During his long tenure at New England Law, John F. O’Brien has been among the highest paid law school deans in the country. When he turns over leadership of the school later this year to former Republican senator Scott Brown, O’Brien will also walk away with one of the most lucrative retirements in academia, worth at least $5.3 million.
O’Brien, 69, who has been dean of the Boston law school since 1988, is on target to receive an exit package more commonly negotiated by the presidents of top-tier private colleges or complex flagship state universities — rather than the head administrator of a 700-student law school with a local reputation and middling rankings, experts said.
O’Brien’s retirement package, which includes more than $4 million in deferred compensation and $1.3 million for unused sabbaticals, was reported in the school’s most recent nonprofit filings and was awarded even as New England Law has faced multiple years of operating deficits, anemic returns on its endowment, and falling enrollment.
Considering New England Law’s finances and rankings, O’Brien’s retirement is hard to justify, said Paul Campos, a professor at the University of Colorado Law School, who has written about the economics of law school and has been a critic of O’Brien’s previous compensation package.
“This is completely outrageous on every level,” Campos said. “What is the justification for giving him all this money?”
New England Law noted in its financial documents that O’Brien’s retirement plan was a way to recognize him for his “30-plus years of distinguished service to the school.”
Neither O’Brien nor Martin Foster, the longtime chairman of the school’s board of trustees, returned calls for comment.
Law school spokeswoman Jennifer Kelly said in a statement that O’Brien, who has been at the law school for 35 years, including as an associate dean, is leaving the law school in far better shape than when he arrived.
“The compensation amounts for President John O’Brien listed in the school’s public filings represent accumulated retirement benefits reflective of 35 years of dedicated service to our law school,” Kelly said. “Upon his retirement, President O’Brien will be leaving the school in a solid financial position, having raised the school’s once negligible endowment to more than $85 million while keeping the school debt-free.”
O’Brien is a fixture in local and national legal circles. During his time as president of New England Law, he has attracted prominent jurists to speak at school events and teach classes, including Supreme Court Chief Justice John G. Roberts. In 2014, the American Bar Association’s legal education section gave O’Brien its highest award.
But the school, which started as a place to educate women for legal degrees, has often been overshadowed by the region’s powerhouse law schools, including Harvard University, Boston University, and Boston College. Almost 70 percent of New England Law students receive grants or scholarships to pay for the nearly $51,000 annual tuition.
New England Law students have also complained about their employment prospects post-graduation. In 2018, 44 percent of its students found full-time, long-term jobs that required the passage of the bar exam, compared to 68 percent nationally, according the ABA.
New England Law has also struggled financially. It ran an operating deficit of $2.5 million in 2017 and $8 million for the fiscal year ending in June 2018, according to its tax filings.
But Kelly said the outlook for the school is improving. The operating deficit for 2019 shrunk to $250,000, she said.
New England Law also saw a significant boost in the size of its first-year class, from 185 students in 2018 to slightly more than 350 last year, while the caliber of students also improved, with higher scores on the entrance exam, Kelly said.
“The school recently doubled the size of its entering class while also increasing entering credentials, ensuring a strong future for the school,” she said.
Kelly said that the board of trustees consulted an independent compensation firm before setting O’Brien’s retirement package and studied comparable institutions. But she declined to name the consultant used or comparable presidential retirement packages.
Kelly also declined to comment on how much Brown will receive when he takes over as dean and president of the law school in December. Brown is currently the US ambassador to New Zealand and Samoa.
O’Brien’s pay has drawn criticism and headlines in the past. In 2011, his annual compensation was $867,000, which included payments on a $650,000 forgivable loan and which ranked him among the highest paid law school deans.
In 2013, when the school had to cut faculty, O’Brien took a 25 percent pay cut, though he still out-earned many of his colleagues.
His retirement package also contains several unusual elements, according to compensation experts.
Before 2017, the law school had set aside at the most $26,500 annually for O’Brien’s deferred compensation plan, according to its tax filings.
But as his retirement neared, it appears from the school’s public filings that the trustees increased his annual deferred compensation allotment to $38,002, as long as he stayed on until 2020 and fulfilled other requirements. The school also adjusted the deferred compensation plan so that the higher annual allotment would stretch back to his entire tenure as dean and assumed that the sum had been increasing by 6.5 percent annually, according to the filings.
Most look-back provisions in exit packages are for about five years, not more than 30 years, said James Finkelstein, a professor emeritus at George Mason University, whose research focuses on college presidents and their contracts.
The estimated lump sum value of O’Brien’s deferred compensation is expected to be $4 million. But it could be more, since O’Brien is entitled to receive the money in annual payments for the rest of his life — a perk rarely offered outgoing university presidents because of the long-term liability it could place on an institution, Finkelstein said.
Stanford University, with a $28 billion endowment, offers its current president a supplemental retirement plan that provides benefits for life, according to its tax filings.
Calculating the total value of retirement packages in academia can be difficult, especially for presidents of private institutions, which don’t have to release their contracts and only acknowledge the expense years later in government tax filings.
These packages are also becoming increasingly complicated and much more valuable, according to experts.
There have been a select number of these multimillion dollar payouts to college chief executives tied to deferred compensation, said Dan Bauman with the Chronicle of Higher Education, which publishes an annual list of presidential pay.
In 2014, for example, Brandeis University, a 5,800-student institution, acknowledged that it had paid its former president, Jehuda Reinharz, $4.9 million in deferred compensation and untaken sabbatical after his exit. Critics at the time called the sum “jaw-dropping.” Brandeis announced it along with compensation policy reforms to dampen outrage among students, alumni, and faculty.
In 2016, when James Ramsey left the University of Louisville after his 14-year tenure, he received a $3.6 million deferred compensation payout.
Former Springfield College president Richard B. Flynn earned $4.1 million for leading the 5,000-student school for nearly 14 years in 2013, most of it from his deferred compensation.
Still, Finkelstein said, he has rarely seen an exit package like O’Brien’s.
“Here you have a dean of a law school, a low-ranked law school . . . his retirement benefits may be the best of any university president in the country,” he said. “They’ve taken on a huge liability here. Is this prudent?”