The world’s 55th richest man, an unpaid volunteer overseeing the investments of the University of Texas investments, has told UT to shove it and resigned from his positions with the UT system when criticized about the decline of UT’s investment portfolio.
And before you get righteously indignant, read the article from the San-Antonio Express News:
AUSTIN — Robert Rowling said Friday that he won’t reconsider his abrupt resignation a day earlier from a panel that oversees the state’s higher education fund after a heated exchange with state leaders over $3 million in bonuses paid to fund managers.
Rowling, a Dallas businessman who owns the Omni hotel chain and is listed by Forbe’s as the 55th-richest American, was still steaming from what he called “pretty brutal” treatment Thursday morning when he appeared before the Senate Finance Committee. “They made it sound like we raped and pillaged the taxpayers of the state giving those bonuses,” he said.
Rowling stunned senators by announcing his resignation as chairman of the University of Texas Investment Management Co. board of directors during harsh questioning at the Capitol. He later stepped down as a University of Texas regent, a post he had held for more than four years. (The regents had named Rowling to the UTIMCO board.)
Sen. Kevin Eltife, R-Tyler, had called the bonuses — $1.05 million given to UTIMCO President Bruce Zimmerman and $2.3 million to other staff — “shameful” at a time when the fund is down 27 percent and people are losing their jobs.
The bonuses also had been criticized by Gov. Rick Perry, who appointed Rowling to the UT board, and Lt. Gov. David Dewhurst. They wrote a letter to Rowling on the eve of the Senate committee meeting, saying the bonuses were “irresponsible given the financial crisis that is spreading across our nation.”
Another UTIMCO director said Friday that he expects the board to revisit the bonuses at a future meeting. Charles W. Tate, a Houston investor, said he thought the bonuses were appropriate.
No one said whether the bonuses could be rescinded, since 70 percent of the money has already been paid out.
The bonuses were based on the fund’s performance from July 1, 2007, to June 30, 2008. The two funds earned positive returns of 2 percent and 2.4 percent, which Rowling said exceeded expectations.
The board signed off on the bonuses in November, when the fund’s earnings had dropped an estimated 23 percent.
“We had made an agreement with the staff that if they met their performance goals, we would come through and compensate them,” said UTIMCO board member Clint Carlson, a Dallas investment manager.
So, to summarize, the UT Board was going to pay $3 million in bonuses. These bonuses were based on the performance of UT’s investments, which exceeded expectations through June of last year. Just for the record, here’s a chart of the market for the last year or so. June of last year starts just after the line that mark the market’s high on May 2nd, 2008 at 13012.53:
(You can find the Interacgtive version of this chart HERE.) You can see from the legend at the bottom that even in June of last year, while the market had started downward, it still was above 12,500. Friday (2/6/09) the market closed at 8280.59.
That means that, as of Friday, the market has declined 36.4% since last May. Did you read that line in the article that the investment portfolio for UT has only declined 27%?
That means the UT protfolio is running ahead of the market by 9%. Pretty damned good in a serious recession, I’d say. But don’t get too used to that – Bob Rowling just told the UT system and Governor Perry to screw themselves.
Expect tuition hikes in your future.
Good move, Governor Perry. Fine Job, Lt. Gov. David Dewhurst. NOTE to State Sen. Kevin Eltife (R-Tyler); I expect this type of demagogery from damned Democrats — NOT Republicans.
Great move, Texas legislature. What the Hell is wrong with you?