When University of Missouri Chancellor Brady Deaton retires this fall he’ll step away with his name on a new institute and a $200,000-a-year salary.
That kind of exit deal may not be nearly as hefty as the multimillion-dollar parachutes some corporate executives land, but only a decade ago big-money exits were virtually unheard of for heads of public colleges.
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But substantial exit agreements have become more popular as more big business people landed on university governing boards and “brought their business ideas with them,” said Washington lawyer Ray Cotton, nationally known for negotiating college president compensations.
Now large exit packages are “common practice,” said Peter Eckel, vice president for programs and research at the Association of Governing Boards of Universities and Colleges.
And, he said, the dollars attached to those deals keep getting bigger. More often, the exit deal comes with the hire and university governing boards feel pressured to offer a lucrative deal or lose good candidates.
In Georgia, an outgoing president will receive $2 million over five years.
Such big bucks and other perks don’t always sit well with faculty, especially when some haven’t seen a pay raise in years.
“At a time when faculty, for the last eight years, have not been able to keep up with the cost of living ... I find it unconscionable,” said Gary Ebersole, a history professor and the Faculty Senate chairman at the University of Missouri-Kansas City. “They are bringing in the worst of the business model, rewarding top executives. It is demoralizing for people in the labs and in the classrooms doing the real work of universities.”
Unlike a lot of other retiring presidents, Cotton said, Deaton will work for the university in retirement. Part time, he’ll direct the Brady and Anne Deaton Institute for University Leadership in International Development on the Columbia campus. For that, he will be paid $200,000.
“In this case,” said Cotton, who was not involved in the MU negotiations, “it looks like it’s the university, not Deaton, who made out best.”
Deaton is just the lastest example among the Kansas City area’s big public university leaders who’ve retired over the last five years with a lucrative, post-presidential package.
Before Kansas State University President Jon Wefald retired in 2009, he was being paid $315,962 a year, which included a base salary of $255,298 in state funds and $60,664 from private sources. When he stepped down after 23 years at the helm, the Kansas Board of Regents agreed he would continue to receive his annual base salary of $255,298 for the following two years.
Wefald left the university just months before release of a scathing audit report about hundreds of thousands of dollars in undocumented payments to athletic leaders. He took a 12-month sabbatical the first year and “then returned to K-State in the part-time professor role, with the primary task of writing his book, tentatively titled ‘The Turnaround Years at K-State: The Years of President Jon Wefald from 1986 to 2009’,” said Beth Bohn, university spokeswoman. He expects to finish within the next year or so.
“One thing I did not expect is how time-consuming this would be,” Wefald said about his book writing. “They are not just giving money away. I’m working seven days a week. This is important. A history of K-State.”
Since 2011, K-State has continued to pay Wefald as part of a five-year plan, but at a lower rate of $157,982 a year.
That annual amount is a little more than a third the salary paid to current K-State President Kirk Schulz, who just this month got a $60,000 raise to bring his annual salary to $460,000, with $291,804 coming from state funds and $168,246, from private funds.
The Kansas Board of Regents also gave KU Chancellor Bernadette Gray-Little a $60,000 raise, bringing her salary up to $492,650. About $272,000 comes from the state and $221,000 from private funds.
Robert Hemenway retired from KU the same year Wefald stepped down at K-State. He, too, took a year’s sabbatical and in 2010 returned to the Lawrence campus for a year to write a book. He also taught one English class for two semesters. He was paid $340,352 for each of those two years, the same annual salary he’d gotten his final year as chancellor. But Hemenway is now fully retired and hasn’t received a salary from the university since the summer of 2011.
The packages given to Wefald and Hemenway were a way to “recognize them and thank them for service to their respective campuses, for their longevity,” said Christine Downey-Schmidt, a member of the regents board.
Cotton, nicknamed “the money man” by chancellors and presidents who’ve retained him to negotiate compensation and exit contracts, has sat on both sides of the table, sometimes representing the president doing the leaving, and other times the institution.
He said that in corporate America, a company with a multibillion dollar budget, like the big public colleges have, would never have a president making as little as $400,000, $600,000 a year.
“It would be in the millions,” Cotton said.
And when they left, the parachute would be comparable. Although post-president packages have gotten pretty sizable in recent years, Cotton said, “there is a lot more headroom to go.”
At the end of this month University of Georgia President Michael Adams will retire with $2 million that he will get over five years. Adams, who has been president 16 years, will be paid $660,000 a year for two years to teach and write and $258,000 for each of three years. He’ll also receive a one-time $600,000 payment in deferred compensation.
Until his retirement is official on Nov. 15, Deaton will receive his current pay: a base salary of $333,076, plus a one-time $42,000 payment for deferred compensation (accessible upon retirement). He also gets $29,800 in incentive pay which is based on goals set each year and a $50,000 retention incentive.
Because Deaton’s new job will be part time, he’s eligible to draw his retirement pay. University officials said they have haven’t calculated how much he’ll get in retirement benefits.
“But he won’t be getting any extra stuff,” said Christian Basi, university spokesman. No car, no housing allowance.
The university sees Deaton’s continued connection as an asset. His work to fight global hunger through the school’s new institution is expected to attract millions in domestic and international private funding to MU, said UM System President Tim Wolfe.
“I am a member of faculty first and foremost,” said Deaton, who won’t teach but will do research. “There are some faculty members paid a lot more than that, some less.”