THIS ISN’T GETTYSBURG

The following is an email written by University of Kentucky Professor of Finance Joe Peek. His words speak much better than mine to this topic.

DISCLAIMER: The views stated herein are those of the author, and do not necessarily reflect the views of members of the UK Board of Trustees or Administration.

CLAIMER: Usually, but not always, when someone says “I told you so,” they do so with some degree of self-satisfaction and a minimal degree of enjoyment. This is one of the usual cases.

ACKNOWLEDGEMENT OF THANKS: I would like to thank the Herald-Leader and the UK Administration for the timing of the front page articles on Wednesday (Todd bonus) and Thursday (Boone-doggle Center). I have been out of the country for the past 3 ½ weeks and am leaving again tomorrow for another week. Thus, these two days of headlines appeared on the only two days during a five-week period in which I was in town to read them. Makes me appreciate just how much I miss this place.

NOTE: Unlike the UK Administration, I try to be responsive to faculty comments and views. In response to numerous requests, I am attempting to be a bit more subtle. However, it is a learning process, since I am severely subtlety-impaired (I am also subtitle impaired, since foreign languages are among my many areas of in-expertise).

FEELINGS

After having a few days to contemplate their decision about the President’s bonus, do you think that any of the members of the Board of Trustees are feeling a bit sheepish? (Please note the lack of bold font in an effort to be more subtle.) Note that many have attributed the awarding of the bonus by the trustees, and the acceptance of most of the bonus by President Todd, to an ID-ten-T error. (Hint: subtlety at work; write it out using numbers.)

THIS ISN’T GETTYSBURG

President Lincoln’s famous reference to “government of the people, by the people, for the people” has been changed at UK to “governance of the administration, by the administration, for the administration.”

Self-serving decisions are the norm at UK, at the expense of faculty, staff, and students. At least in President Todd’s acceptance speech for his bonus, he touted the self-sacrifice shown by the faculty and staff accepting zero percent salary increments in these difficult financial times.

However, such behavior and attitudes are present not only at the top of the UK administration; they are pervasive throughout the administration structure. As an example, I give you my own Gatton College. After six months of repeated efforts to obtain information on the awarding of the January merit increments to Gatton faculty, I have finally received an accounting. In addition, to a set of “compression and inversion” adjustments, 11 adjustments were awarded to “top performers” among the faculty. Of these 11 adjustments, five went to non-administration faculty (that is, 5 out of about 80 such faculty) and six went to faculty that were also college administrators (that is, 6 out of 6). Any wonder why we have such a lack of transparency at UK?

SEE BLUE? SEE BLURRED!

In such dire financial times, surely there must be a better use for the $95,500 bonus accepted by President Todd. Perhaps the funds could have been used for student aid to offset the tuition increase for some students; or to lessen the impact of layoffs; or to fund faculty research efforts.

Alternatively, think of how much beer could be purchased at Pazzo’s next Friday night for faculty. Then, perhaps many of the faculty could have the same blurred vision as our administrators.

GRADE INFLATION

Grade inflation is a well-known problem at universities. However, usually the worst occurrences are associated with student grades. At UK, we are breaking new ground. Here, our Board of Trustees has inflated President Todd’s grade to a near perfect score of 96.8. Unsurprisingly, his lowest score was for the category of “improving communications with students, faculty, staff and trustees.” Apparently, it is still not well understood that communication is bidirectional. Weak communication problems are not solved by sending out more memos, but by actually listening to the stakeholders in the university.


HOUSTON, WE HAVE A PROBLEM

At least one of the three of us (you, me, President Todd) do not have a firm grasp of reality; but I am not sure just who. The UK Administration emphasizes form over substance. Thus, it would seem that accepting most of a $145,000 bonus at a time of soaring tuition, layoffs, and zero raises for faculty and staff would be a public relations disaster. However, we are reminded by the UK publicity staff that President Todd’s salary trailed nine of his peer’s salaries at 19 benchmark universities. Still, this is just the public funds part of his salary, and, I am sure inadvertently, they forgot to provide the ranking of UK faculty salaries relative to those same 19 benchmark universities. So why am I not sure just who is out of touch?

Simply because the reality is that decisions are made over and over by the UK Administration that are not in the interests of university stakeholders, yet the UK Administration is allowed to get away with it, although in some instances they first must weather a brief and ineffective protest (e.g., renovation of the Boone-doggle Center); but perhaps I am being too cynical here.

A REPRESENTATIVE VIEW

The Herald-Leader reports that faculty trustee Ernie Yanarella thinks that there will be “some diffuse irritation among faculty about Todd’s salary and bonus.” He continues, stating that, “The faculty who are cynically minded will be crabby about it.” First, why would UK faculty become cynical? OK, maybe a few. Well, I suggest that all three of us (among the 1,900 UK faculty) who have become cynical and crabby send President Todd an email suggesting that he did not make an intelligent decision when he accepted most of the bonus. The Herald-Leader reports that President Todd appears to receive few complaints about his policies, quoting President Todd as stating, “I don’t think I’ve had an email yet—maybe one or two—about not giving a raise.” And in your letter, you should pledge your entire 2008 faculty raise to a fund intended to make up the shortfall of President Todd’s $150,000 bonus.

A FINAL THOUGHT

While the UK Administration may not appreciate the faculty or entertain their views, at least they do entertain with their statements and actions.


Joe Peek
Professor of FinanceGatton Endowed Chair in International Banking and Financial Economics School of Management