The College’s Fiscal Year 2015 Form 990 is now available (pdf). Day 2 of a 5 day discussion.

Imagine that Williams was run by people whose sole goal was to maximize their own economic well-being. (This is not true! People like Adam Falk, Dukes Love and Denise Buell care a great deal about the welfare of undergraduates and the success of Williams as an institution.) But humor me for a second. Imagine that it were the case, that Williams, like many (most?) older non-profits were to be captured by its employees, its resources diverted to serve their ends rather than those of the institution itself. What would we see? Stuff like this:


Why does the College have to provide housing help to members of the 1%? Steve Klass, a smart and talent fellow, makes over $300,000 per year. Plenty of banks would be happy to lend him money for his (very nice!) house. Of course, if you think of the College has being run by a conspiracy of insiders eager to line their own pockets, this makes perfect sense.


The above demonstrates the mechanism by which College spending spirals out of control. (The exact same process is at work in the ever-increasing CEO pay in US corporations.) First, Falk’s compensation is set by incredibly wealthy individuals. The current members of the Evaluation and Compensation Committee are not listed. (More transparency, please!) But, I think that they are usually/always a subset of the Executive Committee and that group is always (?) only permanent trustees (not elected alumni) and, therefore, dominated by members of the 0.001%. Many billionaires wonder how Falk can survive on $768,000!

Second, compensation is under Falk’s complete control. Why shouldn’t he pay his buddy Fred Puddester the big bucks? Williams is rich and no one (?) congratulates Falk for keeping expenses down. So, why not increase Puddester’s pay from $365,000 to $442,000 over just the last two years? No skin off your nose!

Third, all the usual madness of surveys and consultants has the same effect here as it has in the out-of-control setting of CEO pay. Every NESCAC school thinks that it ought to pay its president, its CFO, its VP of Campus Life at or above the median of all NESCAC schools. Certainly Falk/Puddester/Klass are at least slightly above the median! So, half the NESCAC schools raise salaries this year, and then the other half raise them next year. In the absence of meaningful competition, it is not clear where this process ends . . .

Still, the Trustees are concerned that Adam Falk can’t really get by on almost $800,000, so they also provide:


Now, this is slightly unfair since the President has always gotten a house. (By the way, has Falk moved back in yet?) And arranging a golf membership is fairly common, and probably pre-dates Falk’s hiring.

I will save a my rant about the absurdity of paying-people-extra-to-quit for another day . .

Still, there is no excuse for feather-bedding like the below:


If you think of Williams as being run by a conspiracy of (highly intelligent) self-dealers, then all this makes sense. In fact, the most reasonable prediction is that more administrators will soon have access to these sweetheart deals . .

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