Stanford Confidential: Sex, Lies And Loathing At The World’s No. 1 B-School

Stanford University Graduate School of Business – Ethan Baron photo

CLAIMS OF FINANCIAL SABOTAGE

Beyond the claim that Saloner engineered his ouster, Phills’s accusation that the dean attempted to sabotage him financially centers on loans that Phills and Gruenfeld took from the university. The $250,000 in loans at issue in the case are the GSB-controlled portion of $1 million the couple borrowed through university and GSB faculty home-loan programs to build a house on campus in 2005. Phills and Gruenfeld had received $250,000 in “exceptional” loans beyond the $750,000 limit of the Stanford housing program.

The loans had been granted to Gruenfeld, but both she and Phills had signed for them as borrowers, court filings show. Phills was told by GSB administration that because Gruenfeld had left the house, and the exceptions had been granted to her, he would have to pay them back.

Current value of the 3,000-square-foot, four-bedroom, three-bathroom home, on a half-acre, is estimated by real estate website Zillow to be $3.9 million.

INCOMES REVEALED IN COURT FILINGS

Filings in the divorce case show Phills and Gruenfeld, in the three years before their separation, making a combined annual income between $511,000 and $593,000. In May 2012, Phills began working for Apple University, the tech giant’s internal training facility; his income climbed to $769,000 that year, grew to $1.2 million in 2013, and hit $1.7 million last year. Gruenfeld’s income, $487,000 in 2012, dropped to $462,000 in 2013, then jumped to $504,000 last year. This year, according to court records, she expects a $1.1 million one-time payment from a book deal. The book, Acting With Power, is to be published by Crown.

An email exchange from GSB Dean Garth Saloner to Stanford Provost John Etchemendy

Lawyers for Saloner and Stanford maintain that in an October 31, 2012 email to Etchemendy in which Saloner tells Etchemendy about his relationship with Gruenfeld, Saloner recuses himself from any decisions about Phills and Gruenfeld. The email appears to show the opposite: “I have seen Deb a few times socially,” Saloner writes. “I am not sure where the line is for reporting such matters and suspect I am pretty far from it . . . (Phills) has been on partial leave . . . and we had set this quarter as the time to figure out our relationship going forward . . . The negotiations over this will be handled by my SADs (senior associate deans) as they usually are. It is possible that I will be asked to weigh in at some point, and at a minimum will certainly be asked to ratify their recommendations. With apologies for burdening you with this I propose to ask you to approve our thinking on whatever we decide (and perhaps to weigh in more substantively, depending on what we recommend).”