Rights.”

    I think it’s time to see what we could do with people who were really dedicated to higher education and not ones who have been bred to be the usual Derriere Bussing Rung Climbers.

    If you don’t like my reasoning you might want to read the book “Boyd: The Figter Pilot Who Changed the Art of War,” by Roger Corum. Boyd fought his major battles in the Pentagon against the Military Industrialists. He fathered the F-16 fighter, helped improve the survivability of the Bradley Fighting Vehicle, and a few other notable things.

    Boyd is widely considered to be one of the finest 20th C tacticians and military thinkers, and his loyalty was not gained with mere money.

    Variables. Multiple variables, there are!

    Money is only one of them. My guess is that for most people, it needs to be sufficient, and fair, but it isn’t necessarily the most important.

    But what do I know? I’m just a dumb public servant.

    Karl Spaulding

    Karl

  5. Sorry, the author of the Boyd book is ROBERT CORAM.

    http://www.barnesandnoble.com/w/boyd-robert-coram/1100303959?ean=9780316796880

    Good book. No, GREAT book!

    Karl

  6. anonymous says:

    This is not rocket science. Obtain historical information on total compensation (salary, bonus and deferred compensation) for various positions going back a number of years. For instance, on the compensation paid to legal counsel go back to Judge Duncan–determine what he was paid–carry that forward through Judge Duncan’s successors to Mr. Culley and plot it on a graph. Do the same for the President and other key positions. You should also be able to obtain comparative information on other Big Ten universities.

    We can then see if there has been a significant increase in the level of executive compensation at Ohio State over time, at least as to these positions. And compare it to what other similar institutions pay.

    The argument—put forward to end all discussion—that you need to pay a lot to retain good people is the same argument the Wall Street banks used when they paid huge bonuses after they were bailed out by the taxpayers. I wouldn’t go there. This is a public institution. This is a legitimate issue, particularly when affordability and access are touted by this university’s administration to be issues of concern.

  7. Anonymous says:

    There will always be a strong argument for competitive pay to attracted talent. From a different perspective would be to look equal pay for the talent that exists at OSU. This is where the salaries skew between new talent and existing talent.

  8. Anonymous says:

    Bonuses are ridiculous at A LOT of schools in the area. Just look at Capital, CCAD, Denison, OWU, etc. At least Ohio State is a great school and your diploma is worth its weight in the job market.

  9. Anonymous says:

    Diploma’s don’t weigh very much.

  10. Anonymous says:

    OSU Job Site:

    Custodial Worker $10.28 per hr.

    Custodians are essential to the operation of any organization. Try to run a hospital without custodians or even a university. Value given: $20560 per year. Considering Gee’s bonus of $1,460,703 – that’s the equivalent pay for 71 custodians. But, remember:

    “I’m not sorry, I feel very strongly that everyone at this institution should be paid well and right and should be paid according to how well they perform,” Gee told The Lantern in April 2012.

    Our society is sick with greed and selfishness.

  11. Anon says:

    Anyone who is either A&P or CCS staff at the university is shafted on an annual basis. Here is some information from the OSU union contract for CCS and Skilled Trade workers (source: http://www.cwa4501.org/PDF/CWAagreement.pdf):

    Service Employees

    Min Max
    1 9.21 14.45
    2 9.75 15.26
    3 10.28 16.12
    4 10.88 17.07
    5 11.37 17.82
    6 11.96 18.75
    7 13.11 20.55
    8 13.94 21.84

    Skill Trades/Maintenance Employees

    Min Max
    4 11.30 17.70
    5 11.86 18.59
    6 12.47 19.55
    7 13.54 21.21
    8 14.87 23.32
    9 15.61 24.48
    10 16.38 25.71
    11 18.24 28.61
    12 20.93 32.85

    On the Service Employees side, there are two, yes, two job classifications that start at pay grade number 8 ($13.94/hr). There are three classifications that are pay grade 1 ($9.21/hr). The most numerous is pay grade 4 ($10.88/hr).

    On the Skilled Trade side, there are four classifications at pay grade 12 ($20.93/hr). There is one classification at pay grade 4 ($11.30/hr). Most seem to be between 5 and 8 ($11.86 – $14.87/hr).

    These wages are, for lack of a better term, slave wages. Some of these jobs can be done at other state run agencies for upwards of double the starting pay that OSU offers. Instead of offering to pay more, the University proclaims they are strapped for cash, and make the union agree to terribly low annual raises. The next raise in the contract doesn’t look like it goes over 1%. The fat cats at OSU are making more in their BONUSES than many employees make in YEARS of service to the university. The claim is that CCS/A&P staff are replaceable. Not at such low wages! Even students don’t like working for the University! Oh, and don’t question the low raises or statements about OSU being strapped for cash. They’ll just wave the wand of privatization and threaten to take your job away and give it to a private company.

    Ever wonder why only young professionals live in Columbus, and not as many 30-50 somethings who are making a name for themselves? Because Columbus has the lowest per capita income of any city in Ohio, thanks to OSU. OSU pays a pittance, and so everyone else falls in line. One could transfer to a position in Cleveland or Cincinnati (any employer, not just OSU mind you) and instantly make more money.

    OSU can’t just rely on showering 18 top people with millions of total gross salaries and bonuses to maintain an elite status. What about the other 43,000 people who work there? You can’t continuously expect to maintain a pristine campus when 98% of your staff can barely afford to get to and from home. By the way, most, if not all, CCS and A&P staff do not receive any sort of bonus whatsoever. They are lucky to get an additional 1% job performance raise per year, depending on how their reviews went.

  12. Joseph M. Clark says:

    I must admit that I have never understood the tired old argument that people should receive bonuses for doing work that they agreed to do for an agreed upon set salary…

    …And, if one must dole out bonuses (because everyone else is doing it, which seems to be the argument), bonuses should be linked to the verifiable attainment of preset and published goals. Clarification and verification of these goals should be/ should have been the Latern’s focus in a future follow-up article, if not in this article.

    With respect to the non-existant annual performance evaluations of the employees who received bonuses, the supervisors whose job was to complete those evaluations should hvae to give his/ her binuses back!

  13. Joseph M. Clark says:

    Oops! Sorry for the typo; it should have been “bonuses,” not “binuses!”

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