President Dye’s Leadership and Income Increase

[The following letter was sent to the mailboxes of College faculty and staff on Sept. 6, 2002.]

To the Members of the Oberlin College Community:

In response to the interest expressed within the College community, we are writing about the deferred compensation plan that the Board of Trustees has unanimously adopted for President Nancy Dye. We do this reluctantly because President Dye’s compensation, like that of all other College staff and employees, is personal, confidential information and because the compensation of Oberlin’s President is historically and under the by-laws the exclusive responsibility of the Board. Nevertheless, correcting possible misunderstandings makes this message worthwhile.
The Board’s compensation program for the President has two elements, a current portion and, now, a deferred portion. The current portion is set annually by the Board based on annual evaluations by the Board of the President’s performance. President Dye’s excellent performance has justified current compensation that places her among the most highly compensated executives in her peer group.
And the excellence of her leadership over an eight-year period satisfied the Board that one of the most important things it could do for the future of Oberlin College was to provide added reasons for President Dye to remain here for a long period as the College’s President. The deferred compensation plan, the result of two years of study by the Board, is intended to do just that.
The ways in which President Dye’s leadership have enriched and strengthened Oberlin College are well understood by this community. But referring to some of the more significant quantifiable accomplishments of her tenure in this context will show why the Trustees determined it to be in Oberlin College’s clear best interests to strengthen the incentives for Nancy Dye remaining here.
Under President Dye’s leadership Oberlin’s student body has grown substantially stronger. Among other indicators the admissions and yield data demonstrate this. And faculty salaries have become significantly more competitive, while the faculty has continued to excel in teaching and scholarship. Student-faculty ratios have improved. All the while Oberlin has attained a gratifying improvement in the performance of its endowment relative to its peer institutions. And we are in the final phases of a major capital campaign that will raise claim to twice the highest campaign total in Oberlin’s history.
President Dye has led Oberlin toward identifying the institutional values and strategic directions articulated in the April 1997 publication, Broad Directions for Oberlin’s Future. And in the fall of 1999, President Dye led the effort to direct Oberlin’s resources to specific goals. The value of President Dye’s leadership in this respect is especially clear now when Oberlin, like almost all excellent liberal arts colleges, is dealing with repeated budget cycles with the unwelcome effects of declining investment yields and enormous cost increases in some budget categories. President Dye’s leadership in planning has given us a clear sense of direction and priorities.
President Dye’s leadership has given us a much sharper vision of the priorities in capital projects. Her determination and skill have rescued the Allen Memorial Art Museum, one of Oberlin’s architectural and instructional gems, from advanced deterioration. Her enthusiasm for and support of the environmental studies program contributed greatly to the presence in Oberlin of one of the nation’s most outstanding programs and facilities in that area. Within weeks Oberlin will dedicate its new science facility, which along with our excellent science faculty, will help Oberlin maintain its position among the nation’s very best undergraduate science programs. It is worth noting as well that under President Dye’s leadership the College prevented a key piece of real estate in the business district from passing to hands that could easily have put it to uses that detract from the beauty of the Conservatory setting. Of course, the town of Oberlin and the College continue to enjoy the services of a community hospital due in substantial part to President Dye’s recognition of the need and her creativity in devising means to help meet it.
As President Dye moved into a period of service roughly comparable to that of the heads of many institutions of higher education, the Board became acutely aware that one of the most important steps the Board could take to strengthen Oberlin was to create a strategy for keeping President Dye here. The Board did this on its own initiative. President Dye did not even hint the Board should do so. Nor did she indicate in any way that she was thinking of leaving Oberlin. The Board acted when it did because of the great value it places on Nancy Dye’s leadership and because trying to design a special incentive plan under the stimulus of possible departure is often not the optimum environment in which to work on such matters.
The Board’s deferred compensation plan credits President Dye with annual “notations” of $100,000 for up to a possible period of ten years, which President Dye can earn by continuing service as Oberlin’s president. The plan places President Dye at the substantial risk of forfeiture. If she leaves Oberlin in violation of the plan, she forfeits all the amounts then in the plan. In view of the extraordinary demands of an Oberlin presidency and the rare length of tenure that the Board was seeking to encourage, the Board included two interim steps in the plan. At the end of the plan’s sixth year (June 30, 2007), President Dye could resign from Oberlin without forfeiture. A similar option is provided for the end of the eighth year. Of course, at the end of the tenth year, President Dye could leave Oberlin without forfeiture.
The Board is very pleased that it has completed its work on this plan. President Dye clearly deserves the Board’s thanks and support, which the plan is intended to convey. We hope it will provide an appropriate additional incentive for President Dye to continue in her leadership role at Oberlin.

–Thomas J. Klutznick
Chair, Oberlin College Board of Trustees
–William Perlik
Chair, Oberlin College Board of Trustees Ad Hoc Committee on Presidential Compensation

October 4
October 11

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