Paul L. Caron
Dean


Wednesday, January 8, 2020

New England Law School Dean Receives $5.3m Retirement Payout ($4m Deferred Comp, $1.3m For Unused Sabbaticals)

Following up on my previous posts (links below):  Boston Globe, New England Law Dean Will Leave With More Than $5 Million:

O'BrienDuring his long tenure at New England Law, John F. O’Brien has been among the highest paid law school deans in the country. When he turns over leadership of the school later this year to former Republican senator Scott Brown, O’Brien will also walk away with one of the most lucrative retirements in academia, worth at least $5.3 million.

O’Brien, 69, who has been dean of the Boston law school since 1988, is on target to receive an exit package more commonly negotiated by the presidents of top-tier private colleges or complex flagship state universities — rather than the head administrator of a 700-student law school with a local reputation and middling rankings, experts said.

O’Brien’s retirement package, which includes more than $4 million in deferred compensation and $1.3 million for unused sabbaticals, was reported in the school’s most recent nonprofit filings and was awarded even as New England Law has faced multiple years of operating deficits, anemic returns on its endowment, and falling enrollment. ...

Law school spokeswoman Jennifer Kelly said in a statement that O’Brien, who has been at the law school for 35 years, including as an associate dean, is leaving the law school in far better shape than when he arrived. “The compensation amounts for President John O’Brien listed in the school’s public filings represent accumulated retirement benefits reflective of 35 years of dedicated service to our law school,” Kelly said. “Upon his retirement, President O’Brien will be leaving the school in a solid financial position, having raised the school’s once negligible endowment to more than $85 million while keeping the school debt-free.” ...

New England Law students have also complained about their employment prospects post-graduation. In 2018, 44 percent of its students found full-time, long-term jobs that required the passage of the bar exam, compared to 68 percent nationally, according the ABA.

New England Law has also struggled financially. It ran an operating deficit of $2.5 million in 2017 and $8 million for the fiscal year ending in June 2018, according to its tax filings. ...

His retirement package also contains several unusual elements, according to compensation experts. Before 2017, the law school had set aside at the most $26,500 annually for O’Brien’s deferred compensation plan, according to its tax filings. But as his retirement neared, it appears from the school’s public filings that the trustees increased his annual deferred compensation allotment to $38,002, as long as he stayed on until 2020 and fulfilled other requirements. The school also adjusted the deferred compensation plan so that the higher annual allotment would stretch back to his entire tenure as dean and assumed that the sum had been increasing by 6.5 percent annually, according to the filings.

Most look-back provisions in exit packages are for about five years, not more than 30 years, said James Finkelstein, a professor emeritus at George Mason University, whose research focuses on college presidents and their contracts. The estimated lump sum value of O’Brien’s deferred compensation is expected to be $4 million. But it could be more, since O’Brien is entitled to receive the money in annual payments for the rest of his life — a perk rarely offered outgoing university presidents because of the long-term liability it could place on an institution, Finkelstein said. ...

Finkelstein said, he has rarely seen an exit package like O’Brien’s. “Here you have a dean of a law school, a low-ranked law school . . . his retirement benefits may be the best of any university president in the country,” he said. “They’ve taken on a huge liability here. Is this prudent?”

Inside Higher Ed, Law School Dean's $5 Million Retirement Payout

Prior TaxProf Blog coverage:

https://taxprof.typepad.com/taxprof_blog/2020/01/new-england-law-school-dean-receives-53m-retirement-payout-4m-deferred-comp-13m-for-unused-sabbatica.html

Legal Ed News, Legal Education | Permalink

Comments

Did he improve the school at all?

Posted by: Mike Livingston | Jan 9, 2020 1:58:23 AM

* slow clap *

Posted by: Anon | Jan 9, 2020 12:31:40 PM

@Mike Livingston,

At all applicable times NESL was the 6th best of Boston/Cambridge's 6 law schools, with the lowest percentage of grads getting full-time, long-term jobs as lawyers. Also the school has been running operating deficits and a sizable percentage of the full-time faculty that started the decade... is not there anymore.

Posted by: Unemployed Northeastern | Jan 9, 2020 7:50:29 PM

I suppose the Free Market (all hail!) demanded NESL pay him this much lest this NESL grad scamper off to become dean of HLS or YLS, amirite?

Posted by: Unemployed Northeastern | Jan 11, 2020 10:14:14 AM

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