U execs are paid handsomely on their way out

Packages include paid leave and extra retirement pay. Consultants say they're necessary to keep talent.

hide

Retired UMD Chancellor Kathryn Martin

Photo: David Brewster, Star Tribune

CameraStar Tribune photo galleries

Cameraview larger

Since retiring 18 months ago as chancellor at the University of Minnesota Duluth, Kathryn Martin has collected more money from the U than she did in her last two years on the job.

One of nearly a dozen university executives to step down in the past two years, Martin was granted a two-month sabbatical, a 15-month "administrative transitional leave,'' a final deposit to her retirement fund, and a severance check. Total: $535,700.

Hers was the biggest in a series of compensation packages signed by former university President Robert Bruininks worth more than $2.8 million. The deals routinely granted top administrators lengthy paid leaves, then allowed them to return to faculty positions or depart the U's payroll.

A Star Tribune review of university documents shows that seven of 10 high-ranking officials in the Bruininks administration, including the former president himself, received at least a year off with pay at their executive salaries, as well as retirement and health insurance contributions. The deals often were vague about what the administrators would do on leave. Bruininks also repeatedly waived a university policy that executives repay their stipends in the event they left the U while on leave.

Many of the agreements rival in size the recent employment extension given to retiring U Athletic Director Joel Maturi, which caused several legislators to ask if the university is spending money wisely at a time when many Minnesota students and families are struggling to pay college costs.

Specialists in academic compensation say granting paid leave to administrators before they return to faculty positions is common -- and necessary for recruiting talent. When used appropriately, they said, such leaves give top administrators time to retool for academic jobs they may have left decades earlier in order to work in central leadership.

"If you're trying to recruit the best and brightest, those people are going to have more than one offer," said Raymond D. Cotton, a Washington, D.C., attorney who specializes in university executive contracts. Sabbaticals and leaves are "something they will consider. No doubt about it."

But critics such as Dean Zerbe say the packages are a reckless use of taxpayer subsidies at a time when working families are "grinding'' under heavy tuition burdens.

"These are nothing but sweetheart deals and golden handshakes,'' said Zerbe, a lawyer who provided federal oversight of charities, including colleges and universities, for the Senate Finance Committee under Iowa's Sen. Chuck Grassley. "The Legislature and the governor should be demanding that they look at this across the board.''

Linda Cohen, chairwoman of the university's Board of Regents, said the governing board oversees the initial employment agreements for top executives, but "from then on, it becomes a management issue."

But, she said, the board has been discussing the creation of a committee focused on compensation to provide greater oversight. She called the practice of granting transitional leaves common and appropriate. The question is whether during that leave, administrators are paid at the salary of the administration post they are leaving or the faculty one they are taking, she said.

'Negotiable'

The university's current policy says the salary while on leave is negotiable but "salary and benefits are typically paid at the level of the assumed, or resumed, faculty or professional position rather than at the administrative salary level.''

The same issue arose about two years ago in North Carolina, where the state university system paid about $8 million in executive salaries to 117 administrators who either returned to the faculty or left the university.

North Carolina chancellors ordered reforms that scaled back leaves from one year to six months and made them payable at faculty salaries, not executive rates.

Bruininks and Carol Carrier, his former human resources director, said underwriting leaves for departing administrators is the norm in the Big Ten and elsewhere.

It's inaccurate, they said, to characterize the leaves as a year away from work.

"People stay at universities for a long time these days, and their careers are often phases of things,'' said Carrier, 62, who got a 13-month, $229,000 leave to catch up on a faculty career she left more than 20 years ago. After three months of that leave, she took a job as special assistant to senior vice president Robert Jones. Her deal allows her to take the rest of that leave at a later date.

"You get pretty far behind on things and you need the time to get geared back up,'' Carrier said.

Cotton said one-year leaves are common, and recipients are often "going to be refreshing and sharpening their skills in their field."

Regaining skills

Charles Muscoplat, 63, president until next June 17 of a university corporation that manages the Dakota County real estate known as UMore Park, said he will use his one-year leave to chair a committee that helps commercialize faculty pharmaceutical inventions and work on clinical trials of a drug to treat patients with cystic fibrosis, among other projects. He will earn a salary of $251,500 while on leave, then return to faculty as a teacher and researcher.

"I do not anticipate taking a 'leave' meaning a leave from duties," he said by e-mail. "I understand this to mean a leave allowing me to return to my skill base in pharmaceutical, clinical trial, tech transfer and teaching."

At the same time, many of the "transition'' agreements worked out by Bruininks are flavored with language that goes beyond the purpose of academic readiness.

"The salary earned during your leave will not need to be repaid should you not return to your faculty position in the Law School,'' Bruininks wrote to Provost E. Thomas Sullivan, whose one-year leave will be cut short when he resigns from the U to become president of the University of Vermont on July 15. A U spokesman said Friday that Sullivan will resign from the U "no later than July 14.''

Sullivan's transition package at the U, which allowed for a payment of $340,750 over 12 months, also contains a special $75,000 retirement payment, documents show. Bruininks said he granted the benefit at his own discretion to reward the provost for staying on the job for about six months longer than originally planned. Under Sullivan's provost contract, the retirement payment should have been about half that size, according to documents.

"I rounded up,'' Bruininks said.

In Carrier's case, Bruininks gave her 13 months of paid leave and a 3.5 percent pay increase. This lifted her annual salary to $212,000 in time for the leave. Should she decide not to return to the faculty after 13 months of transitional leave, the requirement to repay the university for the leave is waived. If she does return to the faculty, Bruininks authorized two months of full-time summer salary to support her research and funds for a half-time research assistant.

"You have been an extraordinary leader and colleague, and I am honored to have had you as a member of my administration,'' Bruininks wrote in her transition agreement.

History project

The documents vary in their discussion of work expectations.

For example, Bruininks gave Martin an expense account of $15,000 to entertain donors, work with alumni and spend on other university functions. Martin did not respond to calls and e-mails asking for comment.

"I'd envision that during your administrative leave, for example, you might assist with donor relations and help the new chancellor, upon request, with particular tasks,'' Bruininks wrote in her tentative agreement.

Frank Cerra, former dean of the medical school and senior vice president for Health Sciences, received his administrative salary of $481,500 for a year on leave that ended Dec. 31, 2011. He said he organized a large-scale grant application and worked on two other grants before returning to a faculty position. During a two-year phased retirement with reduced hours and pay, the 69-year-old Cerra will largely be working on a history of the U's Academic Health Center, the amalgam of health schools he led from 1996 to 2010.

Bruininks said the most generous agreement he signed with one of his outgoing executives was with Martin, a longtime chancellor who became well-known for leading a building boom on the Duluth campus. As part of her package, the U plans to name a building after her.

Martin received an extended "transitional'' leave even though she wasn't planning to return, Bruininks said. A straight retirement could have limited her to a severance payment of up to one year of her salary. But Bruininks wanted to compensate Martin for years of taking a $233,250 annual salary that had been repeatedly frozen and was lower than the standard pay for leaders of even smaller campuses.

Martin had the option of keeping her tenure and returning to the faculty, but Bruininks said he feared that with her strong personality, "she would have wanted to run it [the school] from the bleachers.''

"I'll just be honest about it,'' Bruininks said. "It was better for her and better for the campus and more cost-effective for the U.''

Jenna Ross • 612-673-7168 Tony Kennedy • 612-673-4213

  • related content

  • Graphic: Making top dollar on leave

    Sunday February 26, 2012

    A look at leave agreements for outgoing U executives. You can examine some original documentation used for this story by...

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

question of the day

Poll: Should the Twins replace Ron Gardenhire?

Weekly Question

ADVERTISEMENT

 
Close