Capital Rewards

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Congratulations to Vikram Pandit, who is about to go from exceedingly loaded to unbelievably loaded. Pandit is a triple Columbia alumnus, having earned both bachelor’s and master’s degrees in electrical engineering in the 70s before selling out to get a PhD in finance in 1986. Yesterday, he was named CEO of Citigroup, a company worth approximately a shitmegaton of cash. Earlier this year Pandit sold Citigroup a hedge fund, Old Lane Partners, for a cool $800 million; now he is once again is in control of his old company, along with a laundry list of unbelievably huge assets including the bank inside Lerner. And he’s still on Columbia’s Board of Trustees. Tao Tan has a long way to go.

In other news, Harvard is making sure the fairly well-off can keep up with the truly moneyed. For families making between $120,000 and $180,000, costs will be hewed in twain! Other “elite institutions” are expected to jump on the bandwagon. Will Columbia put its money where its mouth is?

Whether or not it does, you can still pretend to be elite on New Year’s eve. The Columbia Club is offering tickets to a veritable swankfest at the classy Opus 22 lounge downtown. According to Newsday, it’s where to go if you’re looking for “smart, young energy,” and for only $135 a ticket if you buy by Friday, it’s practically a steal. Alumni from Yale, Cornell, Princeton, Penn, and Brown will also be there, so you can get your inter-Ivy network on along with your party.

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  1. ttan

    Just did some deeper checking. This man is actually a FOUR-time Columbia alum, having picked up an MPhil on his way to a PhD.

  2. Tao Tan  

    will masquerade as a star trader, only to blow a shit-load on an absurd trade. He will then be arrested for fraud and douchebaggery in an unrelated SEC probe. You heard it hear, first.

  3. realitycheck

    $120,000 is not that much for a family that pays $50,000 or more each year in tuition- and that's if they only have one kid in college.

    • realerrealitycheck  

      "$120,000 is not that much" is a ridiculous statement for 90% of this country's population. sorry you decided to go to an expensive school, but it seems you're the person who needs the real reality check.

  4. friend of tao  

    Tao, no one cares about the MPhil once you get the's like a consolation prize for people who can't finish a dissertation.

    And #2, the SEC doesn't have jurisdiction in Australia....

  5. newsday  

    should definitely not be your source for a good party

  6. realreality

    It seems like you're a person who could use a slap in the face. The truth is that the cost of a college education is prohibitive even for people making $120,000 a year. A high quality education should be available to all, and shame on you for deriding anybody's choice to pursue it.

  7. Tao Tan  

    Do you regret dropping out of SEAS? I bet you do.

  8. DHI  

    Completely true, but $120,000 is still a relatively high income in America, so I'd say "fairly well-off" is fair. The cost of these colleges is high enough that you can be fairly well-off and have trouble paying.

  9. hmm  

    i'm not sure if i'd want to be in pandit's shoes. making the subprime problem go away is not an easy task. although, i'm sure there are sweet incentives for pulling the rabbit out of the hat.

    lets just hope for the sake of the economy he doesn't try anything shady.

    • ttan

      That place needs to be broken up. Too many distinct and powerful intra-corporate personalities chafing under the tyranny imposed by Sandy Weill. There's still traders that answer the phone "Salomon".

  10. GS, JPM, LEH, MER  

    Fuck Shiti-Group. We've been laughing at them for years at other banks.

  11. MS  

    Fortunately, Pandit will use his Morgan Stanley skillz to haz the cheezburger away from JPM/BoA.

  12. ..d93  

    IF ttan is a star trader, why did his firm send him off to Australia and not keep him in New York? Isn't that even worse than being sent off to Houston.

  13. taoschildhoodfriend  

    that kid is a star trader, believe me. one time, dude came into school with a single lunchable, and he was rolling in pepperonis, oreos, dunkaroos, and blt sandwich by the end of the day.

  14. judgment

    tao picked the right dollar to earn, I think. haven't you noticed all the foreign tourists coming here recently to shop? that's right. they own us.

  15. it's obvious  

    I think we beat up on ttan 'cause he's smart, ambitious, good looking, and Asian. White people, be afraid, be very afraid.


  16. well

    Regarding Columbia matching harvard...

    You'll notice that the schools with the "big" financial aid initiatives (Harvard, Yale, Princeton) are on a planet of their in in terms of financial resources.

    If Columbia were to say, triple, it's endowment overnight, then yeah we'd be in the ballgame.

    More importantly, we're waiting for Kluge (god bless his generous financial aid endowing Columbia loving soul) to croak...

  17. endowmenter  

    The 7.2bil$ on wikipedia - does that include Kluge's 400mil$?

    • ttan

      No, Kluge's donation doesn't happen until he passes away. The $7.2 bn is strictly endowment performance, which at roughly 20% is quite impressive.

      Until you read the fine print and realise that Columbia's fiscal year ended 30 June 2007, ergo, this doesn't including the hammering that US securities markets have been taking since August.

  18. hmm  

    According to the Wikipedia table, Princeton has roughly twice our endowment, and an endowment per student of roughly 1.9million. But in the endowment per student list, we don't even seem to have $10,000 per student. Where am I messing up? Surely Princeton doesn't have too many fewer undergrads than we do?

    • EAL  

      No, but we have a shit ton of grad schools in everything from law and medicine to dentistry and social work. Plus there's GS. We simply have too many schools here, and thus the endowment gets stretched enough that you're left with a lower endowment per capita than perhaps any other Ivy League school save Cornell.

      The solution? Give more! How else do you think HYP got so rich? Their alumni give; ours, for some odd reason, do not. That's gotta change if we ever want to be considered on the same level as them. So start forking over the dough. I know I will.

      • think harder  

        It's not so simple as that. HYP alums tend to be better off after college than kids from Columbia. Columbia is still suffering from the 80s when reputation was downhill and acceptance rate was like 50%. The people from the 80s - who are of age to give back right now - didn't do as well as their HYP peers. That's why there'a slump.

      • ttan

        The problem with just wanting alums to give more is that there is a long, long, long history of distrust between the alumni and the administration du jour over the use and misuse of alumni funds. College alumni especially felt shafted in the early 20th century when they gave money to the College, only to see it diverted for the purposes of the university. Witness the sixty-plus years University Hall sat unbuilt, waiting for alumni funds to complete it:

        Even today, if, say you gave money to the College Fund for the Core Curriculum, how do you know that that money, instead of being used to hire and retain the best teachers for the Core, can't be used instead for, say, Jeffrey Sachs to fly in the Prime Minister of Malawi and put him up in the Peninsula Hotel for a few days so he can attend an Earth Institute World Leaders Conference on Globalization, Sustainable Development, Neuroscience, and the Core Curriculum?

        You don't.

        The problem isn't that Columbia alums aren't giving. It's that they aren't "giving smart". Ploughing money into something without making absolutely sure that they are being used to their intended purpose 1) opens the possibility that they will be diverted to other projects, which 2) disillusions future giving. Giving to Columbia or to any charitable organisation is not a one-way blank check. It's incumbent on both parties to work out how the monies will be used and to ensure that those guidelines are followed.

        The only places I can think of on the undergraduate level that are either institutionally protected enough or separate enough to guarantee that received funds and put to their intended purpose are:

        1) Athletics. Unless someone dreams up a Committee of Global Thought Distinguished World Leaders Conference on Globalization, Sustainable Development, and Athletics. Seriously, that department needs help -- although a lot of people have legitimate concerns over M. Dianne's stewardship thereof.

        2) Financial aid. As the most visible and most sacred fundraising initiative, it would be near-impossible for any misappropriation to happen here.

        3) The Friends of the Heyman Center. This organisation was established by Professor Wm. Theodore de Bary and is the vanguard for providing professorial talent, both on the junior level (through Society of Fellows fellowships), and on the very senior level (by bringing back emeritus faculty through the Society of Senior Scholars) and frankly, if you ask me, is more effective than any adminstrative organisation on campus in keeping and maintaining the standards of the Core. The Heyman Center's focus in recent years has turned decidedly undergraduate-agnostic, if not undergraduate-unfriendly, when Prof. de Bary handed the directorship to Prof. Akeel Bilgrami, who takes a different view on the focus of the Heyman Center, but the programs there that benefit the Core have near-bulletproof funding structures and provisions. It's where I concentrate all of my giving. Plus, if you give through a tax structure known as a Donor Advised Fund (DAF), not only do you get certain flexibility through taxes, but you can also *require* a periodic report on the use of your gift.

      • ttan

        The best thing I can think of is what the Yale Class of 1954 did. They saw their university was doing stupid things and decided to withhold all alumni donations directly to the university, putting it instead into a separate investment vehicle that would be held until such time that Yale University decided to take alumni concerns seriously.

        It took a few years, but in 2004, in time for their 50th reunion, the Yale Class of 1954 contributed the proceeds of their investment vehicle, by that time over $100 million.

        I mean you should definitely give back to your alma mater. But perhaps its best to apply both a carrot and a stick, instead of just gorging the institution. That way you can ensure accountability and incentives can apply in both directions.

  19. donations

    Athletics wouldn't be on the top of my list.

    • ttan

      That list isn't in any particular order. Except maybe alphabetical. Friends of the Heyman Center tops my list.

    • EAL  

      Ah, but athletics would be at the top of mine. If we ever want to have a chance at winning an Ivy title in football or basketball, we should be diverting more money to those programs. The football team is already getting a new training facility at Baker. Our training facilities are already the worst in the Ivies, and this makes athletic recruitment tougher for us (well that and the abysmal records of football in the past 10 years). But the key to improving those sports is funding and long-term commitment. Believe it or not, Penn used to suck at football, but in the 90s the school began to focus on it more and ended up with a championship-winning program.

      The best thing about having good athletics is that it instills pride in undergrads and alumni, something that Columbia sorely lacks compared to its Ivy peers. In short, an Ivy championship (or at least consistent winning) will translate to greater giving over time. Norries Wilson is the right coach to turn football around, as is Joe Jones with basketball. One need only give them more time, and with some solid recruiting classes (and improved facilities) athletics should be back on its feet.

      Besides, I believe our newly-minted varsity squash team could use some world-class facilities (Dodge courts are the wrong size), and Manhattanville would be a great place for them. I hope people recognize the value of that place for athletics facilities.

  20. forget athletics  

    Our undergrad programs have got to get better. Talented HS applicants are not attracted to schools with good athletics programs. They go to the schools with the best undergrad education, and in that respect, we lag far behind HYP. If you want more donations, try to grab the smarter applicants.

    • undergraduate

      I disagree with you that we lag behind "HYP" in that respect. It's a matter of perception. Our undergraduate offerings are far more demanding. That's not to say that each doesn't have their merits.

  21. ..d93  

    Another big problem is that we attract too many crazy radical leftists. Those guys come here, protest, make us look bad, then fail to get a decent job.

    Instead, we need to attract more future i-bankers by telling them that Columbia's location near wall street will get them filthy rich. So what if that means we have more rich legacy kids or jocks. They're the people who'll actually get decent jobs in finance, earn lots of money, and donate back to the university. Go capitalism!

  22. focus

    I don't like radical leftists at all, but I also don't like the idea of ideological standards for admission- not that they would ever be applied in the way you want them to anyway in this institution. I also don't think that our admissions committees should screen for people whose sole ambition in life is to accrue wealth. They should admit scholars with a passion for learning and/or service. We are an educational institution, after all, and, as such, we should aspire to more than just transitory accomplishment.

  23. ugh  

    you guys crack me up. the reason this school's endowment is weak compared to it's peers has nothing to do with too many graduate schools, gs, the 80s shitshow, "radical leftists" or a lack of future wannabe banker-wankers.

    the reason why this school is comparatively poor is because it is located in new york city, plain and simple. what costs $1 in cambridge, princeton or palo alto costs $3 here.

    end of story.

    • ugh?  

      Except that Columbia owns all its property, which is the only thing that *actually* would have an index 3 times those other places. A cheeseburger at a restaurant might cost $10 here in the city, but you're not going to get it for $3 near Harvard. I don't think the cost of living really makes that much difference.

      If more of our alumni stay in the city, it could affect giving rates though.

      • not true  

        $.67 to $1 was in new york magazine last year.

        beyond that, here's the rub: if you want to attract talent, you have to pay a salary that is going to support the same quality of life that could be had elsewhere. why would a professor want to come to columbia unless he knew that he would be paid well enough so that he could purchase property someday?

        in the same vein, suppose cuit needs a new director. if they want to get somebody good, they're going to have to compete in the nyc job market, which is full of companies that pay ridiculous salaries. (stanford may have this problem, although it management is in the lower strata out there)

        even nyc based graduate students receive more in stipend than their suburban peers. (granted, that comes out of outside funding, but it's still worth noting that the bottom of the totem pole gets a bump)

        new york city is a union town, much more so than the 'burbs. want somebody to fix the a/c, it's going to cost more here than in palo alto.

        want to build a building? MUCH more complicated and expensive than in the 'burbs.

        hell, even a simple lab renovation is a major performance here. construction takes longer, therefore is more expensive.

        plus only god knows what absurd sorts of taxes are assessed by the city.

        cost of living is high in nyc, but so is the cost of doing business. i argue that the nyc multiplier for cost of doing business is significantly higher than the nyc multiplier for personal cost of living.

        • Staff wages

          Staff and faculty wages are only about a third of operating expenses. It's the shitty annual giving levels which are crippling the endowment, although that has more to do with the condition on NYC in the 70s and 80s than idiot leftists (as much as they like to think it did).

          But endowment isn't that important, producing about 1/4-1/3 our income. Our annual expenditures - which also comes from tuition, government grants, patents etc. - are higher than Harvard's. This is how much money is actually spent on things. Endowment money is locked up and at Harvard and Yale (and Columbia too) is earmarked for disproportionately stupid things like hockey rinks and scholarships for people whose last name begins with 'Q'.

          If endowment where as important as people think it is, wouldn't Harvard produces 5X as many scientific citations as Berkeley or Columbia (roughly how much bigger its endowment is)?

          • Yes but  

            there's a limit to how much you can cut your costs, whereas there's a lot of upside to how much we could potentially increase our endowment, and this is money that we can raise and grow relatively quickly.

  24. SSA  

    I don't think it's $3 to $1. I remember reading a newspaper article or maybe this was in the Economist that $1 in America is worth $.67 in New York. That was a few years ago, so let's reasonably say what $1 can buy you in America outside the major cities, can only get you around $.60-.70 in NYC. It is a damn expensive city.

    Columbia doesn't release any financial statement information, does it? Because if we could compare its Balance Sheet/ Cash Flow Statement to that of Harvard's, we could come up with a better analysis. But since these organizations keep that info under close scrutiny...

  25. alum

    With such a huge endowment a place like Harvard has the money to go out and buy the top talent in almost every department in which it wishes to compete. Notice graduate school rankings. Harvard seems to be near the top across the board, while Columbia is only truly strong in a few areas, and decidedly a tier below the top in most. As Columbia's endowment has expanded in recent years it has the ability to increase the number of areas in which it can compete (see the great strides the econ department has made).

    As for the role New York City plays , I agree with Bollinger when he says that a dollar at Columbia goes further than anywhere else. New York City draws faculty and students to Columbia it could not have gotten if located anywhere else. Columbia could compete on par with HPY even before reaching their endowment levels.

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