What did expensive search net Ohio State? A 'failed presidency,' experts say

Ohio State University proved two years ago that it was willing to shell out big bucks to for-profit search firms in order to find its perfect president.

The process that led to the hiring of Kristina M. Johnson was one of the most expensive among public universities, according to higher education experts and university records.

But that's not necessarily a recipe for success.

Johnson announced Monday — just over two years into her five-year contract — that she would be resigning from her post. And with that she became the latest example of a "failed presidency," said higher education experts Judith Wilde and James Finkelstein.

Ohio State president departing:Here's a quick look at Ohio State University President Kristina Johnson's career

The two experts, both at the Schar School of Policy and Government at George Mason University in Virginia, have studied university president contracts and searches for more than two decades. Together, they've amassed a database of more than 300 contracts and at least 100 presidential searches.

According to Wilde, a research professor, and Finkelstein, professor emeritus of public policy, a failed presidency is typically characterized as one who leaves within the first two years of a contract. Their definition of "failed" does not necessarily account for a president's accomplishments during a tenure.

Johnson, who officially started at Ohio State in September 2020, will remain the university's 16th president through the end of the academic year shortly after spring commencement, which is scheduled for May 7.

Kristina Johnson:A timeline of Kristina Johnson's tenure as Ohio State University president

Although the reason for Johnson's departure is still unclear and she's been at Ohio State for just over two years at the time she announced her resignation, she still fits that bill because of how abruptly her tenure ended, they said.

"Even though we don't know the reason, we would call this a failed presidency," Finkelstein said.

Johnson did not immediately respond to a request for comment.

An expensive search

The search that ultimately led to Johnson began in January 2020, when the university hired the Boston-headquartered firm Isaacson, Miller to find a successor to President Michael V. Drake, who had announced his intention to resign in November 2019.

As part of the process, Ohio State also started two presidential search subcommittees: one made up of seven university trustees and another of a total of 20 students, faculty, staff members and community stakeholders.

That search to replace Drake, which lasted nearly five months, totaled more than $420,000, according to invoices paid to Isaacson, Miller by the university. Ohio State also paid nearly $48,000 for the presidential candidates’ flight, ground transportation and hotel expenses during the search.

Change at Ohio State:Community reacts to Ohio State University President Kristina Johnson's resignation

Among the public universities Wilde and Finkelstein have studied, Ohio State's search firm contract with Isaacson, Miller was among the most expensive.

For comparison, the University of Michigan contracted Isaacson, Miller in February to conduct a search for its next president. According to The Detroit News, the firm will be paid 28% of the next president's base salary during the first year plus a one-time bonus. The contract also includes a budget for travel expenses not to exceed $35,000 and 12% of the professional fee for administrative costs.

Using the interim salaries of Michigan's interim president and its former president, both paid $927,000 annually, Wilde estimated the university will pay more than $300,000 in fees.

"In essence, you are purchasing a president," Wilde said.

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According to one of the studies by Finkelstein and Wilde, presidential search contracts between August 2015 and January 2016 showed the average cost for a search firm was about $80,000, and the most expensive at that time was $160,000.

Several factors caused the cost of Ohio State's search to balloon.

In the contract between Ohio State and Isaacson, Miller, the search firm used a contingency-based fee. The university paid a professional fee totaling 33% of the president's first-year base salary and any bonus received during her performance review.

Opinion:Ohio State professor: Public deserve to know why president resigned

In August 2021, Ohio State Board of Trustees' Talent, Compensation & Governance Committee approved giving Johnson a $27,000 raise, which is 3% of her base salary, as well as a $263,500 bonus. At the time, Johnson earned $900,000 a year, according to her contract.

The Isaacson, Miller contract also included an 11% indirect expense fee, which covered costs for communications, postage and delivery, printing and copying, and research expenses. Additional expenses, including advertising, video conferencing, travel and interview expenses, were paid by Ohio State on an out-of-pocket basis, according to the contract.

The end of Johnson's journey at Ohio State

Just over two years after she started at Ohio State, Johnson officially announced that she would step down as Ohio State's president on Monday, hours after The Dispatch broke the story of her departure.

Kristina Johnson:A timeline of Kristina Johnson's tenure as Ohio State University president

The university's board of trustees asked Johnson, 65, to resign following a review conducted by an outside consultant, sources in the administration told The Dispatch.

Ohio State spokesman Ben Johnson said the outside consultant was called in to help the board with Johnson's annual performance review. During the consultant's work, concerns about her were raised by staff, sources in the administration told The Dispatch. What those concerns were and the details of the review are not clear.

"The board was aware of President Johnson’s intent to leave the university (in) advance of the November board meeting, and therefore an annual review was not completed," Ben Johnson said.

Search consultants have received hefty fees from Ohio State

While the search to replace Drake with Kristina Johnson was expensive, it's not the most expensive contract Ohio State has ever made with a search firm, Finkelstein said.

In 2014, Ohio State paid Chicago-based consultant WittKieffer $488,916.82 to recruit Dr. Sheldon Retchin to oversee its Wexner Medical Center and entire health sciences enterprise. Retchin resigned three years later after complaints from physicians about his leadership.

Also in 2014, OSU paid $330,408 to a search firm to help find a chief investment officer.

Wilde said it benefits the search firm in instances like Ohio State's, where firms are compensated using a percentage of the hire's earnings rather than a flat rate fee, to find candidates with high salaries.

"The more the salary, the more they earn," she said.

Using search firms to find university presidents has become almost ubiquitous in higher education, Wilde said.

In 1975, only about 2% of colleges and universities used search firms, with almost all of them recruited to private institutions. Forty years later, that skyrocketed to at least 92% of all presidential searches utilizing a search firm, Wilde said.

That rise in search-firm use has led to an increase in the number of failed presidencies, Wilde and Finkelstein said. With search-firm fees, salaries, bonuses, travel, retirement and other expenses, the cost of these presidencies adds up.

"These are big purchases that carry future liability," Wilde said. "The failed presidency is expensive, not just in dollars but in the reputation of the university."

Sheridan Hendrix is a higher education reporter for The Columbus Dispatch. Sign up for her Mobile Newsroom newsletter here and Extra Credit, her education newsletter, here.

shendrix@dispatch.com

@sheridan120