News

Stanford president takes 10 percent pay cut

Stanford President John Hennessy and Provost John Etchemendy, along with members of the university's cabinet, are taking voluntary 10 percent reductions in pay because of the university's budget squeeze.

Etchemendy announced the voluntary pay cuts in a campus letter Tuesday.

The university is aiming to reduce expenses in its annual $800 million general funds budget by $100 million in the next two years.

Department heads have been asked to submit budget proposals with 5 percent, 7 percent and 10 percent expense reduction scenarios.

Etchemendy said Stanford must reduce the number of its employees but "we do not plan to mandate an across-the-board approach."

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Stanford president takes 10 percent pay cut

Uploaded: Wed, Dec 3, 2008, 9:55 am

Stanford President John Hennessy and Provost John Etchemendy, along with members of the university's cabinet, are taking voluntary 10 percent reductions in pay because of the university's budget squeeze.

Etchemendy announced the voluntary pay cuts in a campus letter Tuesday.

The university is aiming to reduce expenses in its annual $800 million general funds budget by $100 million in the next two years.

Department heads have been asked to submit budget proposals with 5 percent, 7 percent and 10 percent expense reduction scenarios.

Etchemendy said Stanford must reduce the number of its employees but "we do not plan to mandate an across-the-board approach."

-- Don Kazak

Comments

Sam
another community
on Dec 3, 2008 at 10:48 am
Sam, another community
on Dec 3, 2008 at 10:48 am

Gee...a whole 10% cut. You think he can still live on $640K a year?


Cheapskate
Los Altos Hills
on Dec 3, 2008 at 11:22 am
Cheapskate, Los Altos Hills
on Dec 3, 2008 at 11:22 am

I think Sam forgot benefits.

When US CE0s, fancy university presidents included, finally realize that they are living on another compensation planet and make real adjustments; perhaps those outside their pay-grade will appreciate it.

We will know the economy is getting back in shape when the top is paid what it is worth. A 10% reduction is a looooong way from what is fair/just compensation.

And, please, spare me from "that's what the market will pay" --> look at the rest of the world's compensation levels because we are surely joining it from our previous, rarified perch ...assuming we don't pass right by on the way to becoming 3rd rate.

I don't expect any CEO/prsident beyond Detroit to willingly do something worth noting. And those minor-3 will surely pad their compensation on the way out of the economic mess, assuming they survive.

Sorry, Drs. Hennessy & Etchemendy, no style points from here....


exstan
Menlo Park
on Dec 3, 2008 at 1:40 pm
exstan, Menlo Park
on Dec 3, 2008 at 1:40 pm

This struck me as a little disingenuous also - 10% reduction when almost all of their expenses are paid. Both Drs. Hennessy and Etchemendy live rent free in what can easily be described as palatial homes. And both are tenured, so no fear of being "laid-off", "downsized" or whatever euphemism is the popular buzz word today.

This morning's New York Times ran an article on the soaring cost of college tuitions. College tuition and fees have outpaced median family income by over 300% since 1982, the consumer price index by over 300% in the same period, and medical care by almost 200%. More increases are anticipated in the coming year.

Something to keep in mind is that private universities are big businesses. Undergraduate education is a small part of what they are selling. Public and private grants for research are a large part of their business. Solicitation of donations from alumni is another very large part.

Web Link

Interesting read for anyone wanting more information. Stanford spent $208,440,000.00 of its $386,000,000.00 budget on salaries and benefits and a whopping $19,300,000.00 on financial aid. That's 54% for salary and benefits versus 5% on financial aid. Considering that they are sitting on somewhere around $16 Billion in their endowment fund, they are not really in such dire straights. My guess is the negative attention is causing some guilt pangs.


cblasey
Stanford
on Dec 3, 2008 at 7:51 pm
cblasey, Stanford
on Dec 3, 2008 at 7:51 pm

As a longtime Stanford staff member, I appreciate their choice of a pay reduction.


resident
Another Palo Alto neighborhood
on Dec 3, 2008 at 8:22 pm
resident, Another Palo Alto neighborhood
on Dec 3, 2008 at 8:22 pm

This is a well-thought out "gesture" as Stanford staff will soon be required to follow suit with a 10% pay cut.


chrisk
University South
on Dec 4, 2008 at 10:20 am
chrisk, University South
on Dec 4, 2008 at 10:20 am

Harbaugh and Dawkins make more than $250K, which apparently is the threshold. Are they taking the 10% cut?


Lori
East Palo Alto
on Dec 4, 2008 at 11:16 am
Lori, East Palo Alto
on Dec 4, 2008 at 11:16 am

Exstan

Some points to note:

Stanford is not only a "big business", but it's a non-profit. Grants and donations are a huge part of their livelihood as it is for all non-profits who depend on a source of income other than profitable gain to get by. Tuition alone could never pay for it, and I don't hear anyone asking students to pay more during this economic downturn.

As for salary and benefits, Stanford has GREAT benefits and competitive salary and not just for the people on the top. It benefits the "little people" at Stanford who make things run (staff, administration, services) to have a place where they can happily work and not worry about not having health insurance, or time off or the millions of other ways we are aided as a community, like tuition reimbursement programs to continue schooling, health programs giving us discounts on health and nutrition classes, free or discounted career and finance consultations, curriculum for on-the-job training.

I applaud the president and provost for showing a personal commitment towards the economic tightening. It may also be worthy to note that right now that there has been no mentioning of lower level staff (those "little people") taking pay cuts at all.


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