Ramsey Leaves Top U of L Deputies With Extraordinary Perks
The University of Louisville’s next president will be saddled with more than just baggage from James Ramsey’s tenure.
The new president will inherit Ramsey’s top deputies, many of whom were given lucrative compensation packages and perks that experts say go far beyond the norm. Ramsey's own buyout is $690,000, but the cost of his pledges to top executives could be millions more from school coffers.
Ramsey has ensured U of L keeps -- or at least keeps paying -- two of his vice presidents after he’s gone, via special contract clauses tied to his exit. Meanwhile, several other administrators have contracts with extraordinary perks that would be difficult, if not impossible, for the next president to roll back.
“It’s totally inappropriate for one university president to try to dictate the way his or her successor runs the shop,” said Richard Vedder, director of the Center for College Affordability and Productivity in Washington, D.C.
WFPL’s Kentucky Center for Investigative Reporting examined university contracts for eight top administrators. Among the perks afforded to the executives:
- Two administrators have contracts that promise them a full-time salary through 2020 if they are let go within two years of Ramsey’s departure this week.
- Five have $1,000-a-month car allowances; the athletic director gets two automobiles.
- Seven can bring their spouses -- and sometimes children -- to travel on the university’s dime for official business or athletic tournaments.
- Three were offered a full month’s base pay for relocation costs -- which for one administrator could be up to $80,000 in reimbursements.
- Seven are promised eligibility for bonuses of up to 20 percent of their base pay.
- U of L has pledged a full ride for two administrators’ children through reimbursement for tuition, room and board and some additional costs for children attending the school. The standard offer to other staffers is tuition only.
These U of L contracts stand out among the deals and perks typically lavished on top public university leaders, several experts told KyCIR. The total compensation alone puts U of L administrators in the upper echelon of public school executive pay -- even when compared to university presidents.
Pay records show that the lowest-paid of Ramsey's contracted deputies, William Pierce, grossed $334,000 last year, though his total compensation is likely more. U of L officials refused to disclose the payout of all employer-paid benefits, such as car allowances, country club memberships or health insurance premiums.
Meanwhile, the median base pay for public college presidents last year was about $400,000, according to the Chronicle of Higher Education.
Judith Wilde, chief operating officer for the George Mason University Schar School of Policy and Government, reviewed the contracts at KyCIR’s request. She said that many of the perks offered to U of L’s senior administrators wouldn’t raise eyebrows individually. But taken as a whole, she’s never seen anything like it at a public university.
“It’s the entire package that makes it really look like these people are getting much, much more than anyone else among the Kentucky public (workforce),” Wilde said.
A school spokeswoman said Ramsey, who continues to serve as president of the University of Louisville Foundation, would not grant an interview Thursday. None of the top contracted administrators responded to calls or emails for comment.
These perks are a byproduct of the “CEO-ization” of U of L’s leadership, said James Finkelstein, professor emeritus at George Mason University and an expert in university compensation.
He called it unusual for more than one or two members of the leadership team outside the athletics department to be under contract. U of L has at least seven current employees under contract outside athletics.
“As presidential contracts become more sophisticated, we are beginning to see a trickle down,” he said. “In the past they simply would have had an employment letter that said, ‘As provost your salary is,’ and that would be it.”
Ramsey was under contract through 2020 but signed a settlement agreement with the U of L Board of Trustees Wednesday that voided his contract. To avoid potential litigation and move the university forward, trustees agreed to pay him a $690,000 settlement.
The university’s two newest senior administrators -- vice president for strategy and general counsel Leslie Chambers Strohm, and senior vice president for finance and administration Harlan Sands -- have contracts that outline termination for “good reason,” which is defined as being let go within two years of Ramsey’s departure. In that case, they’d be paid full salaries through the end of their contracts in 2020 in exchange for consulting.
Finkelstein said he’s never seen a contract payout that was so open-ended and didn’t cease once an administrator got a new job.
Sands’ contract also gave him unspecified "transition assistance" for his spouse to relocate her career to Louisville.
Neville Pinto, the former dean of engineering, was named interim provost last spring. His employment agreement, dated October 1 but retroactive to July, notes that if Pinto isn’t named permanent provost and decides not to return to his former dean role, he could work as a professor and keep his $334,000 provost base pay.
Vedder, an academic who examines college cost issues, also questioned why administrators without extensive travel responsibilities would need a car allowance, let alone other such generous offers.
“How often does a general counsel need a car strictly for business purposes?” Vedder said. “I hope the IRS is taxing them because it’s clearly compensation for these employees.”
While most presidential contracts include provisions to pay for spouse travel and sports tickets, they almost always specify that private dollars would cover those costs. The university contracts instead call for “departmentally budgeted funds” to be used on spouses -- who aren’t state employees -- to go to conferences and sports tournaments.
“That suggests their attendance is being paid for by the citizens of the commonwealth of Kentucky,” Finkelstein noted.
Ramsey’s signature adorns each of the agreements with his deputies. In some cases, the employment letter dictates a bonus structure controlled by Ramsey. The three compensation experts told KyCIR that the Ramsey-offered bonuses of 15 to 20 percent were unusually high.
Documents show Ramsey also instructed some administrators to bring their requests for spouse travel reimbursement directly to him.
“These contracts give the president of the university enormous discretion and latitude in negotiating the terms of employment for those people who directly report to him,” Finkelstein said. “That kind of ability to reward can buy loyalty.”
Vedder said it appears Ramsey tried to determine the next university president’s cabinet.
“The terms are so onerous that it becomes extremely costly to change the leadership at the top,” Vedder said.
(Read KyCIR's follow-up to this investigation: " Outrage From Faculty, Shrugs From Trustees After U of L Pay Revelations")
Under Ramsey, U of L filed for more patents, saw its endowment grow and joined the Atlantic Coast Conference. It also moved to invest in and develop real estate as a way to offset stagnant state funding.
But Ramsey’s tenure has been beset by scandal and controversy in recent years. He faced intense scrutiny for his hefty compensation and dual roles as U of L president and head of its billion-dollar foundation, which pays a portion of his salary, as well as bonuses and deferred compensation.
David Dunn, U of L’s executive vice president for health affairs, is on paid administrative leave while he’s under FBI investigation for possible misuse of federal funds. The NCAA is investigating the men’s basketball program over allegations a former employee paid for strippers and sex for players and recruits. And in 2014, a handful of university officials went to prison on charges of fraud and embezzlement that totaled more than $7 million in university funds.
Kate Howard can be reached at email@example.com and (502) 814.6546.
Correction: An earlier version of this story incorrectly stated the month Neville Pinto was named interim provost. He took the role last spring, though his employment agreement was signed in October and retroactive to July.
Disclosure: In October 2014, the University of Louisville, which for years has donated to Louisville Public Media, earmarked $10,000 to KyCIR as part of a larger LPM donation. Former trustee Stephen Campbell has donated to KyCIR.