Stanford’s President Has the Hookups

Interesting piece (unfortunately behind the wall) in this weekend’s Wall St. Journal about John Hennessy, Stanford University’s president.

According to the article, Mr. Hennessy has substantial ties to Silicon Valley-area businesses including Google, Cisco and VC firms Kleiner Perkins Caufield and Byers, Sequoia Capital and Foundation Capital.

Through former company’s he founded, board seats and his salary from Stanford, he pulled down $1 million in November 2006. Yes, in one month!

According to the article,

In the past five years, through exclusive investments and relationships with companies, Mr. Hennessy has collected fees, stock and paper stock-option profits totaling $43 million, securities filings show. That dwarfs his $616,000 annual compensation at Stanford, where he has been president since 2000.

Some question the focus of a president who not only sits on corporate boards, as many university presidents do, but also one who invests in startups from his campus, invests in VC funds who also give money to the university and who have access to companies founded and started on his campus. Sitting on the board that determines which receive VC funds will invest in the university’s endowment seems to cloud the picture even more.

In all fairness, the university’s board is aware of Mr. Hennessy’s involvement in the local area investment and startup community and approves of it. Based on the fact that Stanford significantly out-fundraised Harvard in 2006 significantly, I’m imagining that the university is grateful for the ties to the investment community that Mr. Hennessy has developed.

So What? Should a university president be so intertwined with area companies, VC’s and even startups from his campus? That’s a hard one. Clearly, his ties to the community only help his students with access to the incredible technology and investment companies in the area. At the same time, how much of his job is about fundraising and getting Stanford-based startups funding? These requirements vary from school to school and therefore, I’d be hardpressed to critique.

However, if his extra-curricular activities are interfering with his job and his investment relationships are influencing his judgement regarding the school’s endowment, then I would say that Mr. Hennessy is in way over his head and needs to back it down.

Tags: Stanford, John Hennessy, Google, Cisco, Kleiner Perkins, Sequioa Capital, Foundation Capital, investment, VC, endowment

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