The travails of College and University Presidents are much in the news these days, as indicated by the headline of one column entitled “Who Would Possibly Want To Be A College President!?!”
Since American higher education remains, despite its imperfections, an important national endeavor, attracting students from around the world, we are fortunate that the answer to the journalist’s question as to who would want such a difficult job is: a significant number of highly talented and deeply committed individuals.
Our executive employment law practice has been privileged to represent many of these individuals (and, in different transactions, the institutions which are seeking such academic leaders).
Why are these jobs so difficult?
In part, because the world has shifted dramatically since the 1960’s, when the embattled University President Clark Kerr supposedly joked that the only three things a College President had to worry about were “sports for the alumni, sex for the students, and parking for the faculty.”
Today, the multiple constituencies to whom a College President is answerable are far more challenging and divided, from students and their parents, faculty and administration, trustees and donors, alumni and community leaders, local and national politicians, state and federal regulators, and I have no doubt omitted some additional interest groups. The concerns of these various groups rarely admit of a single response which will please all or even a majority of them. In the meantime, the President is on the hot seat in a number of other ways. The faculty is envious of what the President earns, while the football coach receives ten times as much. The President also wonders why he or she is working continually — one of our clients recently took off less than two full days in the previous 365. It seems to many of our Presidents like no one is ever satisfied, much less happy.
Nonetheless, most College Presidents remain idealistic and optimistic about the futures of their own institutions and higher education in general.
Can we offer meaningful assistance to these Presidents (or their schools) given the complexity of these jobs?
I believe that the answer is “yes,” in at least two ways:
1. By making certain the President has adequate contractual protections.
Some of these protections — a definition of Cause for termination which protects both the President and the institution, adequate severance and appropriate indemnities — are evident, but others are more subtle.
Here is an example. Contractual disputes between College Presidents and the institutions they lead are not common, but they do occur. Public attention to the dispute rarely helps either side. Accordingly, our Presidential contracts customarily include a provision requiring both the College and the President to engage in at least two days of confidential mediation, in front of a trained mediator, before either party can bring a potential dispute to court or to an arbitrator, as the case may be, for adversary resolution. Of the relatively few disputes which do arise, this pre-dispute mediation requirement disposes of most of them with little or no media scrutiny. This is an example of a protection for the College President which benefits the school as well.
2. By making certain that successful sitting Presidents are adequately rewarded for their efforts.
This past year has seen a number of our clients — College and University Presidents and Heads of Independent Schools as well — inquire about the consequences of leaving a seemingly intolerable job before the end of their contractual terms of office. Fortunately, in America, no one has to continue to work in a job for a day longer than they choose, although by leaving early they may forfeit significant financial benefits.
And not surprisingly, given the difficulty of these top executive jobs, the average length of the term of office of an educational CEO has been dramatically reduced. One source says that the current average tenure of a College President is no more than seven years (the days of the 20- or 30-year sitting President is fast becoming ancient history), and the demand for first-rate administrative talent exceeds the supply.
For these and other reasons, Boards which wish to retain extraordinary leaders need to be both generous and creative in the ways they compensate proven “winners” and incentivize them, if you will excuse the nautical metaphor, to stay at the helm during the most severe storms. As only one example, instituting a 457(f) deferred compensation plan is not only valuable for the President in terms of his or her ultimate retirement, it acts as “golden handcuffs” because the President who voluntarily departs before the end of his or her designated renewal term will forfeit the often substantial amounts accrued in such a plan. In general, Presidents become entitled to these amounts only if they reach the finish line.
As a lawyer, it can be agonizing to watch our Presidential and Head of School clients struggle with a number of personal and professional challenges. This makes it all the more important to assure that these same individuals have the firm foundation of a contract containing a range of personal protections, and, particularly when they are signing up for more than one term, be given compensation which adequately reflects their achievements and continued diligence in today’s contentious environment.
