Saturday, December 24, 2011
Following up on Friday's post on Kimberly Krawiec (Duke), Does Anyone Disclose Salary Information If They Don't Have To?: Law School Transparency, Should [Faculty] Compensation Be Transparent?:
With any regime, whether regarding employment data or compensation, it’s critical to consider the consequences, positive and negative. I also wanted to highlight an interesting comment responding to Professor Krawiec’s Faculty Lounge post:
In an ideal world, we would trust the deans to do their job right, and we would keep compensation info private. But remember what the theory of second best tells us. So long as the world is not ideal, and we cannot trust the deans, opacity of compensation is not necessarily a good idea. As the Texas blowout shows, some deans simply cannot be trusted. Larry Sager gave himself a $500K bonus without informing his own boss! He also set up a vast system of payouts to his friends, most of whom had no outside offers from higher-ranked schools and were not at any risk of leaving. Can you make sure this massive self-dealing is not happening elsewhere? If not, periodic sunlight might well be the best disinfectant.
Whether or not this allegation proves to be true, these are the concerns law schools now face. Insofar that self-dealing occurs to the detriment of students and taxpayers, inquiries into faculty compensation will be sure to make headlines in 2012.