Bob Stein and John Curry re: Bonus issue

From John Curry, September 28, 2009
Subject: Stein to Curry. re. bonus issue

Bob,

Thank you for your prompt reply.

From Bob Stein, September 27, 2009
Subject: Re: Bob...a campaign promise...you would vote against the bonus plan but you would vote FOR paying the associated bonuses?

John

I don't know for a fact that anyone threatened anything. I won't speak for others and I think that presuming that threats were made could create a misunderstanding that might give unfair impressions. That could be more problems. There was a case in the past that I thought was similar. The case is public record and Kathie had it on her blog a few days ago. The total cost to STRS was a significant multiple of the value in dispute. Given that observation, combined with much of what was said by others in public session, I did not see a benefit sufficient to compensate for the risk of voting "no" on last year's PBIs.

I'm still doing what I said I wanted to do on the web page you cited, my statement in the April 2009 STRS newsletter, and in all but my earliest campaign literature. I looked. The only thing that has changed since that web page was written is that the 2009 PBI plan was replaced with a 2010 PBI plan that addressed some of the return measurement issues. The processes that created a 2009 plan that was apparently not well enough understood by the membership have not been completely addressed -- but those processes were not part of the PBI motion. The misunderstanding about the 2009 PBI plan also might be as simple as a collection of oversights by the membership -- not realizing that the stock market could go down or that STRS had exposure in that area. Knowing that, how many people have read the entire 2010 PBI plan? Are we setting ourselves up again?

Another interesting current oversight might be revealed by comparing the audio record of the PBI discussion at the Sept regular board meeting with the statements you noted on my web site. The prepared comments of even those who voted "no" on the past PBIs are consistent with almost everything on my web site, most of what I wrote into my statement (which I didn't read at the board meeting), and nearly everything I find reasonable on the topic. You can also see this clearly in comparing Ms. Ramser's public comments with those of Mr. Brooks and Mr. McGreevy. The distinction between a "no" and "yes" vote looks primarily like a difference in degree and time frame rather than a difference in fundamental values. Nobody took this lightly and everyone made the choice that had the highest probability of a decent outcome for STRS in their best judgment. That's why there are multiple board members.

With regard to my lack of public comment after the vote -- for the reasonable future, I will take the "required to be kept confidential by Ohio law" statements read at the beginning of executive sessions more literally than some. Perhaps I will outgrow that but would rather be too strict than expose STRS to loss with an incorrect judgment about what I can say in public. You will note that nothing I've said here references anything outside public knowledge. I plan to err on the side of caution. My charge is to be a fiduciary to STRS and its future not to be a communicator after the fact. Nasty emails and phone calls make me feel bad but are a price that I'm willing to pay if there is a potential to save STRS some money or saves the board time that it could spend on productive issues.

Looking back, I probably should have read my prepared comments into the public session. Maybe I should have abstained from the vote because the 2009 and 2010 PBI plans were both in place before I took my seat. It is fortunate that those two omissions resulted in people reacting against me but will have no effect on the implemented policy.

I hope this satisfies most of us. I can think of nothing else to say.

Thanks for following to this point.

Bob Stein