University Diaries has been covering executive bonuses at Duke University. Earlier posts are here, here, and here.
From a comment thread about the Duke bonuses in the Duke newspaper:
Dr [Victor] Dzau is a director of four major corporations (sample Pepsi) earning more than $1 million in fees each year in addition to his Duke salary and his bonus. When you consider the boards meet regularly (usually 10 or 12 times a year) in distant cities, … this [is] an undue diversion of his attention.
The experts agree. From a recent New York Times article about university presidents and chancellors sitting on corporate boards:
Nell Minow, editor of the Corporate Library, an independent research firm focusing on corporate governance, [says], “it is just physically impossible to do the work necessary to be a good director” [when you sit on many boards]. The Corporate Library estimates that board members must invest 240 hours a year, including meetings and preparation, to do the work properly. But it can become a full-time job if the company runs into trouble.
Charles M. Elson, a corporate governance specialist at the University of Delaware, is highly critical of university presidents who serve on several boards… “If you see a university president on multiple boards, that’s a problem,” he says. “There is no way you can do the job. Someone has got short shrift.”
… [There is now] a movement to limit the number of boards each president serves. In the University of California system, for example, the Board of Regents voted in January to restrict board membership for its chancellors to three.
Raymond D. Cotton, a partner at the Washington law firm Mintz Levin who specializes in presidential contracts and has represented about 250 institutions, says he recommends to universities that they write into contracts that the president can serve on a maximum of two boards.
Duke is rewarding Dzau for not being on campus.