14 Pages Posted: 21 Oct 2008
This case involves a hypothetical situation in which two business professors propose a deferred-compensation plan to the president of Stanford University after the passage of the Economic Growth and Reconciliation Act of 2001.
Rev. Sept. 1, 2016
Compensation Planning at Stanford University in the 21st Century
Stanford at the End of the 20th Century
Beginning in 1989, Stanford University, one of the premier academic institutions in the world, experienced events that undermined its financial position. Some of the events included the 1989 Loma Prieta earthquake, an economic downturn in the early 1990s, and controversy over indirect costing methods.
The indirect cost controversy started in 1990. Paul Biddle, a representative from the Office of Naval Research, charged Stanford with improperly accounting for federal research funds. Stanford received substantial bad publicity from the charges, which forced the resignation of President Donald Kennedy in 1992. Although Stanford was vindicated in 1994, the university spent more than $ 25 million to provide independent verification of its work and to respond to the government inquiry (Exhibit 1). In his book Academic Duty, Kennedy wrote:
. . .
Keywords: deferred compensation, taxation, not-for-profit, negotiation, political cost, Economic Growth Reconciliation Act of 2001
Suggested Citation: Suggested Citation
Frank, Mary Margaret, Compensation Planning at Stanford University in the 21st Century. Darden Case No. UVA-C-2187. Available at SSRN: https://ssrn.com/abstract=908086
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File name: UVA-C-2187.
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