University of Michigan hires presidential search firm; budgets $350,000 for hunt
The University of Michigan Board of Regents has hired a search firm to assist in finding President Mary Sue Coleman's replacement.
University of Michigan Regent Larry Deitch gave an update on the presidential search during a board meeting on Thursday, June 20, 2013 at the Michigan Union.
Melanie Maxwell | AnnArbor.com
U-M will pay the firm $300,000 and is budgeting an additional $50,000 for expenses.
"A presidential search involves two aspects: search and recruitment because it’s not a big pool of people in this country who can lead a complex place like Michigan," U-M Board of Regents chair Larry Deitch said in an interview. "So you need the professional expertise to talk to people, find candidates, vet them, reference them. So that’s why you go out to a search firm."
Deitch said he considers picking a U-M president the most important job of the school's eight-member governing board.
The process, however, can be tricky. Possible candidates don't want to make it known they're looking to move on from their current institutions.
Some candidates aren't even looking— which was the case with Coleman prior to coming to U-M in 2002. While president of the University of Iowa she was contacted by U-M's search firm at the time and asked if she would be interested in the position.
University of Michigan President Mary Sue Coleman listens during a regents meeting on Thursday, June 20, 2013 at the Michigan Union.
Melanie Maxwell | AnnArbor.com
"Part of the job involves recruitment and convincing people that this is a great opportunity, that this is a unique institution, a good place to work," Deitch said. "Because all the people you want have good jobs. Many of them are in places of the country... where there are intangible factors that would make people want to stay where they are."
Regents used a different search firm, the Chicago-based A.T. Kearney, to find Coleman. The 2002 search cost $335,000.
Russell Reynolds Associates has worked with Bucknell University, Connecticut College and several state colleges that are a part of the Association of American Universities in finding presidents and other executive leaders.
The search firm will identify and preliminarily interview candidates and prepare a list of possibilities for the board. The board will then decide who to interview and the search firm will coordinate meetings. U-M's search will be secret until the final candidate is announced and the firm will closely coordinate interviews —which will likely be held outside of Ann Arbor— so they are discrete.
Deitch said that although the board is still discussing the shape of the search, members intend it to be inclusive.
In a two-page request given to regents, a faculty senate committee on university values requested the search for U-M's next president include broad input from professors and an advisory committee that would be able to secretly interview top candidates.
"We clearly recognize that constitutionally it’s the regents responsibility," Deitch said. "But you have to be able to pick a candidate who will be broadly accepted, so that means listening to the different constituencies and getting advice from distinguished faculty."
The search that produced Coleman included a 16-member advisory committee that interviewed candidates. Finalists were whittled down from a list of more than 200 names. However members of that committee said they did not know the regents' final choice until it was publicly announced.
Kellie Woodhouse covers higher education for AnnArbor.com. Reach her at kelliewoodhouse@annarbor.com or 734-623-4602 and follow her on twitter.
Comments
Arborcomment
Mon, Jun 24, 2013 : 2:52 a.m.
$50k for expenses? Does the Denny's/IHOP whatever it was in Toledo really run that steep?
Lyn Barron
Sun, Jun 23, 2013 : 6:36 p.m.
I wonder what the 'faculty senate committee' listed as the University's values. It seems that they value keeping secrets so as not to let the public know their mistakes. Rick Boothman has been quoted many times saying that the Umich admits their mistakes and say they are sorry. No one said they were sorry to me after my Mom was wrongfully discharged on the eve. of the first anniversary of her mother's death and died that day. If fact they tried covering it up in the chart. I am writing this so people will be aware of things that may happen to their loved ones in a hospital. I had been very proud to be an employee of Umich for many years. When people get raises and promotions for doing things intentionally to hurt people, something has to change. I think my Mom's incident was an accident and I did not even attempt to sue. HR contacting my State Farm Insurance and telling them things like I was on workman's comp a few times. (untrue, I have never been on workman's comp), that I was on a disability leave that was NOT physical, and I had a history with them- my history includes ONLY excellent evaluations. This HR person eventually got a raise and promotion. see www.google.com sheri barron on vimeo. I do not want this to ever happen to anyone else. Please hire a President that is going to prevent this from happening to anyone else. Since I was not getting paid I lost my house to foreclosure. This did not only hurt me but my whole family. Thank you.
Lyn Barron
Mon, Jun 24, 2013 : 3:01 a.m.
I have to make a correction to the above statement. I do not know if Umich gives promotions and raises to people for doing wrongful things. I do know that some of these people get promotions and raises after doing terrible things. I hope the new Pres. will change how the 'higher ups' can seem to get away with this type of behavior. Umich is an important part of Michigan. I think they can do better.
trespass
Sun, Jun 23, 2013 : 6:05 p.m.
Why hire a consulting firm? This way the firm can retain all of the documents so that they will not be subject to FOIA requests. The NCAA investigation of the football team was done the same way. They set up an FTP site where the university officials could look at the documents but never take possession of them, so they could not be FOIA'ed. Kelly, why don't you ask some questions about that since it will affect your ability to report on the search, even when it is completed.
Jay Thomas
Sun, Jun 23, 2013 : 2:44 p.m.
There should be term limits on how long the regents can serve. Larry Deitch has been there for twenty something years and is now part of the furniture.
David
Sun, Jun 23, 2013 : 3:01 p.m.
IMO: The (re)elected U-M Regents most often ride in on the coattails of the victorious national (party) candidates/trends via straight-ticket voting. i.e. little attention is actually paid to any particular U-M regental candidate. But since this office is a huge public/state responsibility I cannot object to direct democracy. We can throw any 'bum' out...if 'we the people' really want to.
Lyn Barron
Sun, Jun 23, 2013 : 3:01 a.m.
I hope the 'firm' is not connected to the University at all. I feel that most of the 'higher ups' stick together. Sometimes it seems that people get promoted for doing terrible things. I would love to have faith in the University again.
Halter
Sun, Jun 23, 2013 : 12:09 a.m.
Want to save 349,950 bucks? An ad in the Chronicle of Higher Ed costs 50 bucks. You already have the staff in place to whittle down the top 20 candidates...
Allencic
Sat, Jun 22, 2013 : 11:26 p.m.
I know how to save all but a few bucks of that $350K. Just put a "Help Wanted" ad on this site and a few other newspapers. I'll bet that would bring as many good candidates as this silly nationwide search. Can't hurt, give it a try.
Homeland Conspiracy
Sat, Jun 22, 2013 : 10:20 p.m.
*Grabs a dart, throws it at a wall of names....Laughs all the way to the bank!!!!*
Laurie Barrett
Sat, Jun 22, 2013 : 8:19 p.m.
Hire the Earlham guy.
UloveM
Sat, Jun 22, 2013 : 7:37 p.m.
I hope the new UM president will be better respected by all the chairmen, vice chairmen at our UM Medical School.
David
Sat, Jun 22, 2013 : 5:26 p.m.
It's going to be Theresa Sullivan. Now write me a check...
Arborcomment
Mon, Jun 24, 2013 : 2:48 a.m.
Not more of same - we went through this before David. Her tenure at UVA is NOT what we need here - despite the three stooges approach by UVA regent equlivants, very valid points were raised during her attempted ouster; which we discussed previously. Besides, now that she has a nice moat at UVA, why leave?
Tex Treeder
Sun, Jun 23, 2013 : 4:15 a.m.
I'm betting David is right. Unfortunately.
Jay Thomas
Sat, Jun 22, 2013 : 1:48 p.m.
The board is anxious and can't wait for the new President to get here. Without that person's decisions for them to rubberstamp they wouldn't have much to do.
Jay Thomas
Sun, Jun 23, 2013 : 3:09 a.m.
Well, those are examples of corporate governance and the CEO is not only the founder but a major investor. Close but not an exact comparison by any means. The thing is, the regents are elected via a political process, so you would think there would be more input from that angle. Meanwhile, they let Mary Sue decide what the University's policy should be on overtly political things (like affirmative action).
johnnya2
Sat, Jun 22, 2013 : 3:52 p.m.
In MOST organizations, the board HIRES people to do their due diligence. Hiring the right person is exactly what the board is in charge of doing. If they find somebody who is like minded and has the same desires to run the U as they want, then yes, they will agree more often than not with them. Kind of like when the board of directors at Apple did what Steve Jobs wanted. The board at Berkshire listens to Warren Buffett.
Jim Osborn
Sat, Jun 22, 2013 : 12:25 p.m.
At least the regents get more their money than the AAPS, Coleman stuck around for 14 years, not 2 like Green. UM does not have such a revolving door.
Bill
Sat, Jun 22, 2013 : 12:46 p.m.
I think it would be difficult to find many similarities between Coleman and Green other than both are women. Coleman is well respected within her profession and by business leadership. Coleman is outgoing and by her manner demands respect. Coleman is publicly visible. Coleman more than fulfilled her contractual obligation with UM.
gerald Grzesik
Sat, Jun 22, 2013 : 12:03 p.m.
Now we know why they have to have student loans!
GoNavy
Sat, Jun 22, 2013 : 11:39 a.m.
$350k eh? Let's think about that for a moment. Say for that money we get a smart guy working for us (yes, just one guy). This guy is so smart that his salary at the firm we hire is $100k. This man works 40 hours a week, meaning his time is worth $50/hr. At $350k, we're hiring this guy to do 7,000 hours of work for us. 7,000 hours of work - that's 3 1/2 people working full-time for an entire year, by the way - to find our special purple unicorn. Do you think a background check really involves that much work? Do we think that perhaps the University, in its ongoing and relentless quest not to let one penny go to waste, could have worked to find a candidate internally, rather than to outsource this work?
Arborcomment
Mon, Jun 24, 2013 : 3:52 a.m.
@Blue85, you raise valid points on the size and scope of University responsibilities, budget span, and the job. However #1: if "trespass" is correct, the incumbent was supposed to be grooming an internal candidate - thus reducing the need for a high priced head hunter. If this did not happen, can we therefore assume a $350k reduction in MSC salary? We both know the answer to that. However #2: In general, GoNavy may be commenting on the cycle we are now jumping on (again): the way too high priced "search" and salary escalation bidding war with sometime dubious results because it's just too special of a job (or whatever). However #3 somewhat related, but more to the point of your comments on this thread and others: A perusal of your past comments on other stories (for example, emminant domain, hospital resident with child porn) finds you very knowledgable of University financial operations - and exclusively taking the UM "side" in any comments exclusively related to the UM. That's your call. But I'm also both "blue" and "'85" as a graduate, in fact have a parent that's a professor emeritus - so I bleed blue. somehow I must have missed the Sycophant 101 course or indoctrination someplace. We can do better than this with both a search and goals for our University.
blue85
Sat, Jun 22, 2013 : 5:21 p.m.
":Given your undoubted expertise, what should this job pay? How low is your offer and what are the risks that it might imply?" Ok, now I get it, after the first 500 words, you didnt' understand that "this job" referred to the search firm. Here are the possibilities: 1) the first 500 words didn't set the context for you...maybe that is my fault; 2) your literacy isn't quite what it should be; 3) You didn't read that paragraph as a direct challenge to your skills, i.e., if it is so easy to measure the skills required, thus validating your point, and undercutting the need for a search firm, WHAT IS YOUR EXPERT OPINION SUCH THAT WE CAN SAVE THE MONEY, NOT WHAT SHOULD THE PREZ BE PAIDj; 4) since I asked for your offer (i.e., at what rate you would offer YOUR SERVICES FOR THE JOB UNDER DISCUSSION, THAT OF DOING THE SEARCH) I'm going with all of the above. Feel free to select the blend of explanations.
blue85
Sat, Jun 22, 2013 : 5:16 p.m.
1.) "Having worked at more than one i-bank, I know that your number is idealized." Having worked at 5, 3 of the top in the world, I'm saying that top slots require top comp. Searching for leverage for the top spot shouldn't offer an arbitrage, you should expect it to be expensive. Yes, the idealization is that this is one of the top 10 jobs in academia, roughly, so idealization is appropriate. 2) "Also, $350k is a lot of money *anywhere* - you don't need to live in NYC (which I did) to realize that." For one person, but not for a team and for committee meetings. 3)"Longshoremen and unionized auto workers are both paid too much, and earn as much as they do more through monopolistic control over labor than through any other factor." So what, you offer a vacuous tautology: the market is what it is because it violates some principal of perfect competition. Hate to tell you but competition is never perfect. This is one of those cases. 4) "The President of the University is primarily the fundraiser in chief. She doesn't "oversee 40,000 employees" any more than the Commander In Chief commands 1 million men at arms." Yes, but the top of the house hires those who hire those who hire those who hire. This is at the kernel of every organization. That is the President's role. That is not the place to save money. That would be penny wise and pound foolish. 5) "What should this job pay"? That wasn't the point of the article, was it blue? The point of the article (and my post) was the cost of the search firm needed to fill the position." Reread my note: I exactly address not the President's comp, but the comp of the search firm. I'll reread as well to see if there was slippage. Even if so, the point stands: saving money here might cost buckets more later. True or false?
johnnya2
Sat, Jun 22, 2013 : 3:48 p.m.
@ GoNavy, Are you serious? Let's look at it this way. Your OWN admission is that the person is fundraiser in chief. The board spent $335k last time. In the years since 2002, has fundraising to the U increased by over $335k during that time? I will submit that the INITIAL investment paid off far more than $335k In fact, add up EVERY penny ever spent on Mary Sue Coleman including salary and benefits and the fundraising as far eclipsed those paltry numbers. You may not like her, but YOUR metric for performance is what we are talking about here. I think there is far more to being the president of a University than fundraising, and with that mentality I suppose Warren Buffett is just a CEO and it is really his managers who set the direction of the company. Steve Jobs did not direct Apple to become the most valuable company on the planet. Yeah any person can do the job NOT
GoNavy
Sat, Jun 22, 2013 : 2:48 p.m.
@blue85: 1.) Having worked at more than one i-bank, I know that your number is idealized. For every 3rd year making $350k "all in", 8 other Ross School of Business grads didn't make it to that level and were cut. They're now working as assistant VP of marketing in Cleveland and are making a lot less than $350k. Also, $350k is a lot of money *anywhere* - you don't need to live in NYC (which I did) to realize that. 2.)Longshoremen and unionized auto workers are both paid too much, and earn as much as they do more through monopolistic control over labor than through any other factor. 3,4,5) The President of the University is primarily the fundraiser in chief. She doesn't "oversee 40,000 employees" any more than the Commander In Chief commands 1 million men at arms. In other words, he's at the top of the org chart, but he's not giving anything more than the broad marching orders. Like the military, the University has *real* managers to take care of day-to-day business. By the way, they are also highly compensated. "What should this job pay"? That wasn't the point of the article, was it blue? The point of the article (and my post) was the cost of the search firm needed to fill the position.
jpud
Sat, Jun 22, 2013 : 2:17 p.m.
Your analysis implies that someone would search for the next President wandering down the street while collecting an hourly wage. The 350K fee does not go to salaries alone. Any search firm has overhead: rent, phones, internet, professional societies, and so on. There are costs associated with assembling informational documents about candidates and the position to communicate with the Regents and prospective President. The fee might include flights, hotels, meals as the firm travels to discuss the opportunity in a National search and vet candidates. Money spent vetting candidates and finding a wonderful fit, as well as convincing the Regents to make the best hire is money well spent if a Rich Rod like hire can be avoided...
blue85
Sat, Jun 22, 2013 : 2:16 p.m.
"$350k eh? Let's think about that for a moment. Say for that money we get a smart guy working for us (yes, just one guy). This guy is so smart that his salary at the firm we hire is $100k. This man works 40 hours a week, meaning his time is worth $50/hr. At $350k, we're hiring this guy to do 7,000 hours of work for us. 7,000 hours of work - that's 3 1/2 people working full-time for an entire year, " 1) you need to get out of the mid-west more often: 350K is a 3rd year ex-bschool I-bank total comp package; 2) $50/hr is roughly what a longshoreman makes on the California docks and roughly, what 2X a former fully loaded union auto worker job; 3) The firm this person works for will bill his time and pay him comp, so the $350K is the all-in expense; 4) Having a weak President might cost many millions in lost/opportunity costs: weak instructional hires at tenured level alone could cost millions; inability to raise funds...millions; so, as usual, the focus here is on the cost, not the revenue, or potential foregone revenue; 5) The President of UM manages, however indirectly: 40,000 staff; 50,000 students; $5,000,000,000 in real estate; $6,000,000,000 a year in budget; $8,500,000,000 in endowment; $1,250,000,000 in research budget. This is a huge job and getting it wrong would be very expensive and potentially reputationally damaging. Given your undoubted expertise, what should this job pay? How low is your offer and what are the risks that it might imply?
Cornelius Nestor
Sat, Jun 22, 2013 : 12:38 p.m.
We often hear of corporate greed as though there were no such thing as government greed. Do we have it here?
Jim Osborn
Sat, Jun 22, 2013 : 12:26 p.m.
Someone is making a pile of money, at a great hourly rate.
Goober
Sat, Jun 22, 2013 : 11:05 a.m.
Spending this amount of money is obscene. Go figure!
trespass
Sat, Jun 22, 2013 : 11:02 a.m.
President Coleman's last contract stated that she was to develop internal candidates for the President's position and that her last year would be a transition year, where she would show the new President the ropes. This seems to be a change of direction by the Board of Regents. I wonder if this change was brought about by the departure of Provost Phil Hanlon. The General Counsel also advised the Board last year that they must eliminate the mandatory retirement age for the President at 70. This all makes me wonder if the departure of President Coleman was unexpected. I sure would like to see the report of the external investigation of the child pornography scandal.
Lyn Barron
Mon, Jun 24, 2013 : 1:05 a.m.
You seem to know more about how the Umich works on this subject and all subjects involving Umich, than most people. I think you should help make up the list for the 'values' the new Pres. should have. If you do not get that job could you be my expert witness? seriously.
Sparty
Sun, Jun 23, 2013 : 9:30 p.m.
Mandatory retirement is generally unlawful in the United States, except in certain industries and occupations that are regulated by law, and are often part of the government (such as military service and federal police agencies, such as the Federal Bureau of Investigation. From the U.S. Equal Employment Opportunity Commission Website: The Age Discrimination in Employment Act of 1967 (ADEA) protects individuals who are 40 years of age or older from employment discrimination based on age. The ADEA's protections apply to both employees and job applicants. Under the ADEA, it is unlawful to discriminate against a person because of his/her age with respect to any term, condition, or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training. From the U.S. Code of Federal Regulations discussing the Age Discrimination in Employment Act: ...one of the original purposes of this provision, namely, that the exception does not authorize an employer to require or permit involuntary retirement of an employee within the protected age group on account of age, ...an employer can no longer force retirement or otherwise discriminate on the basis of age against an individual because (s)he is 70 or older. Certain professions examples: Pilots: the mandatory retirement age of airline pilots is 65. The Fair Treatment for Experienced Pilots Act (Public Law 110-135) went into effect on December 13, 2007. Air traffic controllers: Mandatory retirement age of 56, with exceptions up to age 61 Federal law enforcement officers, national park rangers and firefighters: Mandatory retirement age of 57, or later if less than 20 years of service Florida Supreme Court justices: The Florida Constitution establishes mandatory retirement at age 70. New Jersey Supreme Court also established mandatory retirement at age 70.
trespass
Sat, Jun 22, 2013 : 10:53 p.m.
The mandatory retirement age for every judge in Michigan's state courts is 70. If it is illegal then the courts are violating the law.
Sparty
Sat, Jun 22, 2013 : 5:50 p.m.
The General Counsel also advised the Board last year that they must eliminate the mandatory retirement age for the President at 70. The reason for this presumably is that they are illegal, given that the lawyers said to remove it !
Jay Thomas
Sat, Jun 22, 2013 : 1:40 p.m.
If ordinary employees face a mandatory retirement age... then so should the President.
A2comments
Sat, Jun 22, 2013 : 10:18 a.m.
Most retained searches are charged as a percentage of the first year compensation, often 30%, plus expenses. Therefore, the fee listed may be more, or less, depending on the final package.