Embry-Riddle Aeronautical University

Addendum to the Board of Trustees April 15 Letter

As another successful academic year draws to a close, the Embry-Riddle Board of Trustees offers this additional information. For a 26-year period from 1980 to 2005, the University posted a cumulative positive operating margin of just $20 million – an inadequate amount for the much needed investment in our academic offerings, faculty, research, student programming, and infrastructure.

Conversely, over the 10 years from 2006 to 2015, the institution realized over $135 million and was able to improve the student experience by investing in new degree programs including seven Ph.Ds., state-of-the-art facilities, and additional faculty, as well as increase institutionally funded scholarships to more than $75 million. The University’s academic rankings and reputation continue to grow, benefitting past, present, and future students.

The historic and visionary decision of students, beginning in the 2005 spring semester, to raise student fees to support the construction of a new student union established the foundation for this iconic, landmark building. It will rival similar buildings at the finest universities and redefine the Embry-Riddle student experience. Prominent recognition inside the building will commemorate this farsighted action and extraordinary support from students. 

The Board takes this opportunity to thank the students and the Student Government Association for the leadership and dedication to this vital project. Originally a $45 million project, it was increased to $65 million to accommodate the students’ needs and end “the Riddle runaround.” Honoring a request from the current student body for additional space and services, the Board readily approved an additional $10 million for the building – bringing the total investment to $75 million.

Buildings throughout the University bear the names of our founders, famous aviators, government leaders, alumni, and Board members. Each naming is evaluated on a case-by-case basis including a review of the fundraising goals for that particular project and follow University guidelines taking into account personal contributions of time and money. The Board, under the leadership of the Vice Chairman, without the presence of or consultation with the Chairman, voted to honor Mr. Hosseini – a three-time alumnus – with the naming of our student union. Mr. Hosseini has donated millions of dollars, is one of the top five donors in University history, and has the highest lifetime giving of any alumnus. His selfless contributions of time, expertise, and personal resources have secured more than $40 million in state funding to support multiple infrastructure projects and ongoing programming. Never before in the history of Embry-Riddle has this level of funding been possible, and we are proud that an alumnus can secure this transformational support.

In similar fashion, buildings named after James Hagedorn and Jim Henderson were done so in recognition of their millions of dollars of philanthropic giving and commitment to Embry-Riddle. Regarding the naming of the cornerstone building of the research park, Congressman John Mica has earned the deep respect of the aviation and aerospace industry from his many years of service as chairman of the House Transportation and Infrastructure Committee. He is responsible for developing and overseeing federal policy and projects related to aviation, highways, rail, pipelines, maritime transportation, and emergency management issues. He is committed to modernizing the nation’s antiquated air traffic control systems to make air travel safer, more efficient, and more economical. These actions are highly relevant to Embry-Riddle and opportunities for our graduates, but his dedication has also been critically important to enhancing our research reputation. The key role he played in establishing the NextGen Florida Test Bed on the Daytona Beach Campus in 2011 has resulted in more than $50 million in research funding at Embry-Riddle and opens the door to future innovations and innovators.

In addition, Congressman Mica engaged Embry-Riddle’s College of Aviation in developing the wording in the bill that resulted in our students (and those in other university flight programs) needing only 1,000 hours of flight time to qualify for Airline Transport Flight rating, thus saving them a great deal of money and time as they pursue their dream careers in the industry.

Selecting and compensating a president are two of the Board’s most important responsibilities. The Board does not take these roles lightly and bases its decisions on a host of factors – most importantly, performance. The Board also looks at benchmarks, years of service, and other factors.

The $1.12 million figure from the 2013 Form 990 can be misleading when viewed in isolation. As at other institutions of higher education, a president’s pay varies greatly over time since large bonuses are not paid every year and they are more likely to be awarded late in the tenure based on an accumulating body of accomplishment. Additionally, the Form 990 includes multiple items including the value of standard benefits, such as health care and retirement contributions paid to all employees. 

Former president John P. Johnson’s total compensation as reported in 2013 was the largest amount he received during his tenure. Looking at a longer history and specific categories of compensation may be helpful. Since 2006, the average base pay for the president has been about $350,000. Annual bonuses over that same period averaged $85,000 and in half of those years there were no bonuses.

Compensation also takes into account the size and complexity of the institution, thus looking at The Chronicle of Higher Education ranking of a president’s salary can be misleading. Embry-Riddle is a multi-campus institution and larger than many of the private schools in the Chronicle survey. One way to control for this differential is to also look at pay relative to the size of the institution’s budget, a measure the Chronicle uses to assess compensation per million dollars in expenses. While Dr. Johnson’s overall compensation may have ranked high in the list in 2013, when using that measure, his compensation was $3,060.07 per million in expenses, ranking in the bottom 30th percentile among all presidents (the median was $4,837.10 per million of expenses). The total compensation packages for the interim presidents are in the $400,000 range.

The Board recognizes and appreciates the deep commitment and passion our students and alumni share for the aviation and aerospace industries. We invite them to engage with the University to gain a deeper understanding of our remarkable institution and for the mutual benefit of increasing the reputation of Embry-Riddle.

Our community of alumni, faculty, students, staff, administration, and friends must collaborate in our work to continually advance the connection to the past, present, and future of Embry-Riddle Aeronautical University. The Board welcomes suggestions and recommendations and will take them seriously as we strive to manage the challenges and opportunities of this great University. With this communication we believe this closes the issues that were brought to our attention.

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Embry-Riddle Aeronautical University, the world’s largest, fully accredited university specializing in aviation and aerospace, is a nonprofit, independent institution offering more than 80 baccalaureate, master’s and Ph.D. degree programs in its colleges of Arts & Sciences, Aviation, Business, Engineering and Security & Intelligence. Embry-Riddle educates students at residential campuses in Daytona Beach, Fla., and Prescott, Ariz., through the Worldwide Campus with more than 125 locations in the United States, Europe, Asia and the Middle East, and through online programs. The university is a major research center, seeking solutions to real-world problems in partnership with the aerospace industry, other universities and government agencies. For more information, visit erau.edu, follow us on Twitter (@EmbryRiddle) and facebook.com/EmbryRiddleUniversity, and find expert videos at YouTube.com/EmbryRiddleUniv.