In a budget proposal submitted to the state legislature recently, Governor Andrew Cuomo removed a total of $12 million dollars from the Stony Brook coffers and $55 million from the Stony Brook Hospital budget through 2011-2012. Though, it is too early to see how this decrease will affect any tuition hikes at Stony Brook. However, the community has already seen a proposed increase for the comprehensive fees. One might call this curtailment in funding an opportunity in disguise to see where the administration can be “penny-wise and not pound-foolish.”
Moreover, students, parents and the Stony Brook administration officials are looking for ways to trim the overall budget in any fashion they can. To align the budget with current and future needs in any business is a valid task of any manager.
Conversely, Jack Welch, the former CEO of General Electric, postulated the idea of leading by example. Cuomo cut his personal salary by five percent and asked his senior staff to take a pay cut of five percent from their predecessor’s salary. In Connecticut, Governor Dannel P. Malloy cut his personal staff by 15 percent. Now, it might be President Samuel L. Stanley, Jr.’s turn to lead by example.
Stanley makes $400,000 a year in addition to $100,000 per year from the Research Foundation of the State University of New York and $150,000 annually in compensation or deferred compensation. (Data of May 5, 2009). In comparison, the Governor of New York makes only $179,000, the Lieutenant governor makes $151,500 and the Secretary of the State makes $120,800.
In the private sector, publicly-traded companies like Google, Ford and Apple have paid one dollar in annual salaries to their Chief Executive Officers in recent years. Some of the well-known executives who are members of the “buck-a-year club” include Steve Jobs, founder and CEO of Apple Computer, and Sergey Brin and Larry Page at Google.
Obviously, they are compensated in other ways, usually through stock options or restricted stock. Having such compensation gives the CEOs strong incentives to make sure the company does well. Yet, in a public university setting, there is not stock to offer as a supplement instead of base pay.
As a result, “prudent” executive compensation has been set up during the times of economic prosperity and readjusted in times of recession. Just ask the new president at the University of Connecticut, Susan Herbst, who saw her salary decreased by $50,000 less than what her former predecessor was making.
Although one dollar salaries are an extreme answer to reduced salaries, they serve as examples to the many different options on the table. Stanley and his staff must do their part to help the university during these difficult economic times.
The Stony Brook community should see if Stanley would be willing to reduce his salary from a range of five percent to eight percent and ask his senior staff to take a pay cut as well of five percent. They could also see if he could take a salary equal to the New York Governor’s period of one year.
To be a bit more pliable for these individuals, one percent of the savings should be given back as deferred compensation at the end of year as a note of appreciation.
This concept could have a potential savings of at least $20,000. Imagine how many graduate assistants could be funded with that, or scholarships offered, or new adjacent faculty hired. Or, more importantly, imagine,how many caps and gowns could be given out for free as a result.
Thus, I question why Stanley has yet to follow the example of two New England states that are checking “phone booths for loose change,” and cutting expenses in this recession to help pay for their foreseeable deficits.
I would be the first one to argue that college presidents should be paid commensurate with their experience. However, I further that concessions must be made before increasing revenues.