After a year-and-a-half-long review, St. Paul’s School and the New Hampshire Attorney General reached a settlement last weekend that limits the salaries of the school’s two highest officials. The Attorney General’s inquiry into St. Paul’s finances began in the fall of 2002, prompted by concerns about the salaries of Rector Craig Anderson and Vice Rector Sharon Hennessy, as well as by issues regarding the use of the rector’s discretionary fund. Because the school is registered as a charitable organization, the review was conducted by the New Hampshire Department of Justice’s charitable trusts division, and the agreement was mutually agreed upon by both St. Paul’s attorneys and representatives of the division. In the agreement, top administration officials at the boarding school agreed to take voluntary reductions in compensation. In the 2004-2005 school year, Rector Anderson will receive $452,000 in salary and Vice Rector Hennessy will reduce her salary to $297,000. This is a 10% reduction from their former salaries of $502,200 and $330,000. The agreement also stipulates that future increases in salary for the Rector and Vice Rector cannot exceed the percent increase for other faculty members. The second concern addressed by the New Hampshire Attorney General’s Office regarded the use of the rector’s discretionary fund. Rector Anderson allegedly used $24,000 of this fund to pay for such expenses as yacht and country club fees in Boothbay, Maine, the site of the Rector’s summer residence. Earlier in the course of the review, St. Paul’s School and the New Hampshire Attorney General agreed to institute “internal controls” that would ensure proper use of the discretionary fund. Additionally, all of the school’s audits will be made public, and St. Paul’s has agreed to assist its peer schools in the filing of financial information. In regard to issues of governance and investments, St. Paul’s School appointed a number of financial experts who will work to ensure that the school uses the “best practices” in the charitable sector. The agreement comes as a relief to many parents and alumni who had been critical of the compensation received by the Rector and Vice Rector. In addition to their salaries, Mr. Anderson and Ms. Hennessy had reportedly received a number of perks. Ms. Hennessy was given membership to the Canyon Ranch Spa and a vacation in the south of France. During the course of the investigation, the New Hampshire Attorney General’s charitable trusts division also expressed concern over the Rector’s $1,799 in moving expenses, $1,984 in automobile repairs, and $3,432 for a program at the University of Colorado. The Rector is allowed $25,000, but these expenses, according to the attorney general’s office, exceeded this amount. Both St. Paul’s School and the Attorney General’s charitable trusts division have expressed satisfaction with the agreement that was reached. Attorneys for the school have admitted to no wrongdoing on the part of either the Rector or the Vice Rector. The investigation came during difficult financial times for the New Hampshire boarding school, which, like its peer institutions, suffered from the recent economic downturn. As St. Paul’s sought to reduce expenses, 12 positions were recently cut, and eight staff members lost their jobs
