Dye’s
Achievements Not So Hot
To the Editors:
In their recent letter to the Oberlin College
Community Board of Trustees, Chairman Tom Klutznick and Former Chaiman
Bill Perlik justify President Dye’s compensation package by
citing her outstanding performance. One of the “... more significant
quantifiable accomplishments” attributed to Dye is that “Oberlin
has attained a gratifying improvement in the performance of its
endowment relative to its peer institutions.”
This claim deserves a closer look. The Dye years correspond to the
greatest stock market performance in history. From 1994 to 2001
the S&P500 grew from 3,750 to 11,000, a seven-year increase
of 193 percent! For this same period Oberlin’s endowment grew
from $266M to $595M -- an increase of 124 percent. (Note that 2002
market losses are not included in either of these data sets.) To
what extent can the growth in Oberlin’s endowment be attributed
to President Dye’s leadership? Even her most ardent supporters
have yet to credit her with stimulating the market!
Endowment growth is determined not only by investment decisions
(made by the Board, not the President), but also by the payout rate
and fundraising. (Recall that President Dye solved our first structural
deficit, in part, by spending more from the endowment.) How does
Oberlin’s endowment growth compare with those of other schools?
Comparison data are available from the Chronicle of Higher Education.
Data for the 31 COFHE schools (Consortium on Financing Higher Education
-- a group that includes Oberlin College) show that, on average,
college and university endowments grew by 150 percent during this
seven-year period. Hence, during the Dye years, the growth in Oberlin’s
endowment was slightly below average for comparable institutions
and was significantly below that of the S&P500. The graph below
comparing Oberlin’s endowment performance with those for the
other 12 liberal arts colleges in COFHE may be accessed on the web
at http://energy.physics.oberlin.edu/finance/endowment.gif.
Oberlin’s endowment boat, like all boats, has risen with the
economic tide -- no more, and no less. It is hard to understand
how such average performance justifies “...compensation that
places [Dye] among the most highly compensated executives in her
peer group.”
–John H. Scofield
Associate Professor and Chair of Physics & Astronomy Department
(graphic appears in print version only)
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