Last year, as unionized University of Minnesota workers fought for 1.5% pay bumps, President Joan Gabel received a significant—and contentious—raise that will make her the first U leader to pull a $1M+ salary. By 2023, her pay package will include: $706,000 base pay, $250,000 retirement contribution, $100,000 "performance pay" bonus, $10,000 car allowance, and $15,000 for an "executive physical." University presidents are also contractually obligated to live gratis in the 10,000-square-foot Eastcliff mansion.
It's apparently not enough.
On Friday, the U of M Board of Regents voted 9-3 to green-light Gabel's invitation to join Securian Financial's board of directors, provided she agrees to conflict of interest disclosure terms. Gabel's compensation for four annual in-person Securian meetings and several lunch-hour calls? About $130,000, the fourth-year president told the Strib. The conflicts are numerous. The U pays Securian around $4.6 million each year for employee life insurance, and the St. Paul-headquartered firm manages $1.3 billion in "legacy [retirement] business" with the U.
Ahead of Friday's vote, Sen. John Marty (DFL-Roseville) issued a last-minute plea to the regents urging them to not allow Gabel to join Securian.
"The letter you received from the conflict-of-interest review panel describes it as a conflict that most—but not all—panel members believe could be managed 'in fact'—though they explicitly state that there is no way to eliminate all perception of influence," reads Marty's letter, which was shared with Racket. "The regents have provided exceedingly generous compensation for the university president. It is reasonable, in exchange, that the president devote 100% of her employment energies to the university. It is not in the University of Minnesota’s interest to have the president moonlighting for additional compensation on a corporate board, especially one that has business dealings with the university... This sets a terrible precedent and is harmful for both policy and PR reasons."
Those lousy optics look even worse when one considers: The U's financially strapped adjunct professors, rising tuition costs crushing students with debt, and dwindling athletic offerings. Not to mention the shaky financial future of the very mansion in which U of M presidents have lived since 1961.
“The die is cast. The speeches were already written, the votes were already in place before we even had this conversation,” Darrin Rosha, who served on the Board of Regents from 1989 to 1995 before rejoining in 2015, tells Racket. “This was so stunningly disappointing. The negative impact on the university, and its reputation and perception, would’ve prevented this from even being considered by [the board in the ‘90s].”
Outgoing Board of Regents VP Steve Sviggum, who you might remember from his recent "too much diversity" controversy, expressed zero concerns over the matter at Friday's meeting. In fact, he finds the COI language "too restrictive," adding, "if we let everyone know, that takes care of it." Board Chair Ken Powell predicts the arrangement would not render Securian more attractive during future bids for the U's business; he thinks Gabel's appointment would "actually make her a better president," with regard to donor relations and the development of biz skills.
Almost one-third of public university presidents are on corporate boards, Inside Higher Ed reported in 2016, though not all of those positions are paid and, more importantly, not all of them present company-campus financial entanglements. Gabel already sits on nine non-corporate boards, according to her résumé.
"Chair Powell is absolutely corporatizing the institution, and this is a guy who made $20 million a year for his last how many years at General Mills," says Rosha, one of three regents who voted against Gabel's Securian gig. "The fact that I and a couple of colleagues can be considered pariahs because we're speaking out on behalf of the university's core mission? It's just stunning. That was the feeling [on Friday]: Like, is this really happening?"
At the core of the Gabel issue: Why would a lavishly compensated individual, one with a rarified position heading a public institution, risk forever tarnishing their credibility for $130K? In the media, almost nobody is asking that question. Or any questions, for that matter. The Star Tribune was the only journalistic outlet to cover the regents' vote.
On Monday, Racket requested an interview with Gabel. We never heard back.