Cornhuskers Stuck w/NELNET Debt ~ Meanwhile, Million-Dollar Milliken Amasses Wealth on Taxpayer Dime

June 2, 2013

Uncategorized

Milliken earns an additional $129,000 with role at Valmont
By Leslie Reed
WORLD-HERALD BUREAU
 LINCOLN — University of Nebraska President J.B. Milliken added more than $129,000 to his income last year by serving on the Valmont Industries Inc. board of directors.

The appointment came more than a year and a half after Valmont founder Robert Daugherty gave $50 million to NU to establish an international research center focusing on the worldwide use of water for agriculture. Valmont is the world’s largest manufacturer of center-pivot irrigation.

While a growing number of university presidents and chancellors serve on corporate boards, the practice is controversial. Some say it is fraught with potential conflicts of interest. One example: A corporate board member has to worry about profits, while a public university president is responsible to taxpayers, faculty and students.

“When you’re on the board of a for-profit corporation, your duty is to the shareholders,” said Randy Ferlic, a former NU Board of Regents member. “You could end up in conflict with the research.” [Ivy Harper writing here: Why is former NU Randy Ferlic – along with Regents Whitehouse + Hawks who still seem to care about the concept of “Public Servant.”

But being on a corporate board can also be a boon to higher education leaders, particularly those who run large public universities.

“Economic development is a significant part of their job. Understanding the business community and having credibility with it is very helpful,” said Peter McPherson, who served on the Dow Jones board of directors while he was president of Michigan State University from 1993 to 2004. He received about $100,000 per year for that corporate slot.

Milliken, in a prepared statement, said he believes being on the Valmont board helps NU and makes him a better university president.

PAID BOARD POSITIONS

A recent survey by the Chronicle of Higher Education showed that out of the 50 U.S. colleges with the largest endowments, 17 presidents held paid positions on corporate boards in 2011. Some held multiple board positions, and four reported more than a half-million dollars in compensation from their board service. Four current or former Big Ten presidents included on the Chronicle’s list received earnings from their board service:

Mary Sue Coleman of Michigan received $425,388 for serving on the Johnson & Johnson and Meredith Corp. boards

Morton O. Schapiro of Northwestern received $205,000 for serving on the board of Marsh & McLennan Cos.

E. Gordon Gee of Ohio State received $200,132 for serving on the boards of Bob Evans Farms Inc. and Hasbro Inc.

France A. Córdova of Purdue received $445,275 for serving on SAIC Inc. and Edison International boards.

“Obviously I do not believe there is a conflict of interest, nor does the Board of Regents,” Milliken said in an email to The World-Herald.

Irrigation permeates NU’s research and education endeavor. Scores of faculty members have participated in grant-funded research on topics ranging from irrigated land values to groundwater recharge rates to the use of recycled water for irrigation. Economists and law professors study water policy impacts. Business professors at UNL and the University of Nebraska at Omaha have aided in trade issues involving irrigation equipment. Extension educators assist farmers in selecting and using irrigation equipment.

With the $50 million gift from Daugherty — made in 2010 before the Valmont founder died — NU initiated a multicampus effort to establish itself as an international player in water policy and irrigation research.

The money Milliken makes from his board work is an additional 19 percent above the $688,000 NU paid him in 2011-12 in total compensation.

When Milliken sought permission to accept the board position, regents at the time said their biggest concern was the possible conflict of interest. Ultimately they voted unanimously to allow him to serve on the board.

Former Regent Chuck Hassebrook, who heads the Center for Rural Affairs, an agriculture policy research center, said he voted yes only after being assured it would not cause conflicts with the Daugherty Institute research.

“At the end of the day, he (Milliken) is a good president, and I wanted to keep him,” Hassebrook said. “And the way to keep good presidents is to allow them to develop and experience new things.”

Ferlic, echoing some of the current regents, said he sees Milliken’s board service as “leadership development” and a chance to strengthen NU’s ties with state business leaders.

MILLIKEN’S COMPENSATION

A breakdown of University of Nebraska President J.B. Milliken’s compensation package from the university for 2011-12:

Base salary $411,370
Deferred compensation payout $174,031*
Deferred compensation set aside $47,310
Retirement pay set aside $19,197
Annual housing allowance $24,000
Annual car allowance $12,750
Total $688,658

* Not paid every year.

Even if that is the case, the American Association of University Professors, a group that advances professional values and standards, recommends that university presidents who serve on corporate boards not accept payment. But Milliken says he takes vacation days to participate in Valmont meetings and devotes considerable time during his evenings and weekends to board matters, so some payment is warranted.

“While I believe strongly that service on Valmont’s board is of value to the university, I’m not sure I would choose to devote the same amount of time and energy to it if I were an uncompensated board member,” he said in an email. “This is almost certainly one reason companies compensate already very busy people to serve on their boards.”

It appears Milliken is one of the few top officials at major Nebraska and Iowa public universities who currently serves on the board of a publicly held corporation. Doug Kristensen, chancellor at the University of Nebraska at Kearney, holds a paid board position for the Platte Valley State Bank in Kearney. His annual compensation for the service varies, but has always been less than $5,000.

UNL Chancellor Harvey Perlman served on the board of ISCO, a Lincoln-based scientific instruments manufacturer, until it was acquired by another company in 2004. Sally Mason of the University of Iowa served on the board of MidwestOne Financial Group, for which she was paid $17,092 in 2010. She resigned from that board in October 2010.

Milliken, NU’s president since 2004, filled a vacancy on the Valmont board in December 2011, the first time he had accepted such a position. He was elected to a full three-year term in April.

Mogens Bay, Valmont’s CEO and board chairman, was traveling and could not be reached for comment. Valmont’s proxy statement, prepared for the company’s April 30 annual shareholders meeting, cited Milliken’s academic background, his experience managing NU and his national and international activities as assets he brings to the board.

Hal Daub, a corporate attorney and former Omaha mayor who was elected as a regent last fall, said he sees no conflict between Milliken’s service on the Valmont board and the Daugherty Institute.

Daub likened Milliken to the CEO of a $2.5 billion annual enterprise. Allowing Milliken to serve on the corporate board is a way to boost his pay without “digging into the taxpayers’ bucket,” Daub said.

John Hansen, president of the Nebraska Farmers Union, said Milliken should have waited until after he retired as NU president to join the board.

“We’ve been concerned for a very long time about the fuzziness of the line between the public and private sector and the impact on the objectivity and independence of our land-grant colleges.”

Contact the writer: 402-473-9581, leslie.reed@owh.com

 

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2 Comments on “Cornhuskers Stuck w/NELNET Debt ~ Meanwhile, Million-Dollar Milliken Amasses Wealth on Taxpayer Dime”

  1. Josie Says:

    It must be great to live in JB’s world and be out of touch with the Nebraska citizens he serves. Just who footed the bill for JB, Harvey, Prem, Ronnie, and 50 or so of their administrator and faculty pals and a string quartet to travel to China recently? What was the point of this grandiose waste of money–money I assume came from the Nebraska taxpayers, but how would we know without a public accounting?

    Reply

  2. Josie Says:

    How refreshing and appropriate would it be for JB to donate his $129,000 windfall to scholarships for deserving Nebraska students. But we are not living in a world of JB-types doing the right thing for the people they supposedly serve.

    Reply

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