Wojo's Compensation & Pilarz's Mess

[GGGG]

I just spent the last month filling out 990s.  You are either unnecessarily snarky or don't know what you are talking about.

All donations have to be recorded as revenue whether they are immediately spent or not.  If you dig into the the details, you will notice that there was $26 million contributed to endowment funds in 2015.  That is money that is not meant to go straight back out as expense. If you assume that Marquette only spends the investment income off of endowments, all contributions to endowment funds would be pure "profit".

My guess is a lot of the rest were capital campaign contributions.  You have to recognize it in the year that either the money is received, or on a pledge, all conditions have been met to receive the money.  However, the expense is recognized over the life of the asset.  As a simple example, let's assume that in the year the law school was completed, the Ecksteins gave Marquette $50 million to pay for it.  The building has an estimated useful life of 50 years.  In that example, Marquette would show revenue of $50 million, but expense of only $1 million ($50 million/50 years = $1 miilion/year of depreciation), for a tidy "profit" of $49 million for that year.

Which is why you have to pay attention to the cash flow statements too right?  In your above example, the $49 million would turn from a cash asset to a building asset.  And in your endowment example, the cash is turned into an investment. 

[Jay Bee]

Marquette just posted their IRS Form 990, which covers their academic year of 7/1/14 through 6/30/15.  JayBee will chime in with all the caveats, but this covers Wojo's first full year of compensation, remembering he has been extended since.

Wojo's base salary is listed as $1,186,158 plus $37,872 in other benefits for a total of $1,224,030 in compensation.

Buzzard still received $478,480 in compensation and benefits, even though he left in March 2014 and didn't work in this fiscal year.

Folks, slow down.

The 990 is for MU's fiscal year ended 6/30/15, HOWEVER... much of the compensation information (e.g., Schedule J, PART VII a., etc.) is based on amounts included on W-2's (~calendar year).

So, what W-2 falls into MU's year ended 6/30/15?

The calendar 2014 W-2.

Buzz was coach until early spring. Thus, you see an amount as being paid to him.

Wojo was coach for part of the year. Thus, you see what may look like a low amount being paid to him. It's a partial year.

[warriorchick]

Folks, slow down.

The 990 is for MU's fiscal year ended 6/30/15, HOWEVER... much of the compensation information (e.g., Schedule J, PART VII a., etc.) is based on amounts included on W-2's (~calendar year).

So, what W-2 falls into MU's year ended 6/30/15?

The calendar 2014 W-2.

Buzz was coach until early spring. Thus, you see an amount as being paid to him.

Wojo was coach for part of the year. Thus, you see what may look like a low amount being paid to him. It's a partial year.

Good point, Jay Bee.

Luckily, my organization is on a calendar year, but as an accountant, i always found it frustrating that you couldn't tie the W-2 numbers to the income statement on a non-calendar-year organization.

[TAMU, Knower of Ball]

Back to the the topic.  MU is still paying for all those mistakes as well as the separation of those others all involved in that cluster.

You've never worked for a university have you? Much worse clusters than this exist at almost every university. Hell, look what's going on at Baylor right now.

[Jay Bee]

Good point, Jay Bee.

Luckily, my organization is on a calendar year, but as an accountant, i always found it frustrating that you couldn't tie the W-2 numbers to the income statement on a non-calendar-year organization.

My favorite for corporate reporting is the ol' 52/53-week convention. Want to talk about ASC 2016-09? We need an accounting message board on Scoop.

-----------------------------------

Back to Wojo's contract... now, remember without seeing the contract... reading the contract.. understanding the contract.. it's not possible to be sure what the reported numbers mean. There are so many provisions in contracts that can make the payout and/or reported earnings in a single year only a part of the story.

For example, he may have a stay bonus... something like, "if you're still employed on April 30, 2018, you'll get $600k"...

BUT.. I will say.. if we assume Wojo was paid a base of around $1.2MM for approximately 9 months in calendar 2014 and we annualize it to $1.6MM... that amount is right in line with where I'd expect his contract to be based on his resume coming in. Completely reasonable.

[Dr. Blackheart]

You've never worked for a university have you? Much worse clusters than this exist at almost every university. Hell, look what's going on at Baylor right now.

True, but the topic is on Marquette and these folks were all fired/separated.

[Dr. Blackheart]

My favorite for corporate reporting is the ol' 52/53-week convention. Want to talk about ASC 2016-09? We need an accounting message board on Scoop.

-----------------------------------

Back to Wojo's contract... now, remember without seeing the contract... reading the contract.. understanding the contract.. it's not possible to be sure what the reported numbers mean. There are so many provisions in contracts that can make the payout and/or reported earnings in a single year only a part of the story.

For example, he may have a stay bonus... something like, "if you're still employed on April 30, 2018, you'll get $600k"...

BUT.. I will say.. if we assume Wojo was paid a base of around $1.2MM for approximately 9 months in calendar 2014 and we annualize it to $1.6MM... that amount is right in line with where I'd expect his contract to be based on his resume coming in. Completely reasonable.

I think this logic is about right.  However, in the previous 990, Wojo isn't listed where Chew is.  Buzz made $3.3M in that one.  I believe this 990 is on an accrural basis as well which may explain Buzz's further compensation. The previous their players, except Cords are listed a severance payments.

[Jay Bee]

I think this logic is about right.  However, in the previous 990, Wojo isn't listed where Chew is.  Buzz made $3.3M in that one.  I believe this 990 is on an accrural basis as well which may explain Buzz's further compensation. The previous their players, except Cords are listed a severance payments.

No. The largest amount you point out in your original post is false. You do not understand the document that you're reading and are jumping to poor and inaccurate conclusions.

Buzzard still received $478,480 in compensation and benefits, even though he left in March 2014 and didn't work in this fiscal year.

Again (see my earlier posts in this thread), the numbers you're citing from the fiscal year ended 6/30/15 are from calendar year 2014. So, all or most of the amounts listed for Buzz are just his normal salary from when he was employed as coach at MU.

[ChicosBailBonds]

Wait... are you telling me Chicos shoehorned in a name drop where it was tangentially related at best? I'm shocked!

That's awesome....especially since I didn't name drop on this one.  LOL.  Please show me where I named the person who was in the final listing?

Crickets.....

[ChicosBailBonds]

I am not sure of your point. As I stated, Mary worked closely with Larry for multiple years at Notre Dame, and she was Pilarz's childhood friend.  If you think that was a coincidence, so be it.  In any regard, Pilarz hired those both as was his charge. 

Back to the the topic.  MU is still paying for all those mistakes as well as the separation of those others all involved in that cluster.

Blackheart, maybe I read it wrong, but it feels like you are saying it was a done deal and they had their guy from the get go because of Mary.

I'm suggesting it wasn't nearly so neat and tidy like that.....that is very much on topic, IMO.

[Jay Bee]

I believe this 990 is on an accrural basis as well which may explain Buzz's further compensation.

It's not on an accrural (sic) or accrual basis. This misunderstanding of yours resulted in misstatement of facts in the original post of this thread.

From the 2015 Instructions for Schedule J (irs.gov if you want to double check for yourself):



The calendar year that ended in MU's FY ended 6/30/15 was 2014.

[ChicosBailBonds]

I'm not sure Chicos has a full understanding of what a search committee does.  Allie McGuire wasn't making the hire.  They would screen candidates and make recommendations, but in the end they will let the supervisor hire the guy he wants as long as he is qualified.

BTW, there was nothing in Larry's background to suggest he would be a poor candidate...at least to an outsider like me.  In the end it was the Pilarz presidency that was the root of many of Marquette's woes.

I'm quite aware, and have been on two committees myself.  I know Allie wasn't making the hire nor is the search committee one that makes the hire.  Now, the search committee can have a vote in the process, depending how the structure of the hiring is setup.  Different ways of doing it.

[ChicosBailBonds]

stop...chicos is the donald trump of this board.

You're the Hillary Clinton of this board.


Also, no politics please...

[79Warrior]

I need to find a gig where they  ask me to leave, and then pay me another $300-500k!

Look at virtually every corporate CEO in America that gets showns the door. Golden parachutes galore.

[ChicosBailBonds]

Look at virtually every corporate CEO in America that gets showns the door. Golden parachutes galore.

Average CEO pay is $160K

http://www.payscale.com/research/US/Job=Chief_Executive_Officer_(CEO)/Salary

[Gato78]

Except this: http://www.nytimes.com/interactive/2016/05/29/business/how-much-ceos-made-last-year.html

[Jay Bee]

Except this: http://www.nytimes.com/interactive/2016/05/29/business/how-much-ceos-made-last-year.html

This isn't what they were paid, however.

If I give you a stock option grant that is valued (based somewhat on subjective assumptions) at $1,000,000 today, but the award doesn't vest for 4 years and only vests if the company meets certain performance criteria -- otherwise, it's worth $0 to you, were you really paid $1,000,000 in 2016?

[Nukem2]

This isn't what they were paid, however.

If I give you a stock option grant that is valued (based somewhat on subjective assumptions) at $1,000,000 today, but the award doesn't vest for 4 years and only vests if the company meets certain performance criteria -- otherwise, it's worth $0 to you, were you really paid $1,000,000 in 2016?

True, though cash payments for those on that list are still "slightly" higher than the averages from your source...   

[Jay Bee]

True, though cash payments for those on that list are still "slightly" higher than the averages from your source...   

That goofy Payscale site isn't my source -- that was chico's post.

Nonetheless, the public is unable to understand proxy summary compensation disclosures vs. what's been paid or earned.

Here's what people lump in together as being the exact same things:

1) $5,000,000 in cash, paid today, and
2) Stock options valued under the Black-Scholes method at $5,000,000. These stock options only vest and become exercisable if (a) you stay employed for the next 4 years and (b) the company meets various performance criteria over that period. Otherwise, those options are never exercisable for you and go bye bye. In addition, if the company's stock doesn't perform, the options - even if (a) and (b) above are met, will be worthless.

Call me kooky, but I'd take 1) over 2).

The NY times link counts them as being the same thing.

[Nukem2]

That goofy Payscale site isn't my source -- that was chico's post.

Nonetheless, the public is unable to understand proxy summary compensation disclosures vs. what's been paid or earned.

Here's what people lump in together as being the exact same things:

1) $5,000,000 in cash, paid today, and
2) Stock options valued under the Black-Scholes method at $5,000,000. These stock options only vest and become exercisable if (a) you stay employed for the next 4 years and (b) the company meets various performance criteria over that period. Otherwise, those options are never exercisable for you and go bye bye. In addition, if the company's stock doesn't perform, the options - even if (a) and (b) above are met, will be worthless.

Call me kooky, but I'd take 1) over 2).

The NY times link counts them as being the same thing.

Know all that very well, including the Black-Scholes modeling.  Right now, I would take 1) as well.  My answer may have been significantly different 10 or 15 years ago though. 

[Silkk the Shaka]

That's awesome....especially since I didn't name drop on this one.  LOL.  Please show me where I named the person who was in the final listing?

Crickets.....

Your defense is pedantry?

Ha okay, you did not technically use the person's name in the post I quoted. My apologies.

[ChicosBailBonds]

Except this: http://www.nytimes.com/interactive/2016/05/29/business/how-much-ceos-made-last-year.html

Except there aren't 200 CEOs in this country....more like 200,000.  Good to see my industry has 20+ in that list.  Looks I chose wisely.

I'll bet if we look at the top lawyers paid in this country the amounts would be insane...same for doctors, athletes, actors....and yes, top CEOs.

Avg CEO pay....$160k.  I'm guessing avg attorney salary also much lower than the top 200.   

[ChicosBailBonds]

This isn't what they were paid, however.

If I give you a stock option grant that is valued (based somewhat on subjective assumptions) at $1,000,000 today, but the award doesn't vest for 4 years and only vests if the company meets certain performance criteria -- otherwise, it's worth $0 to you, were you really paid $1,000,000 in 2016?

Details details. 

[ChicosBailBonds]

True, though cash payments for those on that list are still "slightly" higher than the averages from your source...   

My source, but the avg American, or avg Scooper isn't capable of understanding there are several hundred thousand CEO's in this country, not a few hundred.  Details...details.


Here's another source....The Bureau of Labor Statistics.  Avg pay of CEOs is $178k, almost 250K positions. 

https://www.aei.org/publication/the-average-us-ceo-last-year-made-only-178400-about-the-same-as-a-dentist-and-got-a-raise-of-less-than-1/

[Nukem2]

My source, but the avg American, or avg Scooper isn't capable of understanding there are several hundred thousand CEO's in this country, not a few hundred.  Details...details.

Actually, there are millions.  Just ask my wife.