Harvard Loses Money

On Thursday I posted about how universities and colleges have lined up to receive their share of our tax dollars:

With the Big Three seeking a bailout from Washington, the Big Ten are following suit. Earlier this week the Carnegie Corporation of New York took out a two-page ad in the New York Times, signed by executives of 36 public universities, state university systems and higher-education associations, urging Congress and President-elect Obama to rescue them.

I provided numerous suggestions on how they could save money. One of them was that everyone making over $50,000 take a 10% pay cut and everyone making over $120,000 take and additional 10% cut...

Boy was I a softie.

Harvard Management Company announced Friday that compensation for its five highest-paid officials and former president totaled approximately $26.8 million for the year ending June 30—a turbulent time for both the markets and the company’s leadership.

Former endowment chief Mohamed A. El-Erian earned $921,000, while his five employees earned between $3.9 and $6.4 million each. The total figure represents a significant increase of 20 percent over that of the previous year, which saw total compensation of $22.3 million

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A raise??? Why in the world? I mean, talking about being performance orientated.

Under El-Erian and Kaplan’s tenure, Harvard’s endowment grew from $34.9 billion to a $36.9 billion. In the four months after June 30, the endowment shrunk by 22 percent, or $8 billion—the largest decline in the University’s history—and, with continued losses expected, University officials have yet to disclose its recent performance.

Being an old sales type I can tell you that if your revenue decreased 22% you could expect:

1. To receive no bonus or incentive money.

2. A meeting with HR where your severance package would be explained.

3. If you escaped with your job, which was possible in hard times, expenses, salaries, etc., were controlled so tightly the Controller could tell if it was a penny or dime that someone dropped in front of the snack machine.... just from the sound of it hitting the floor from six offices away.

Many gripe about entertainers making a ton of money. I don't. If they don't fill the seats, sell the CD's, books and videos they become last week's story.

And I haven't complained about the stock brokers making money because they made it by taking a small amount... selling a ticket... from each person.

But since they were rewarded handsomely for their success, I believe they should be penalized for their failure. All compensation above $500,000 should be cut to $400,000.

And if they don't like that, pay'em whatever. Just don't come begging to me for money.

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