John Silber Rides into the Sunset with $7 Million Dollars More
And we take a look at an article from 1993 that shows the Boston University president as the pioneer of the catch-me-if-you-can CEO style of nonprofit leadership.
The New York Times, Boston Globe, and others are reporting on the $7 million payout, though the Globe has the best explanation of what it includes. Mr. Silber had an arrangement by which he worked through sabbatical years, taking a year's extra pay instead. Like an accountant who never takes a vacation, this sort of practice works against effective internal controls.
There is little question that Mr. Silber was instrumental in making BU an outstanding research institution in a city already crowded with national institutions. But before his fall, William Aramony was responsible for a similar transformation of United Way from a community chest to a full-fledged partner of corporate America. Mr. Aramony spent eight years in jail, though, and Mr. Silber just retires.
There is a fascinating article from the 1993 Chronicle of Higher Education that provides a glimpse into Mr. Silber's activities at the same period when William Aramony was under investigation:
- There were at least three low- or no-interest loans from the University to Mr. Silber, one of which he used to buy a rental property from the University.
- Not all of the trustees were aware of the arrangement whereby Mr. Silber received the extra year's pay
- Trustees regularly received significant contracts from the University, including trustees sitting on the compensation committee
- A conflict-of-interest review was conducted by the University's regular auditor, which had received nearly a half-million dollars in the year of the review
- An investment group was created that included as partners the University, its Treasurer, and 10 trustees and employees of the University
- The University invested heavily in a company in which Mr. Silber was a director and owner of 105,000 shares
- The University conflict of interest policy required only disclosure. If a relationship was disclosed, it was allowed.
This was a decade before Enron, but it shows the CEO culture in full flower—in a university setting. And over a decade later, Mr. Silber is leaving unscathed.
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