Why is it important for executive employment attorneys who regularly advise college and university presidents and other senior leaders in higher education to understand the peculiar hiring cycle to which these presidents and deans are most often subject?
The answer is clear. The nature and timing of that hiring cycle directly affects each president’s employment contract, in particular, crucial terms such as the amount and timing of severance to which the president should become entitled in the event that he or she is terminated without “Cause.”
In higher education, the academic year traditionally runs from July 1 to the following June 30, and is far more important to college presidents than the calendar year (which customarily governs the employment and compensation packages of executives in other areas, including finance, industry and media).
College and university presidents are traditionally hired for a (nominal) term of years beginning on July 1 of a particular year. We use the term “nominal” because although the first page of a presidential employment agreement customarily says that the president is being hired for a term of three, five or seven years, the president’s contract is not really a “term” contract — a genuine term contract being, in fact, a rarity in today’s employment world — because that same president’s contract also provides that he or she may be terminated by the Board of Trustees of the institution at any time without Cause. If not terminated, however, a president’s contract generally will end on a future June 30.
The relevance of this academic year, running from July 1 to the following June 30, becomes directly reflected in the hiring cycle for university and college presidents as follows:
Most college and university presidents are hired after the Board of Trustees learns or determines that the current leader will be leaving, generally at the end of the current or a future academic year. At that point, the Board usually hires a professional recruitment firm to conduct a structured search for the next president.
Experienced executive employment attorneys who represent college and university presidents are familiar with this search process, which, no matter when it begins, involves the following steps: (a) the search firm learns what the Board is looking for in a new leader in order to develop the specifications for a search; (b) guided by those specifications, the search firm then puts together a list of potential candidates for the position; (c) the search firm then arranges initial telephone or virtual interviews for a larger group of candidates; (d) the search firm uses Board feedback to winnow down the list into a smaller group of candidates who are invited to travel to campus for in-person interviews; (e) the Board and the search firm settle on three or four “finalists” for further, even more exhaustive scrutiny by the Board, its Chair and/or the relevant Board subcommittee; and (f) when the Board has agreed on its preferred leading candidate (with one or two back-ups in case the preferred candidate declines an offer or becomes unavailable), the search firm notifies the preferred candidate and the parties attempt to agree on the terms of the new leader’s employment.
At this point, a wise presidential candidate lets their executive employment attorney take over or at least guide the actual contract negotiations, since the search firm, which is paid by the school, is only interested in “delivering” the Board’s choice and has no interest in making certain that the terms of the presidential employment contract are equitable, let alone optimum, for the potential president.
This search process, from the Board’s initial move to secure a new president by commencing a search, to the actual hiring of the new president, rarely if ever takes less than a full academic year. Even if the search process has started before July, the development of the list of potential candidates (spring-summer of year 1), the initial interviews (fall of year 1), the final interviews and selection (winter or early spring of year 2), leading to the commencement of new presidential employment on July 1 of the second year, requires — unless rushed by some unusual exigency or the presence of an acceptable in-house candidate — at the very least, a full academic year and sometimes longer.
In a perfect world, the current president continues in office during that time, and steps down just as the new leader takes office. If not, there may need to be an interim president.
The most important “take away” for college and university presidents and their executive employment attorneys is that a president who, for whatever reason other than resignation, finds themselves out of a job, needs to have the security of a contract which provides at least a full academic year and hopefully eighteen months of severance upon their termination without Cause. The president needs this amount of severance in order to “get back in the game” and avail themselves of at least one full presidential hiring cycle. Any lesser amount of severance may leave the departing president not only unemployed, but uncompensated for a meaningful period of time before the next job begins.