NEW YORK (JTA) — Richard Joel, the president of Yeshiva University, announced that he will step down by the end of his current term.
Joel, 65, made the announcement Thursday in an email sent to Y.U. staff, students and alumni, and obtained by JTA. His term is set to expire in 2018.
“I am well into my 13th year of the presidency and the 28th year of leading Jewish educational institutions,” Joel wrote. “When I accepted a third term as president, I informed our chair, Henry Kressel, that it would be my last. As we now are poised to advance, I have asked chairman Moshael Straus to begin the process of transition and to identify and recruit my successor. This wonderful and committed lay leadership deserves to have the time to be deliberate in that process.”
Joel’s tenure at Yeshiva University, considered the flagship institution of modern Orthodoxy, has coincided with a severe decline in the university’s financial health.
The first major public financial hit to the university came in 2008, when the Bernie Madoff Ponzi scheme caused significant losses to the Y.U. endowment and many of its major donors.
But as the health of the overall economy improved, Yeshiva’s losses grew, and Y.U. has run an operating deficit for seven straight years. It lost $84 million in 2014 — despite the sale of some $72.5 million of real estate and staff cutbacks, according to audited financial statements cited in the Forward — and lost $64 million in 2013.
In an interview Thursday, Joel told JTA that he anticipates neutralizing those losses by the time he steps down in 2018.
“We will be sustainable,” Joel said. “It’s going to take a couple of years to be in a cash-positive situation, and I am committed to leading us there.”
The lead item in Joel’s email on Thursday was the announcement of the signing of a deal to transfer the operations and finances of Y.U.’s Albert Einstein College of Medicine to the Bronx-based Montefiore Health Systems.
Y.U. has been attempting to offload Einstein for some time. The medical school was estimated to have been responsible for two-thirds of Y.U.’s annual operating deficits, according to Moody’s investor service. The university first announced in May 2014 that Montefiore would take over operational control of Einstein, but the deal fell apart several months later.
Joel’s email cited several other recent positive developments at the university: a new $15 million gift from Mordecai and Monique Katz; the planned launching of a new School of General Studies and Continuing Education; the planned offering of an online master’s program in marketing; and an increase in net undergraduate tuition revenue by nearly $6 million over the past two years.
“We have just launched a Strategic Planning and Restructuring Implementation Team to carry the restructuring forward,” Joel wrote. “Now we are moving from restructuring to an academic and operational turnaround.”
Joel’s retirement announcement came at the end of the letter.
As president, Joel ushered in several other notable changes at the university. He initially added faculty positions before cutting back as the university’s finances worsened, but the faculty today is larger, better paid and includes more tenured positions than when Joel took over in 2003, he told JTA.
Joel also spearheaded construction of the new Jacob and Dreizel Glueck Center for Jewish Study, which opened in 2009, and established several new centers that sought to strengthen Y.U.’s ties to the Orthodox community beyond the university, including the Center for the Jewish Future, the Center for Ethics and the Center for Israel Studies.
But Joel’s tenure was marred by the unfolding of a sex scandal related to physical and sexual abuse that occurred at Yeshiva’s high school for boys in the 1970s and ’80s. A university-commissioned investigation of the allegations, first detailed by victims in the Forward newspaper, found that “multiple incidents of varying types of sexual and physical abuse took place,” perpetrated by faculty members in positions of authority and continuing even after administration members had been made aware of the problem.
Rabbi Norman Lamm, who led Yeshiva during much of that time, issued a public apology for his mishandling of the allegations, and former students filed a $380 million lawsuit against the university. The suit was dismissed due to the statute of limitations.
At around the same time the sex scandal was making news, Moody’s downgraded Y.U.’s credit rating to B3, indicating a high credit risk, and warned that the school could run out of money before it had time to address its deep deficits.
The severity and long duration of Yeshiva’s operating deficits are primarily due to weak financial management and the board’s unwillingness or inability to act,” said a Moody’s report in March 2014 that warned the university could run out of money in 2015. “Historically ineffective internal controls and limited transparency contributed to an inability to identify and correct problems.”
In March, the undergraduate faculty overwhelmingly passed a nonbinding no-confidence motion against Joel, prompting the board to issue a statement supporting him. The board said it was working with the outside advisers Alvarez & Marsal to implement a new financial plan and identify areas for streamlining and realignment.
In his interview with JTA, Joel said significant progress had been made on the financial front.
“You have a Yeshiva University that’s now transformed,” Joel said. “Academically, it’s in a wonderful place. In a financial way, it’s in a turnaround place.”
He said he decided to announce his intention to step down in 2018 now in order to give the university sufficient time to find a successor – no easy task given the special character of Yeshiva both as a university and a religious institution. (Joel also denied an earlier JTA report suggesting that he might step aside before 2018 if a successor could be found earlier.)
“It is exceedingly challenging to find that person,” Joel said. “It’s a person with hopefully traits and convictions that are a match for what people call the flagship for modern Orthodoxy, but who also has the capacity and the agenda to lead people and deal with the everyday vicissitudes that come with this job.”
The two critical aspects of the job, Joel said, are finding someone who shares and embodies Yeshiva’s commitment to Torah and secular studies — and who can be a good university CEO.
In 2013, Joel was paid $873,337 and earned an additional $397,973 in other compensation, according to the university’s public tax filings. In 2012, he was the 24th highest-paid university president in the country, according to The Chronicle of Higher Education.
Before being named to Y.U.’s top post in 2003, Joel was president of the international Jewish student group Hillel. He was the first non-rabbi to lead Yeshiva, which was founded in 1886. Each of Joel’s three predecessors at Yeshiva had significantly longer tenures. His immediate predecessor, Lamm, led Y.U. from 1976 until 2003.
(JTA’s Marcy Oster contributed to this report.)