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Ohio State doles out $610K for presidential search

May 28, 2014

young.1693@osu.edu
University of California Irvine Chancellor Dr. Michael Drake at a press conference Jan. 30. OSU officials announced that day Drake is appointed to be the next OSU president. Credit: Ritika Shah / Asst. photo editor

University of California Irvine Chancellor Dr. Michael Drake at a press conference Jan. 30. Drake is set to assume the OSU presidency June 30.
Credit: Ritika Shah / Asst. photo editor

A new leader doesn’t come cheap—Ohio State dished out nearly $610,000 in its efforts to find a president, ensuring along the way that the people conducting the search and the candidates they found ate and traveled well.

Over the course of a six month presidential search, OSU used “unrestricted funds” to pay a private search firm, a private business jet rental company and other various restaurants and businesses in the Columbus area, expenses that one OSU professor said don’t seem extreme.

And while that spending resulted in the hiring of a president that officials have said they’re enthusiastic to have, the man chosen doesn’t seem to have been those officials’ first choice.

Dr. Michael Drake, the current chancellor at University of California Irvine, will become OSU’s president June 30. His salary is set at $800,000 annually, with a deferred compensation credit of $200,000 each year and eligibility for an annual bonus of as much as $200,000.

Though OSU’s presidential search kept candidates a secret, a public records request revealed the names of at least a few other people considered for the job. The most notable was David Skorton, Cornell University’s president, who is moving on to a position at the Smithsonian Institute later this year.

Bill Funk, president of Dallas-based search firm R. William Funk & Associates, emailed Skorton Sept. 16, seeking to gauge Skorton’s level of interest in being considered for the OSU presidency.

“(OSU has) specifically requested that I contact you and see if there is any way you might have interest in that position,” the email read. “They assure me that they can make it worth your while financially … They obviously would find an appropriately meaningful and attractive position for your spouse.

“If you were to have an interest, the Board (of Trustees) would meet with you and forgo other candidate conversations pending your continuing interest.”

The email noted OSU officials were most interested in Skorton because of a medical background and a knowledge of health science centers given the OSU Wexner Medical Center expansion.

The records don’t show whether Skorton replied.

OSU signed a contract with R. William Funk & Associates Sept. 17 agreeing to pay the firm a fixed fee of $200,000 and reimburse it for direct, out-of-pocket expenses. The contract also included an additional cost of $20,000 to cover administrative and support expenses.

Monthly invoices from the firm, provided through a public records request, showed those expenses totaled $231,272. The out-of-pocket expenses included hiring several companies to do background research on candidates.

OSU spokesman Gary Lewis said no student or tax money was used to fund the presidential search, as the costs came from unrestricted funds. Unrestricted funds are given by a donor to an organization to be used as the organization sees fit.

The amount OSU spent was nearly two or three times what some other schools doled out this year for their presidential searches. University of Michigan spent about $320,000, according to an MLive article, while Kent State paid more than $211,000 in finding a new leader, according to the Record-Courier.

But Richard Dietrich, a member of the OSU Faculty Council and an accounting professor, said the amount OSU spent seems reasonable. He broke the parts of the search down into what he speculated would be a typical expense for each.

“A rule of thumb is that a search firm will be paid about 1/3rd of the leader’s first year compensation.  So if President Drake will be paid $800,000 … the search firm might be paid up to $267,000,” he said in an email.

Allan Silverman, an OSU philosophy professor and a former faculty chair for University Senate, cited the same figure.

“The going rate (for a search firm) is generally a percentage of the salary paid to the incoming president, roughly 33 percent,” he said in an email.

According to the records, OSU also paid NetJets, a Columbus-based private business jet rental company, $186,714 for 10 flights, or five round trips, between Port Columbus International Airport and airports in Lincoln, Neb., Atlanta and Santa Ana, Calif., the latter of which is about a 16-minute drive from UC Irvine.

Dietrich’s breakdown made that figure seem like it was on the high end.

“Once candidates are identified, some members of the search firm and the search committee typically travel to one or more ‘neutral’ cities to conduct preliminary, face-to-face interviews,” he said. “These travel costs might be significant—perhaps $100,000 depending on the number of candidates interviewed in this initial round.

“Once finalists are selected, they sometimes are invited to Columbus … This also might include spouses or family members. The cost might be $20,000 or more depending on travel arrangements and the number of finalists traveling.”

The records also indicated that Cameron Mitchell Restaurants earned $8,440 from OSU during the search, including $764 when the search committee met Drake and $3,039 for a lunch for the search committee.

And about $95,630 was spent on advertisements in The New York Times, The Columbus Dispatch and The Chronicle of Higher Education for the Symposium on the University Presidency in August.

The symposium, a discussion held at the Ohio Union about what qualities a president should have and what a president should expect in his or her term, cost nearly $118,000 total, including travel, hotel rooms, transportation, advertising, dinner and honoraria, which are payments given for professional services on which there is no set price. The event featured four panelists from various higher education institutions and a moderator from the Harvard Graduate School of Education.

Dietrich said advertising costs especially are justified.

“Although OSU is internationally recognized, good candidates may not be aware of our presidential search. To assure that we can identify an outstanding, diverse group of candidates, there may be a substantial advertising program. This program might cost $100,000,” he said.

The approximately $65,470 remainder of the search expenditures went to companies and locations including Office Max, Target, UniPrint and the Longaberger Alumni House for things like printouts, refreshments and room rentals.


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Comments (16)

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  1. Concerned Citizen says:

    Dietrich’s comments are indicative of Ohio State’s leadership’s lack of frugality and over assessment of their own importance. This search could have been conducted much more cheaply and equally effectively — and without the use of private jets. Ohio State administrators do not need to travel as if they are multimillionaire rock stars. This is a land grant institution and some humility and respect for the mission are long over due. And Dietrich as head of the University Senate fiscal committee is clearly an apologist for the system. Clearly there are few checks and balances.

  2. J Rapach says:

    This $610K makes me not want to keep donating.

    What a pure waste of funds.

    J Rapach ’61

  3. Concerned Faculty says:

    The lack of institutional accountability is appalling…and this in the wake of The Nation story on over-paid suits and student debt. It’s shameful…people should be fired over this, but of course they’ll probably be promoted instead.

    Alumni…cut these people off (forget the damned football team). These people are drunk on other people’s money, and somehow it needs to be ratcheted back. Truly disgusting.

  4. George Williams says:

    Absolutely absurd, ridiculous, and insane. 70% for a search and consulting firm(s)? How many cousins and nephews are getting rich on this one?

  5. Anonymous says:

    It is a shame. We are still reeling from a not-so-charitable piece in NYT which linked the high salaries of administrators to rising costs to citizens of OH. It is not clear all this spending is really improving the quality of education. Administrators of public universities are not CEOs of profit making corporations. Something seems amiss here.

  6. Alumni Assoc Life Member says:

    As OSU’s high-spending and borrowing-against-the-future oligarchy rules, and operates, unremittingly with reckless impunity—the People will suffer, traditions die, and
    institutional control dislocated. It truly IS amazing how lo…w this university’s
    integrity and honor have descended over the past two decades.

  7. Don Riley says:

    I wonder how this expense compares with the search for a head football coach.Coaches are paid 4 times as much as a university president.

  8. Anonymous says:

    Now I know why they raised football ticket prices. Stop asking for money ohio state.

  9. Very Concerned about Ohio State's Reputation says:

    Ohio State is a great University, with great faculty, smart students and wonderful staff that support students and faculty. This is what we should be known for: our research, our academics, our students and our staff.

    What a shame that due to a lack of perspective and “let them eat cake” attitude, what Ohio State is becoming known for, besides football, is being top heavy with overpaid administrators who live a lavish lifestyle and spend as if there is no tomorrow.

    Think what could have been done toward our academic mission with even half of that $600K had Ohio State spend “only” what Michigan spent on its presidential search. Think what other overspending is out there, because this is certainly reflective of many, many other incidences of overspending.

    I hope that President Drake has values and perspectives more appropriate to Ohio State’s true areas of excellence and will find a way to let them shine through and will put a stop to the waste.

  10. who really suffers says:

    And once again leadership will ask faculty and staff to understand and appreciate their subpar annual performance increase of no more than 1-2%. Leadership stresses a culture of performance yet allows deans to skim from the merit pool money from others in order to address the low hiring salaries of faculty and senior staff. And the only incentive to not rebel and perform well….is the threat of replacement. Real recognition for faculty and staff no longer exists.

  11. Chris Metzger says:

    Let me see if I have this straight. OSU hires a Texas (read: out of Ohio) firm for $600,000 to “lead the search process,” AND they take out an $85,000 ad in the NYT (as opposed to just the more relevant and far less expensive The Chronicles of Higher Education) for the job. (As for an ad in The Dispatch? Puh-leez.)My FAV though is the $18K for 5 round trips on a private jet. LOL!! Mitchell dinners and lunches? LMAO!!

    What in the real world are the OSU trustees doing other than having parties and getting good football tickets?? Here’s a suggestion: LEAD THE SEARCH PROCESS! Are they so incompetent that they (titan business leaders, mind you) cannot lead a recruitment without such massive spending — albeit supposedly buried in “donated funds”? One would think that “word would get around” sufficiently for such an open position. All this while the costs and debts for students at OSU continues to increase. Go figure. As my pappi always said: “Son, there’s book smart and there’s street smart.” Better yet: “ya can’t fix stupid.”

  12. Chris Metzger says:

    PS: The only thing that tops this extravagance is the AD getting a $30K+ bonus for the crew team’s recent championship. I must have missed him . . . which seat was he sweeping from? Or was he the dude in the front yelling “money! money! money!” ??

  13. Ex-Oligarch says:

    Can it be that OSU’s administration does not know that money is fungible, and that $620,000 of unrestricted donor funds instead could have been spent to benefit the university’s students, boost its academic reputation, lower tuition or to shore up its endowment? No, I suppose not. The argument that no public or tax dollars were used on this effort is an insult to the intelligence of Ohio citizens. Gary Lewis should be ashamed of himself, though since nowadays university spokesmen seem to be hired for their total lack of scruples I expect he won’t be.

    Coming from the UC system, Dr. Drake has plenty of experience with absurdly wasteful administrative spending, an ever-metastasizing bureaucracy, and first-class luxurious perks, so it seems he will fit right in at OSU.

    Executive search firms and their clients have long since succeeded in ratcheting both compensation and recruitment costs into the stratosphere for public corporations, so why not do the same for academia? The sky is the limit, and OSU is leading the way to a new normal. If Professors Dietrich and Silverman play their cards right, they one day may be able to ride this lucrative trend right to the top.

    One small correction to your excellent article: Dr. Skorton will remain at Cornell through mid-2015, to preside over that institution’s sesquicentennial academic year.

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  15. Joey says:

    Incredible, bust your butt all year to only get a 1-2% increase. Not to mention the fact staff makes much less than the public sector! Then get told “well Joey you did a great job this year unfortunately we can only give you a .85% increase, the economy is real bad, the governor will not let us give more, hey look at the benefit of working for ohio state, how many people can say that, and we are competitive with external companies” read this piece and want to vomit. “The ones who really suffer” comment above is spot on throughout the entire university, hire low, complain, you are being placed on PIP, then replaced within 2 months, and the problem starts all over again…

  16. SadTaxPayer says:

    Over $600K and Dr. Drake is all they could get? If the Trustees actually did their jobs instead of just mooching off the public’s money, this could have gotten done far less expensively and with a better candidate at the end. Congratulations, Trustees. You now have some else to further rip apart a once-great institution, while spending money left and right at the same time.

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