Supersize Compensation

KMOV, a news station in Saint Louis, has begun airing a multi-part series on school administrator pay. Reporter Craig Cheatham reviewed roughly 60 superintendent contracts in the metro area and found that a number of superintendents are earning outsize salaries and benefits (you can watch Cheatham’s report here).

Many superintendents in the Saint Louis area make more than $200,000 in salary alone, and receive thousands more in non-salary benefits, such as car payments and annuity payments. For example, Cheatham found that the Clayton superintendent receives $750 per month as a car allowance. This isn’t surprising. In my study of more than 450 Missouri superintendent contracts, I found many odd benefits, including the award of a house.

Most staggering is the finding that the Ferguson-Florrisant Superintendent, Jeffery Spiegel, was awarded health insurance for life for himself and his dependent after he retires at the end of this year. The school board estimates that the benefit will cost more than $200,000, but they have no idea what the cost will be in reality. After all, who knows how long Spiegel will use the benefit?

Cheatham and I both attended the Ferguson-Florrisant School Board meeting on Sept. 8, immediately after the St. Louis Post-Dispatch uncovered Spiegel’s outsized benefit. There was tremendous turnout, to the point that several attendees had to stand. This was unusual; the teachers I sat with said that the board meetings are usually more sparsely attended.

During the public comment session, a number of parents and teachers spoke about the health insurance award. All disagreed with it. In fact, several speakers and attendees noted that the school district had offered retiring teachers continued health insurance for three years after retirement. Some asked why wasn’t that good enough for the superintendent.

I naively thought that in the face of the recession, bad publicity, and disgruntled teachers and parents, perhaps Spiegel would voluntarily relinquish the health insurance for life. Instead, the school board’s president, Les Lenz, spoke at the end of the public comment session to defend the compensation award.

The award is cost effective, Lenz said. Instead of having to find a superintendent quickly, and incur the costs of hiring a consultant to find that new superintendent, the school board could simply award the additional benefit in order to bide more time.

I wonder what the board members were thinking when awarding this potentially incredibly large benefit. After all, the school board will have to conduct a search for a superintendent eventually, regardless of whether the board postpones the search for a year. Does the board think that the search costs will be much lower next year?

As I’ve noted before, this award is especially bad policy because it has an uncertain cost, and because the form of the award obscures its cost from the public. The school board may estimate that the award will cost $200,000, but the cost could be lower, or much greater. Had the board awarded Spiegel a significant raise — say, $40,000 — that could well have been enough to entice him to stay in the district. It certainly would have been a more budgetable cost.

I encourage the Ferguson-Florrisant School Board to be more transparent when awarding superintendent benefits in the future. Furthermore, I am baffled by the board’s stance that this is sound school district budget management.

P.S. — Cheatham’s investigation of school administrator pay continues tonight, on Channel 4, at 10 p.m.