If there has been a poster child for shameless corporate excess in the throes of the Great Recession, Goldman Sachs — payer of $17 billion worth of bonuses so far this year — must be it. Fortunately, the firm's outlandish compensation, heedless disregard for its civic debts and cynical attempts to save face with negligible charity projects have been well-documented in mass media and need no further mention here.
But still, December means bonus season. So there's no better time to risk beating a dead horse to expose an unsavory truth about the connection between Goldman's hilariously out-of-touch bonus payouts and one of our University's dearest and most esteemed figures.
The board of directors at Goldman Sachs is divided into a handful of committees responsible for scattered elements of the firm's operations, including the Compensation Committee, the body specifically responsible for the $17 billion of bonus packages this year. There are 10 voting members on this Compensation Committee, some big names and titans of industry among them. But included in their ranks is someone a little more down-to-earth: one Ruth Simmons, President of Brown University.
It's true: Our dear President Simmons sits and votes on the committee responsible for the single starkest symbol of corporate greed to emerge from the recession.
Compensation Committee aside, the fact that Simmons sits on the board of Goldman Sachs at all raises its own issues. She makes $550,000 annually from her directorial positions at Goldman and Texas Instruments, positions she almost certainly holds thanks to her day job as a university president. By employing her here we enable her to make more money elsewhere.
Because these half a million dollars in directorial compensation are so intimately tied to Simmons' role at Brown, they have to be included in any accurate assessment of how much she makes as President. The fact that the University only pays $536,000 out of pocket is unimportant. Between her on-the-books salary and the compensation she draws from the appointments Brown empowers her to hold, the true salary of Brown's President is an aristocratic $1,086,000 each year.
With this complete picture, it's absurd that Simmons can take a voluntary pay cut of all of $64,000 and be lauded for making a sacrifice worthy of sainthood. When you're pulling seven figures annually, $64,000 is a token PR move of the brand perfected by Goldman Sachs. And just like Goldman owes its existence to the taxpayers who funded the bailout, Simmons owes her directorial profits to the students who fund her Brown employment. Without us, Ruth, Goldman wouldn't be paying you a cent.
But again, this issue has to be bigger than our President's personal income. Simmons was, through her seat on the Compensation Committee at Goldman, directly tied to one of the most shameful and embarrassing business decisions in memory. The New York Times has taken a particular interest in the Goldman bonuses, regularly mocking the firm's executives on its editorial page while demanding that they repay their debts to taxpayers, which the Times places in the tens of billions of dollars.
The bonus fiasco has obviously been publicly humiliating for Goldman, but thanks to her intimate involvement in the bonus-paying process, Simmons has irrevocably tied the University to their high-profile PR nightmare — one that is drawing condemnation from all sides as it plays out in agonizing slow motion and dominates the public consciousness.
Though the $550,000 is hers and hers alone, the consequences of her decisions as a director — damaged reputations among them — accrue to the University as a whole.
To distance the University from Goldman's bonus disaster, Simmons should resign her position on the Board of Directors in public protest of the $17 billion bonus outlay. To acknowledge the extent to which she owes her directorial compensation to the University, she should do some more thinking about what constitutes a meaningful pay cut.
And while she's busy pondering all of that, we students need to start thinking about whether she's lived up to the de facto canonization we've thoughtlessly, almost instinctively, bestowed upon her. For the moment, at least, there are 17 billion reasons why she doesn't deserve that spot on your T-shirt.
Simon Liebling '12 is from New Jersey. He can be reached at simon.liebling@gmail.com.
