Dive Brief:
- "Golden parachute" deals for college presidents are often not known in detail prior to the controversy that develops after a president leaves an institution, but presidents often derive even more costly compensation packages after leaving their post, according to the Washington Post.
- The focus comes after Douglas Baker, who recently resigned as president of Northern Illinois University, was found to have received more than $700,000 in severance and other benefits according to his contract. This came after he was accused of overseeing significant financial mismanagement at the university, including "improper hiring practices." The university's credit rating was degraded to Junk in June.
- This excessive severance package is not unusual — The Washington Post reports that unless a president is outright fired, which rarely happens, the practice is pretty standard.
Dive Insight:
Higher ad administrations and Boards of Trustees need to be wary about the exorbitant costs that outgoing college presidents can have on an institution, especially as public institutions in many states continue to operate with budget deficits. Continued instances like the case of Northern Illinois University could create a backlash analogous to the aftermath of the Wall Street cash, where financiers receiving exorbitant severance packages were seen as out-of-touch with those who were really hurting from the ramifications. At the same time, these packages are necessary to entice prospective presidents away from other campuses or lucrative private sector opportunities to take a job in a higher ed institution.
However, the tenure of college presidencies are increasingly growing shorter, and multiple severance obligations owed at once can put an even more pronounced strain on campuses. The increased cost to universities with no clear benefits may be an indication that a better course is for schools to develop their potential presidential talent in-house, and try to introduce them to the necessary skills they may need for the presidency which they may not develop in the typical roles at a higher ed institution.