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 YU staff, students and alumni, and obtained by JTA. Joel’s term is set to expire in 2018, but an official associated with YU told JTA on condition of anonymity that Joel has agreed to step aside earlier if a successor is found and can begin before the term ends.
“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 YU endowment and many of its major donors.
But as the health of the overall economy improved, Yeshiva’s losses grew, and YU 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.
The school’s Albert Einstein College of Medicine is estimated to have been responsible for two-thirds of YU’s annual operating deficits, according to Moody’s investor service.
In Thursday’s email, Joel announced the signing of a deal to transfer Einstein’s operations and finances to the Bronx-based Montefiore Health Systems. YU has been attempting to offload Einstein for some time. The university first announced in May 2014 that Montefiore would take over operational control of Einstein, but the deal fell apart several months later.
Around that time, Moody’s, which had downgraded YU’s credit rating to B3, indicating a high credit risk, 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.”
This past 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 email Thursday, Joel said significant progress had been made.
“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.”
Among the positive developments Joel cited were 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.
Joel’s retirement announcement was buried 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; he spearheaded construction of the new Jacob and Dreizel Glueck Center for Jewish Study, which opened in 2009, and he established several new centers that sought to strengthen YU’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.
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 YU’s top post, becoming the 129-year-old university’s fourth president, Joel was president of the international Jewish student group Hillel.
Each of Joel’s predecessors at Yeshiva had significantly longer tenures, and Joel was the first non-rabbi to head the institution. His immediate predecessor, Rabbi Norman Lamm, led YU from 1976 until 2003.