TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, September 25, 2005

More on the Differences Between Faculty and Administrators

Last week, we blogged The Faculty Salary Game, which noted that embedded faculty who feel they are underpaid but are unable to obtain a competing offer from another school have only one choice: enter the high-paying world of university administration.  A recent New York Times article chronicles just how high-paying an administrative appointment can be:

In the next few weeks, the board of American University will decide the future of its longtime leader, Benjamin Ladner, who has become the latest college president to be investigated over the nature of his spending. Dr. Ladner, who earned $663,000 for the 2004-05 academic year, was suspended last month while investigators hired by the university began to examine recent financial records. Documents from the investigation obtained by The New York Times suggest that over the last three years he and his wife, Nancy, spent nearly $600,000 on airline tickets, hotels, limousines, food, a chef, a social secretary and household items - expenditures that were charged to American, but that lawyers for the university say have no apparent or documented business purpose.

Among the expenses at issue:

  • $219,000 salary and benefits for their chef
  • "Professional development" trips to France, Italy and Britain by the chef
  • $101,000 salary and benefits for their social secretary
  • $81,662 for food
  • $67,877 for car services, fuel and repairs
  • $37,408 for wine and liquor

(Thanks to Ann Murphy (Gonzaga) for the tip.)

Update:  Sunday's Washington Post reports American U. Board Split On Keeping President:

A schism among American University trustees is widening over the future of suspended President Benjamin Ladner, with some beginning private negotiations with his attorneys for a new contract and others pressing for his ouster. "There have been discussions between a group of trustees and Dr. Ladner, which are designed, we understand and hope, to restore him as president, resolve all of the issues and establish a new contract under which he can go forward," said David Ogden, one of Ladner's attorneys. "We are hopeful those will succeed."

Complicating an already tangled process, Ladner supporters on the board have divided themselves into three strategy groups, according to two sources familiar with the negotiations. One group reviewed some of the more than $500,000 of the president's spending questioned in an independent report and determined that he should reimburse the university roughly $21,000. Another group is bringing in a tax expert for advice. And a third is putting together terms of a new contract for Ladner that would reduce his compensation while adding controls over his spending and other activities, the sources said.

Here is my favorite passage:

Since his private and business lives are so intertwined, he said, it doesn't make sense to separate out every single personal expense.... Ladner said his wife thought he had paid for such personal events as the birthday parties they had for one another, some costing well over $300 a person, with such things as hand-shucked Maine scallops and vintage Champagne. "I never thought about it," he said. "We don't go downstairs and look through the records."

See also Saturday's Washington Post, AU's Ladner Defends His Spending

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