The Stute met with Associate Vice President for Finance Joseph Cassidy and Vice President for Human Resources Warren Petty to provide clarification and to answer questions raised in a previous article regarding Stevens’ 2016 tax returns.
According to the two officials, the salary of the President is decided by the Board of Trustees and is based on “specific goals.” Among other factors, the Board analyzes the growth of academic quality, research awards, improvements in financial rating, and the general modernization of the campus when deciding his salary. Other compensation decisions are made in consultation with Simpson, a financial services firm, which compares Stevens salaries to 30 other peer institutions. Cassidy and Petty stressed that 2016 was an anomalous year for President Farvardin’s salary, as it included an $827,800 re-signing bonus for extending his contract an additional five years. Petty said this amount was chosen “because of the great work Farvardin has done,” in the view of the Board of Trustees.
The two officials also answered questions on some specific aspects of the tax documents. When asked about the nature of the “Alternative Investments” and the abnormally large regional investments in Central America and the Caribbean, Cassidy explained that Stevens invests portions of its endowment in private equity and hedge funds managed by Goldman Sachs. These investments are domiciled in Central America or the Caribbean to avoid the pass-through of United States taxes. Cassidy also stated that these hedge funds and other foreign investments related to the endowment account for the foreign corporation ownership and voting shares that the tax documents claim Stevens holds, as well as the transfer of property to foreign corporations.
When asked why Stevens lost money on fundraising events, Cassidy explained that it was partially due to how the events need to be reported to the IRS, but more importantly, the events are primarily meant to attract big-donor alumni. The goal is to have those alumni donate larger sums at a later date so that the school raises more in the long run.
The company “Castle Point Holdings,” which the documents claim Stevens is the whole owner of, was a group of separate entities created to enable joint ventures between Stevens and faculty, according to Cassidy; the school is currently looking to disband these entities, as they are inactive.
The revenue listed as “Technical Leadership Instruction” in the documents derives from corporate programs Stevens runs, such as on-location training programs.
As a final note, Cassidy remarked that the salary information listed in the documents is for the calendar year 2016, while the rest of the information is for fiscal year 2016, which spans July 2016 to June 2017.
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