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Kerrey: New School pay figures misleading

By   /   May 22, 2012  /   14 Comments

Recently released tax forms show Bob Kerrey received $3 million in compensation from The New School in 2010, the year he resigned as president of the liberal arts school after a tumultuous decade at the helm.

He was president of The New School from 2000 until the end of 2010. He became president emeritus in January 2011. 

The form 990 — which the IRS requires annually — shows Kerrey received $603,000 in base pay, a $1.2 million retention bonus, a $692,000 payout from his retirement plan, $134,000 in deferred compensation and $420,000 in nontaxable benefits.

Kerrey contacted Nebraska Watchdog to note that $603,000 of that was his base pay as president of the school that year and the $420,000 is primarily the annual rental value of the university-owned West Village brownstone he lived in, plus utilities and upkeep.

Of the remaining $2 million, $1.2 million was a bonus he received for staying on with the school through the end of 2010 — even though he was recruited by the Motion Picture Association of America. An outside consultant said that’s how much Kerrey had been underpaid — compared to the market — in prior years, Kerrey said. Politico also reported the $3 million compensation figure.

There’s no doubt Kerrey was well-compensated for his work overseeing the progressive university in downtown Manhattan. The university paid Kerrey $1.3 million in 2009 – making him the fourth highest paid private college president in the state of New York and 21st highest paid in the nation that year, according to the Chronicle of Higher Education.

Kerrey’s pay package has been the subject of controversy on the campus in the heart of Greenwich Village. Kerrey’s successor, David Van Zandt, has been under fire to be more transparent about the school’s finances, including the amount of money being paid to Kerrey and other administrators, according to the New School Free Press. The student newspaper reported that last month Van Zandt declined to disclose how much Kerrey was being paid, and has noted that Kerrey made nearly as much as the president of New York University, even though that school has five times as many students, 10 times as much revenue and 12 times as big an endowment.

Kerrey’s campaign manager, Paul Johnson, dismissed the school newspaper report, saying, “The students never really cared for Bob.”

The newspaper noted that while many universities cut back on administrators’ pay after the Great Recession hit in 2008, The New School went against the trend, with Kerrey’s base pay increasing from $340,000 in 2000 to nearly $688,000 in 2009.

Sam Biederman, a spokesman for The New School, said part of the reason Kerrey’s total pay package seems high is that it includes the cost of his housing in a university-owned home on the west side of Greenwich Village. He said it also serves as an entertaining space.

Biederman defended Kerrey’s $3 million compensation, saying Kerrey led the university through enormous growth – increasing the student body 50 percent, doubling the full-time faculty and increasing fundraising.

“This is not out of the ordinary at a university,” Biederman said. “This sort of package is not uncommon out here.”

Kerrey spearheaded an expansion of the campus with a $352 million, 375,000-square foot building called University Center that will house classrooms, dorms, an auditorium and a library. It’s the largest building project the school has ever undertaken.

“President Kerrey did lead a transformation of this university,” Biederman said.

However, Kerrey’s decade at The New School was hardly smooth: Although he is credited with rebranding and renovating the school, the faculty handed him a no-confidence vote in 2008, students organized sit-ins and called for his removal as he churned through six provosts and the student newspaper knocked him for being tone deaf and far non-transparent. In 2009, 22 students were arrested at a sit-in after Kerrey called in the police.

While Kerrey can continue to collect $400,000 to $600,000 per year in salary and benefits for serving as president emeritus through 2016, the school is battling a budget gap. Enrollment did not grow as expected, leading to a $9 million shortfall in its $330 million budget. The university plans raise tuition rates 2 percent and Van Zandt said in a message to the community that $2.5 million in savings was found by reorganizing the president and provost’s offices. The student newspaper speculated that those savings were found simply by releasing Kerrey and his executive vice president.

Some lay part of the blame for the budget shortfall on Kerrey for putting the school on an unsustainable course. Van Zandt recently said the university will stop relying on rapid enrollment and tuition increases to sustain its budget. In addition, he and his provost took a 5 percent cut to their base pay.

Van Zandt told the student newspaper that after taking over the reins, he quickly saw that the school’s growth projections were unrealistic and began focusing on quality rather than quantity.

Johnson acknowledged Kerrey ruffled some feathers while president but noted that the school’s board of trustees asked him to stay on.

“The school was in great financial shape when Bob left it,” Johnson said. “He ran the place like a business. And yeah, some of the faculty didn’t like the changes that were made. But that’s to be expected in a university setting.”

He said the new president decided to scale back enrollment, which affected the school’s income.

Kerrey said he’s proud of what he accomplished at The New School and although the university is facing “a little trouble financially” today, he said, “We had no financial difficulties through my entire term. None.”

Biederman said Kerrey’s $3 million in 2010 compensation reflects the growth during his decade as president, but he said now the school is facing the same challenges as many other colleges and universities.

“This is a different time,” he said. “We are impacted by the uncertain economy. But The New School remains in very solid financial condition, thanks in large part to President Kerrey’s vision for the university.”

According to the New York Times, Kerrey’s detractors accused him of centralizing power, shutting out faculty and being “autocratic, impulsive and even erratic.”

Kerrey is running for his old U.S. Senate seat representing Nebraska. His Republican opponent, Deb Fischer, is a state senator. Her campaign manager said Kerrey’s $3 million payout is telling.

“This revelation tells Nebraskans all they need to know about this race,” Aaron Trost said. “While Senator Fischer was busy serving Nebraska by passing the largest tax cut in state history, cutting spending and balancing state budgets, Bob Kerrey was making millions in New York City.”

Reported by Deena Winter, deena@nebraskawatchdog.org.

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Deena Winter is a reporter for NebraskaWatchdog.org. Contact her at deena@nebraskawatchdog.org and follow her on Twitter @DeenaNEWatchdog.

  • Charlesp

    What tax cut?

  • http://gerardharbison.blogspot.com Gerard Harbison

    The students never really cared for Bob

    The faculty never cared for Bob either. They voted 72:2 on a no confidence motion. Pretty much nobody at the New School cared for Bob.

    If you were interviewing somebody, and fond out that nobody at his previous job thought he was any good, would you still hire him?

    autocratic, impulsive and even erratic.

    Textbook antisocial personality disorder, high-functioning.

  • Jeff Poley

    Deena:

    It’s odd that you haven’t published Senator Fischer’s income along with Senator Kerrey’s in this story. Are you implying that Senator Fischer had no income in 2011?

    Jeff…

  • Bam

    Another one-percenter who is profiting off of Big Education. Funny how guys who expand their company’s markets and create jobs are called evil profiteers when they get a bonus, but a guy who gets a no-confidence vote from faculty and students and left the school in bad financial shape walks away with millions.

  • Jeff Poley

    Bam:

    According to the article, Sam Biederman of the New School said, “This is a different time, We are impacted by the uncertain economy. But The New School remains in very solid financial condition, thanks in large part to President Kerrey’s vision for the university.” You concluded from the story that the New School was in “bad financial shape” when Senator Kerry left. I presume that since you are an expert on the New School, that you will be requesting that the New School reprimand Mr. Biederman for his misstatement.

    Jeff…

  • Watching From Lincoln

    I think Trost is referring to Dilbit Deb taking money out of the education fund to pay for roads in western Nebraska as “balancing the budget”. She also “served” Nebraskans by making sure that pipeline companies were NOT on the list of corporations that could not use eminent domain proceedings against Nebraska landowners when she rewrote and “strengthened” our state’s eminent domain laws, screwing all her “fellow ranchers” in the process, but she got her cut of money from her political backers for doing it, so why should she care? Her balanced budget will of course will provide plenty of cheap labor jobs pushing a shovel when our under-educated youth can’t make it into post secondary education nor find a skilled job because of their sub-par, underfunded education. Of course Dilbit Deb will have her hand out every year to snatch her entitlement subsidy check as a “rancher” who can’t tell a steer from a heifer, but sure can tell a great scam to get free Federal money to support her when she sees it.

  • Truth-or-Dare

    Maybe I missed it . . . Did Deb get a $3 million dollar compensation pay-out when she left the State Legislature???? Or did one of her MANY billionaire friends give her a gift that just keeps on giving? Gosh, if I had known that is what she could reap from Nebraska taxpayers after a few years of government service, I would have been running for that office myself!!!

    Jeff, if you want to know and feel the urge to publish Deb’s income from last year, then her tax returns are provided for your inspection. All you have to do is be BRAVE, make the request, and then pay SOMEONE to interpret the info for you!!! But I dare say, I hardly think her miniscule income will begin to compare with Good Old Bob’s . . . . one has to wonder WHY he decided to give in to the pressure of the “Dem powers that be” to run for office when it is SOOOO obvious that he was doing swimmingly well in New York!!!

    That sneaky little Harry Reid . . . . what could he possibly offer GOB to get him to run for the Senate??? An overseas appointment, three weekend stays in the Lincoln bedroom at the White House, health care for life, double his government retirement for life . . . WHAT.???? Boy I just can’t wait until SOMEONE finally asks him what the tipping point was . . . he said he would share with us, and we are waiting with bated breath for the juicy details!!! Who cares how much $$$$ Fischer made when we know the real meat in hidden under the carpet in GOB’s living room . . . . WHEREVER that is – New York, Nebraska, New Zealand . . . it’s all the same thing, right???

    Oh Crapola . . . . does that make GOB one of the 1% that the President loves to hate and talk bad about? Maybe he can donate a million to the campaign like BIll Maher did and become a real celebrity!!!

  • Bam

    Ah, Jeff Poley, I can see you are a big fan of selective reading. You conveniently missed the part in the story about the budget gap the school faces, with the $9 million shortfall and the forced tuition increase, and the forced reorganization of the president and provost’s offices, with the resulting savings found “simply by releasing Kerrey and his executive vice president.”

    If you’d bothered to read it, you could have saved yourself time AND embarrassment!

  • Truth-or-Dare

    Okay Bam, you should take it easy on Jeff and cut him some slack . . . no need to be so direct and straight forward like he should have KNOWN what ALL the article said!!! After all, that kind of comprehension and analysis probably escaped him unless he some kind of a financial guru!!! Remember , you WERE talking about shortfalls, tuition increases, forced reogranization . . . all unfamiliar concepts in this day and age!

    Lighten up on the brain-washed liberals . . . we need save some of our energy to fight another battle another day!!!!!

  • Dave Fall

    Silly Partisans! Bob is a good businessman. Negotiated a nice retirement package.

  • http://gerardharbison.blogspot.com Gerard Harbison

    The real payoff came last year, when Kerrey was paid a couple of million for nebulous services by two rich Democrat donors.

    Still, compare Kerrey’s salary with JB Milliken’s and who’s been the more successful president?

  • TexasAnnie

    Compare the “success” of Kerrey and Milliken? Well I guess that would be Kerrey. (He got paid more.) Should we enter into a semantic battleground defining “success,” RWP? Or should the taxpayers render more to Milliken?

    How about this idea: All Institutions of Higher Education Should Be Privately Funded!

  • http://gerardharbison.blogspot.com Gerard Harbison

    University of Nebraska system

    Students 50,000

    Faculty 5,000

    External Research Funding $0.25 bn.

    Presidential salary, 2010 $400 k

    New School

    Students 9,300

    Faculty 1,000

    External Research Funding: minimal

    Presidential salary, 2010 $3 m

    Kerrey’s a greedy b@57ard

  • A Student

    Paul Johnson is proud of everything that was wrong with Bob Kerrey’s tenure at the New School: He has the gall to state that Kerry led the organization, which was not a business, “like a business.” And when people pointed out the problems with Kerry’s approach, as even Johnson now says, it was just too darn bad. (“[T]hat’s to be expected in a university setting.”)

    If you don’t care what a university is like, why try to lead one?

    I’ve got news for you, Paul: The Senate is not a business, either. The Senate is a public body, and if Kerrey is elected to it, he will do exactly what he did at the New School. He will set up a bunch of people to cover for him (just like the board at the New School, who owed their positions to him), and everyone else will be told to get lost.

    If Kerrey wants to go into business, let him go into business. But, we might also remember that he has no business head, either. His leadership of the New School was based entirely on generating cash flow, and almost never on investment. (Unless, of course, he could put up a new building, which would serve as a monument to his reign.)

    All he wants is attention.

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