Jim Stoll to Bob Stein re: PBI Plan/McLagen and Threat of Lawsuits

From Jim Stoll, October 23, 2009
Subject: Re: PBI Plan/McLagen and Threat of Lawsuits

Bob,

I took your advice after our phone conversation and emailed, PER YOUR REQUEST, both Mr. Neville and Mr. Patterson the question of how, if they wrote the Board Policy Language, after the 2003 employee lawsuit, why we should now fear one from investment associates. Was their language or work not diligent enough. What case law would suggest we'd lose such suits if they were filed? etc.

That was one month ago. I have yet to receive any response from either. So, I'd like to revisit these questions with you.

Also, and perhaps just as disturbing, if I'm reading the Board minutes correctly. Is it correct that we have entered into another compensation consulting agreement of $35,000 with McLagen? Please tell me that I read this wrong? Won't STRS leadership or the Board ever learn from past mistakes?? This is the same company that gave us the current PBI Plan which as you state below has been changed and recognized as extremely flawed by the Board at least several times in the past two years.

Why in the world wouldn't we have gone with another reputable company or better yet - recruit compensation experts from STRS membership who teach compensation courses at Ohio's finest universities - who would have done the study for free or at greatly reduced cost. I can't believe we would go back to a company (McLagen) whose past performance has, in my opinion, simply been horrendous.

Bob Stein writes: And I quote: "Look at how many times the STRS board has modified the compensation package of their investment staff in just the last two years. We still haven't completed our plan for the current fiscal year that we are almost halfway through."

McLagen gave us the flawed plan in the first place! Unbelievable! Please note that according to the minutes you seconded the motion to approve McLagen as the vendor. After all the heartache and and headache their last compensation analysis cost the Board and members they should have volunteered their time!

Jim Stoll
Sycamore Schools
7400 Cornell Rd.
Cincinnati, Ohio 45242
513-615-4690