|
|
Penn and Inc: Incorporating the University of Pennsylvania
|
|
Detailed Notes from Matthew Ruben, "Penn and Inc.: Incorporating the University of Pennsylvania," in Campus Inc., Geoffry White, ed., Prometheus Books, 2000. From Note 7 (Penn's bad publicity prior to Judith Rodin's appointment as President): Penn became an object of national controversy and derision in the early 1990s as a result of the infamous "water buffalo" incident, in which a white student yelled "Shut up, you water buffaloes!" at a group of African American sorority members engaged in a rather loud initiation ritual below his dormitory window. The controversy was marked by a series of reversals by the Hackney administration on the question of how and whether to punish the white student. The incident was seized upon by conservatives as an example of the evils of political correctness. The Hackney administration's wavering on the question of punishment was also seen as a failure to stand up to racism on campus, and as a general failure of leadership. The offending student, who was Jewish, argued that he was a victim of ethnic discrimination because "water buffalo" was simply a loose translation of a Hebrew word connoting "oaf," and therefore was relatively innocuous compared to the generic curse words hurled at the sorority members by other dorm residents upset at the noise. For a sampling of reportage and commentary on the controversy, see "Buffaloed at Penn" 1993; Cornwell 1993; E. Goodman 1993; H. Goodman 1993a, 1993b; Laurence 1993; Russakoff 1993; Savage 1993; "Speech Code Silliness" 1993; Trausch 1993. From Note 9 (Penn's status as Philadelphia'a largest private employer): The Penn-at-a-Glance Fact Sheet, last updated in December 1996, reports 31,546 university employees across 12 schools and the University of Pennsylvania Health System. The figure includes 4,113 faculty, 18,821 non-faculty university employees, and 8,612 Health System employees. Penn's web site does not include employment figures for University City Associates (UCA) and Hamilton Square, Inc., its two wholly owned, for-profit real estate development subsidiaries. UCA has been managed by an outside firm since 1996, and so it is unclear if any of its employees were on the payroll in the period for which the Penn-at-a-Glance Fact Sheet calculated its figures. Hamilton Square, Inc. has just been incorporated as of this writing and employment arrangements and figures for it are therefore unknown. From Note 23 (Judith Rodin's compensation as a Board member of Aetna): Kniffin (1997) reports that Rodin received more than $123,000 in direct cash compensation for her service on the boards of Aetna as well as other corporations, including Electronic Data Systems and AMR (the parent company of American Airlines). Rodin also sits on the board of Greater Philadelphia First Corp., an economic development corporation funded and run by approximately 30 Philadelphia-area corporations concentrated in the finance, insurance and real estate, or "FIRE," sector. The $120,000 figure cited in this article for Rodin's compensation from Aetna includes cash payments for specific director services, as well as awards of stock and dividends (Aetna Inc. 1998: 14). The total figure for cash and assets obtained by Rodin in 1997 from Aetna was calculated by the author by adding the following: (1) $38,333 for a retainer, consisting of a standard retainer amount plus additional cash for serving on Director committees; (2) $52,000 for attending board meetings; (3) $26,392 worth of stock (calculated by the author by multiplying 350 shares granted annually to each Director by the average price of Aetna stock in 1997); and (4) $1,760 in dividends (calculated by the author by multiplying the number of shares Aetna had given Rodin since she began serving on the board by Aetna's 1997 dividend payment rate of $0.80 per share). Based on these figures, total compensation to Rodin for 1997 totals $118,485. Aetna's rules permit Directors to defer some or all of this compensation and place it in a "stock unit" or interest-bearing account. Aetna's proxy statement does not separate out such deferrals when reporting compensation paid to its Directors. Finally, the $118,485 figure does not take into account the question of whether Rodin had sold any of her Aetna stock, and at what price she may have sold it. The figure is meant to indicate the cash value of Rodin's Directorship rather than the actual number of dollars she received. From Note 29 (Percentage of Penn facilities management employees who failed to secure positions with Trammell Crow): The number of employees affected by the outsourcing deal was variously reported as 160, 175 and 180 (cf. Cipriano 1997b; Fishman 1998c; Lanman 1997). The number of employees who ended up working for Trammell Crow was 116. The resulting percentage of employees employed by the new firm thus equaled 64.4 percent, 66.3 percent, or 72.5 percent. From Note 31 (Details of Penn's financial benefit from Trammell Crow's stock IPO): A degree of empirical support for the fact that the Penn outsourcing deal enhanced the value of Trammell Crow's IPO can be found in Trammell Crow's filings with the Securities and Exchange Commission. After the initial filing of form S-1, the form used for an IPO, the company filed four amendments. Twice during the course of the amended filings the company's registration fee -- which is based on the estimated aggregate value of the IPO -- increased. The registration fee in the fourth amendment was based on an aggregate stock value about 25 percent higher than the one in the initial filing (Trammell Crow Co. 1997). When Crow's stock traded on the New York Stock Exchange for the first time on November 25, 1997, it closed at $21.25 a share, more than 20 percent higher than the offering price of $17.50, and peaked at about $42 a share in the ensuing weeks. The IPO raised an estimated $67.8 million, of which $32 million, or 47.2 percent, was to be paid to Penn: $26 million upon signing the ten-year contract with Crow, and another $6 million at the beginning of the second year of the contract. Since the contract called for Penn to pay Crow $5.25 million a year for its services, these lump payments effectively allowed Penn to pay nothing for Crow's services during first six years of the contract. The Wall Street Journal called this arrangement "unusual" (Templin 1997: 18). It later had to be altered in the wake of an ambiguous IRS ruling that suggested Penn might lose tax-exempt status on all its properties because they now would be managed by a for-profit firm. The result of the IRS situation seemed to be that the university would not see the $26 million payment until sometime during the second year of the contract (cf. Fishman 1998c). Trammell Crow later lost the facilities management contract because of undisclosed problems with the firm's performance. From Note 38 (Penn Law Library admission/usage policy): The policy allows graduate and undergraduate students outside the Law School to enter the library only after passing a "screening" process in which they explain to a reference librarian why they need to use the library's resources. Faculty may also arrange for students in their classes to obtain temporary privileges at the library if a course requires law-related research materials (Wong 1996; Albers 1996). From Note 41 (Increases in endowment and tuition; decreases in staff salaries): Adjusted for inflation, the university's endowment increased 378 percent, and tuition increased 108 percent, from 1976 to 1996. During the same period, the real wages of low- and mid-level Penn staff declined by 1.4 percent.
"Low- and mid-level staff" refers to employees whose jobs are classified in the range of Penn job categories G7 to P3. These job categories cover the entire range of Penn's hourly wage workers, and the bottom end of salaried "career" staff. The 1.4 percent decline was measured by averaging salaries within each category (as advertised in position opening announcements in the Almanac) in both 1976 and 1996, aggregrating the averages for each of those two years, and comparing the two resulting aggregates. From Note 64 (Information on University City Vendors Alliance and Penn Consumer Alliance): A plurality of the vendors were immigrants and non-native English speakers whose concessions were male-headed family businesses. An equally large minority consisted of primarily white, working class men who ran their trucks and carts alone, with a single relative, or with one or two non-family employees. There were also a number of conveyances staffed by African-American men; these businesses were owned by Milton Street, brother of the City Council president. Finally, there were a smattering of businesses run by young, non-immigrant married couples (both black and white); by people with middle-class backgrounds, and by women. With the exception of Milton Street's vendors, whose livelihoods were protected throughout by his family connection, the alliance held up throughout the struggle, and was strikingly devoid of racial, class, gender and ethnic dissension. The students, staff and faculty of the Penn Consumers Alliance (PCA) were primarily white and middle-class. Toward the end the leadership became predominantly male as well, although those who testified at City Council reflected the class, racial and gender diversity of the vendors' supporters outside the PCA's cadre leadership. Internal political differences existed from the beginning: the gesture to "consumers" in the PCA's name was a concession to those who did not endorse launching a broader critique of Penn's financial dealings and economic motivations. From Note 68 (Penn's food plazas and effects of vending ordinance): As the article reports, Penn had filled less than two-thirds of the promised 45 vendor slots in its "Fresh Air Food Plazas" when it stopped taking applications. Since the article's publication, one of the five plazas has been eliminated by the expansion of an adjacent university gymnasium. When the plazas were originally announced, many opponents of Penn's vending plans, as well as the undergraduate student government, opposed the location of this plaza precisely on the grounds that impending gymnasium renovations would soon eliminate it. At the time, administrators publicly denied that the plaza would be negatively effected or eliminated. A second of the original five plazas has in the intervening few years become virtually dormant, with only one vendor continuing to function in it. This too was forseen by many opponents of Penn's vending reorganzation, who predicted that the university would use its control over the plazas to gradually reduce the total number of food vendors around campus. |
