Under increased scrutiny from bond-rating agencies and weeks after a presidential search appeared to have failed, Birmingham-Southern College has a new and unlikely leader. Gen. Charles C. Krulak, a retired commandant of the U.S. Marine Corps and former member of the Joint Chiefs of Staff, will take over the financially struggling institution on June 1, officials announced on Monday.
Declaring he intended to restore the college’s fiscal health, General Krulak said he would forgo his first year’s salary.
“I’m not naïve; we’ve got challenges,” General Krulak said. “But those challenges, in my opinion, can be overcome.”
The college’s board initially offered the position to Rodney K. Ferguson, a partner at the Brunswick Group, a public-relations company in Washington. Mr. Ferguson, however, turned down the job last month, saying the move wasn’t right for his family.
General Krulak will succeed Mark Schantz, who has been interim president since the resignation of G. David Pollick, who quit last August as the college’s fiscal problems mounted. Mr. Schantz will return the position of provost, the college announced.
As a result of what current and former officials describe as the overawarding of financial aid, extensive borrowing, and budgets derived from inaccurate financial data, Birmingham-Southern faces an $8.5-million shortfall, about 17 percent of its $49-million annual budget. The college is also weaning itself off years of overly aggressive spending from its endowment.
Birmingham-Southern’s trustees have said they plan to personally support fund-raising efforts, and General Krulak said his primary role would be to bring in more money through private gifts.
The challenges the college faces have prompted Moody’s Investors Service to repeatedly downgrade Birmingham-Southern’s bonds, which were again downgraded this month. Colleges in the Caa category, where Birmingham-Southern is now rated, are considered to be in poor standing and a “very high credit risk,” according to Moody’s.
No Compensation
General Krulak acknowledged that restoring confidence in the institution’s finances would be crucial for assuaging the concerns of ratings agencies, students, faculty, staff and alumni.
“There is a financial risk, and there’s reputational risk,” he said. “The financial risk you can overcome. That’s hard, but you can overcome it. To overcome a reputational risk is difficult, and therefore that’s the one that concerns me most.”
While he may be a nontraditional candidate, General Krulak brings fund-raising experience to the job. In his current position as co-chairman of the Founders Group of the Marine Corps Heritage Foundation, he has helped raise more than $150-million for the National Museum of the Marine Corps.
“The reality is, the most difficult part of fund raising is ‘The Ask,’ and I have no problem with that,” he said. “We’ve got a very, very compelling story here at Birmingham-Southern.”
General Krulak said he wanted to send an immediate message of solidarity to the campus, where the last year has been marked by pay cuts, reduced benefits, and program and position eliminations. He not only asked the board to waive his salary for the year, but also gave up other perks common in presidential contracts.
“I am getting no compensation for this job for this year,” General Krulak said. “They wanted to do something for a car, and I said, ‘No, read my lips.’”
Mr. Pollick, the college’s last permanent president, collected about $372,900 in base pay in 2008-9, according to tax forms. General Krulak said his pay would be similar.
‘Not Like Jack Nicholson’
Nontraditional candidates, including those with military backgrounds, are not new to higher education. At the same time, however, General Krulak said there were probably some on the campus who were skeptical about how he might get along in an academic environment.
“They did some referencing,” he said, “and out of referencing they discovered I was not like Jack Nicholson in A Few Good Men.”
Randall Law, an associate professor of history, said some professors initially wondered whether the general fully appreciated that “faculty don’t respond to orders the way that Marines do.” But after General Krulak met with faculty members, assuring them that he respects the role of professors in shaping the curriculum, excitement built around his candidacy, said Mr. Law, co-chair of the college’s Faculty Advisory Committee.
Mr. Law, who has studied military leaders for his scholarship on the history of terrorism, said he saw a lot of benefits in General Krulak’s background.
“You have to be political” as a military leader, Mr. Law said. “You have to be diplomatic, and you have to be a good manager of an organization. You have to be able to articulate that organization’s mission very well.”
In a news release of more than three pages, Birmingham-Southern zeroed in on General Krulak’s post-military experiences, drawing the picture of a war-strategist-turned-CFO. He was chairman and chief executive officer of MBNA Europe Bank, in Chester, England, before becoming vice chairman and chief administrative officer of MBNA America Bank N.A., in Wilmington, Del. In both positions, college officials touted the general’s effectiveness in improving profitability.
During an announcing ceremony on the campus on Monday, General Krulak was frequently interrupted by applause.
“You all know my background. I do not use the word honor lightly,” he told the audience. “So let me say it again, I am honored to be the president of Birmingham-Southern College.”
