Recall my predictions about Trustee changes. I got some right and some wrong. Joey Shaista Horn ’87 has replaced Malcolm Smith ’87 and Robert Scott’s ’68 term has been extended, as predicted, but Barbara Austell ’75 and Stephen Harty ’73 also had their terms extended, which I find surprising. Comments:

1) I had thought that Greg Avis ’80 wanted more turnover on the Board. If so, then he needs to limit folks like Austell and Harty to just five years. If he isn’t going to limit them, then who is he going to limit? Again, I don’t have a strong opinion on this topic and if Avis thinks longer terms make sense, then I trust his judgment. But Williams is in a real financial bind. Wouldn’t getting some more (new) rich alums on the board increase donations?

2) I think that Austell might be the daughter-in-law of former trustee R. Rhett Austell, Jr ’48. True? Are there any other multi-trustee Eph families?

3) Here (pdf) is a listing of the Trustee Committee assignments in 2008-2009. One of my good governance suggestions is that this information ought to be listed on the main trustee page, or at least linked to from there. Very few alums/students/faculty will want to contact the trustees directly about issue X, but, for those that do, the right approach is to e-mail the trustees on the appropriate committee.

4) One committee that is not currently listed but which was present last year (see page 393 of this giant pdf of 2008-2009 course catalog) is for compensation.

Compensation Committee (Subcommittee): Robert I. Lipp, Chair; Paul Neely. Non–Trustee Member: Raymond F. Henze III, Trustee Emeritus.

Interesting. Longtime readers will remember our extensive discussions about Morty’s salary. Classic post here. (One of my all-time favorites.) Basic debate began more than five years ago and has featured some fun back-and-forth: here, here and here. Good times!

Short version: In 1998, total salary and compensation for Hank Payne was $274,000 (pdf). Just 10 years later, Morty’s total compensation was $516,000 (pdf). (I am leaving out the $43,000 in tuition reimbursement that Morty received.) The growth has been mostly linear over that time and has greatly exceeded the increase in faculty salaries.

Why does Williams pay its president so much? Partly because everyone else does. Partly because the money does not come out of any individual’s pocket. And partly because the people who decide the president’s salary are so absurdly wealthy that $500,000 does not seem like a lot of money. Recall Jack Welch’s advice to greedy CEOs about how to structure their compensation committees.

This columnist once heard Mr Welch tell a chief executives’ boot-camp that the key was to have the compensation committee chaired by someone older and richer than you, who would not be threatened by the idea of your getting rich too. Under no circumstances, he said (the very thought clearly evoking feelings of disgust), should the committee be chaired by “anyone from the public sector or a professor”.

Exactly right. Exploring the history of this compensation committee at Williams would make for a fun Record article. Did it even exist a decade or two ago? I doubt it. Back then, the President’s salary was not set by a 3 Eph cabal of extremely rich alumni. Whose idea was it to change the structure?

And, of course, you have to love the back-scratching here. Lipp thinks that Morty is a great guy and so pays him lots and lots of money. Morty thinks that Lipp is a great guy and so invites him to give the Baccalaureate Address.

My comments are the same as they were five years ago:

If the growth rate of 9% per year continues, then Morty (or his successor) will break the $1 million mark in 2013. As always, my question to defenders of the current system is not: Is Morty paid too much? My question is: At what point should I — as a concerned alum from whom the College is always asking for more money — become concerned that the President of Williams is being paid too much? Is it $600,000, $800,000, $1 million, $4 million or what? How much is too much? Tell me now so that I can know when to start worrying.

I have little doubt that if I had asked this question in 1988, people — perhaps even Morty himself as my professor in ECON 401 — would have quoted numbers not much greater than $500,000.

I do not think that the trustees need a special, elite committee to handle compensation. Better to have that discussion with the whole board, or at least the executive committee. Involve some professors!

5) How did Yvonne Hao ’95 end up on the board? I am sure that she is a wonderful person, but there must be some sort of back story here. She was appointed before her 10th reunion! I can’t recall a younger trustee. Can anyone? Remember that Jack Sawyer ’39 (large pdf) was not named to the Board until 1952, 13 years after graduating from Williams. At the time, he was the youngest trustee in Williams history.

6) Never to early to speculate about next year! The following trustees have terms that will finish in June 2010: César J. Alvarez ’84, E. David Coolidge III ’65, Delos M. Cosgrove III ’62, Yvonne Hao ’95, Michael B. Keating ’62 and William E. Oberndorf ’75.

Predictions: Keating, having served a full 15 years, will retire. Many thanks to him for excellent service to Williams (and for kindly returning my e-mails). Alvarez is finishing up his Alumni Trustee term and so will probably be gone. Cosgrove is a tricky case because he started (I think) as an Alumni Trustee but then had his term extended. I expect that he will be out. (Has any other Alumni Trustee had his term lengthened in that way?)

Coolidge and Oberndorf will probably have their terms extended. Both are very rich and Coolidge, as a former chair of the Investment Committee, will almost certainly serve a full 15 years. I expect that Hao will be out.

If the above is correct, there would be three new spots open (besides the Alumni Trustee position) from the departures of Keating, Cosgrove and Hao. Who will fill those spots? I don’t know. But the College definitely needs to raise a lot of money in the next decade or so and the best way to raise money is by putting rich Ephs on the Board. Look for some appointments from alums currently serving on the Investment Committee (pdf). My money would be on: Halvorsen ’86, Boutwell ’74 or Graham ’82.

UPDATE: Some editing and additions made.

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