January 25, 2011

Day Hall Refuses To Disclose Executive Compensation

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President David Skorton rejected the Student Assembly’s Resolution 12, which called for the University to release information on the executive compensation of its top administrators.In her explanation of the decision, Vice President of Human Resources Mary Opperman cited Cornell’s status as a private institution. She also said the resolution went beyond the scope of the S.A. While the University decided to withhold the requested salary information,, it outlined the philosophy that determines executive compensation in a written response to the S.A. released on Nov. 29.  Opperman’s response stressed that executive leadership only accounts for 1.3 percent of the University’s payroll cost. “Said another way, the cost of the pay and benefits for executive positions on the Ithaca campus amount to about three quarters of one percent of the operating budget,” she said.Opperman also emphasized that Cornell’s executive pay is in line with those of other institutions. “The University compensation philosophy for executive pay establishes that Cornell benchmarks to and pays competitively with the relevant market midpoint for comparable positions among the established set of peer institutions,” Opperman said in the response to the S.A. She also noted that executive pay is linked with the performance of the University’s employees, calling performance a “critical component” of how executive pay is alloted.S.A. At-Large Rep. Andrew Brokman ’11, who proposed the resolution on Sep. 16, said that the adminstration’s response was “respectful” but lacked detail.  “I don’t think [Skorton’s] decision was in the best interest of the students — the people who pay for these salaries,” Brokman said.  According to Opperman, Skorton sought advice from several senior staff members, including herself, and reviewed the possibilities before he made his decision.  The resolution requested that the University provide an Annual Report on Executive Compensation from the Department of Human Resources, which would be available for public viewing online.  The report would have disclosed salary and benefit information for all of the administrators listed in the Cornell Annual and Financial Report. “They gave us one thing we asked for: the philosophy they use when determining executive compensation,” Brokman said.  “It’s nice to know there is one.”Still, Brokman criticized the University’s focus on the 1.3 percentage figure, arguing that this number does not tell the full story of Cornell’s executive compensation.“Instead of giving a more transparent salary table, we’re simply given a percentage,” Brokman said. “This 1.3 percentage of the 2 billion dollar budget implies that it’s not that much. It could mean that 40 people make tens of millions of dollars.”The resolution had also requested a disclosure of the University’s specific policies regarding performance-based compensation, as well as a ratio of the president’s total annual compensation to the compensation of all other employees. The compensation is reviewed and approved by the Executive Committee of the Board of Trustees and set in a carefully regulated manner consistent with law and the University’s own procedures, Opperman said.   “The resolution has been fully addressed,” Opperman said. “We looked at this the way we always do and ultimately the president decides.” “I’ve personally talked to Skorton and he’s gone as far as he’s willing to go,” Brokman said. “I don’t think they’ll give us numbers unless they’re legally obligated to.”

Original Author: Laura Shepard