College President Nancy S. Dye has been granted a contract extension through 2011 and may receive up to $1 million in deferred compensation, in a deal approved by the Board of Trustees this spring.
If Dye stays nine more years, she will have served the fourth longest of any other presidents in Oberlin’s history. Dye has been president since 1994-5, and will have served 17 years by 2011.
Henry C. King, who presided from 1902-27, has served the longest. James H. Fairchild and Charles G. Finney, who ran the College in the latter half of the 19th century, will have also served longer than Dye.
Dye declined to comment on how long she intends to stay. She said only, “I can tell you, I love my job.”
A senior administrator said that Dye was strongly encouraged by Brown University to apply for its presidency, which was just recently filled by Ruth Simmons, who had been in the running for Oberlin’s presidency in 1994. Oberlin turned Simmons away, and today, she is president at Brown. Dye declined to apply.
“The Board has been studying deferred compensation for something like two years,” former Chairman of the Board and current Board Member William Perlik said. “We were satisfied that it was in the long term interests of the College.”
“She deserved it,” he added.
The timing of the announcement, when the College has declared that major new budget cuts are in the works, has taken many by surprise. The ubiqitous question on campus is: why now?
The deal, made during closed sessions of the Board, was never announced by the College.
Leaked to the Review just before Oberlin’s commencement ceremonies, the call came too late, and without verification, to make the commencement issue. It was first reported by the Elyria Chronicle-Telegram in August. The Board believes someone tattled to the Chronicle.
Perlik stated that the College had no plans to announce the bonus, which the Board viewed as confidential. If not leaked, it would have likely been discovered May 15, 2004, when the College typically files its Form 990, a federally mandated public information document for non-profit institutions.
“There was a leak,” Perlik said. The timing of any discovery, he added, would have depended “on the filing of the Form 990.”
But when the media called to confirm the information, the Board opted to disclose the new contract, rather than let the rumor mill run.
The average tenure of liberal arts college presidents runs under ten years.
The College’s last president, S. Frederick Starr, is frequently accused of maligning Oberlin’s institutional reputation. Dye, meanwhile, is credited with admissions improvements, new buildings, stronger endowment performance and a solid capital campaign during a tough economy.
Perlik spoke with representatives of student media Tuesday, having flown in from Washington, D.C., at the behest of current Chairman of the Board Thomas Klutznick. Perlik was Chairman of the Board when Dye was hired. Apparently speaking for the Board, Perlik said that the Board has been “extremely impressed” with Dye’s “enormously successful” tenure.
“I want to emphasize the long term benefit that would accrue here,” he said.
“When Nancy arrived we had what could be best described as an aborted strategic plan,” he continued.
Dye created a new master plan in the late ’90s.
“It was a brand new approach,” Perlik said. “Nancy began to restore a sense of confidence and trust in the community ... that had been severely weakened in previous years.”
President Dye is eligible to receive $600,000 in addition to her regular salary if she stays for six years and decides to leave after the 2006-07 academic year. She will then be able to leave in 2009 or 2011, with an additional $100,000 for each year of service. All told, Dye can collect a $1 million bonus in June of 2011.
The deferred compensation plan, however, grants Dye only narrow windows of time where she can opt out.
On June 30, 2007, she can quit her post and receive $600,000. On June 30, 2009, she can retire and receive $800,000. Or, she can wait until June 30, 2011, and take the entire $1,000,000.
But if she leaves on any other dates, she’s out of luck.
“If she misses one of these trigger dates and leaves, she misses the whole damn thing,” Perlik said.
After that, the Board will entertain a conversation about her continued tenure.
“I would assume that based on her performance to date we would very much want to have her continue,” Perlik said.
By Perlik’s account, the Board has been thrilled with Dye’s presidency, and was eager to sign her to a long-term contract extension.
Speaking of Dye’s performance, Perlik said, “You’ve really hit the sweet button for me.”
He posited a comprehensive list of Dye’s achievements in the areas of strategic planning, admissions, construction, endowment management and the capital campaign.
The campaign, which seeks to raise $165 for Oberlin’s strategic goals in areas from faculty salaries to paying off the new science building, remains ahead of schedule for its conclusion in 2004. Before Sept. 11, there had been talk of raising the goal, which has since vanished.
It’s “breathing down on a successful conclusion,” Perlik said.
Oberlin’s endowment performance under former President Starr pales by comparison to Dye’s tenure. While some say that was simply the result of a booming economy, others note how little the endowment has lost in the last year relative to peer schools.
“Our relative performance has gone from night to day,” Perlik said. “She has enormous support among the alumnae body.”
According to Vice President for College Relations Alan Moran, President Dye is currently making $323,000, including benefits. Dye’s salary has risen by more $100,000 since 1998. Dye has consistently received raises greater than those of faculty, staff and other administrators, at roughly 7 percent.
Perlik says this is because Dye serves at the pleasure of the Board, which cares less about cost of living increases and more about their assessment of her performance.
“Cost of living really has not been a factor in these annual salary reviews,” Perlik said.
Beyond her salary, benefits and possible deferred compensation, Dye is also granted a residence at 154 Forest Street. But while free, Dye is required to live in that particular house by the Board, and it is the tacitly understood hotspot for often more than weekly dinners for events, speakers and donors.
Dye made no mention of the bonus during the College’s first General Faculty meeting Tuesday, where she began the year’s conversation about a possible second round of budget cuts.
“Oberlin is famous in the world of higher education for doing more with less,” she said.
Perlik also noted that while Dye is more or less contracted for a number of years, she continues to serve at the pleasure of the Board, and could still be removed under extreme circumstances of “malperformance” or “dereliction of duty.”