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)