Despite KCTCS Declines and Cuts, Former President Got Huge Payout
As the Kentucky Community & Technical College System eliminates 506 jobs, it disclosed that it paid $815,741 last year to former president Michael McCall.
McCall, one of the highest-paid community college administrators in the country, retired in January 2015, ending a 16-year run as the only president that KCTCS ever had. The KCTCS Board of Regents gave him a one-year contract at his final annual salary to serve as president emeritus. Meanwhile, McCall moved to Isle of Palms, South Carolina, a beachfront town near Charleston.
But the $300,965 that McCall received for consulting last year was less than half his post-retirement compensation. McCall was also paid $352,066 for unused vacation days, $124,249 in deferred compensation and $38,460 in his final two working paychecks, according to a pay breakdown obtained by the Kentucky Center for Investigative Reporting.
“It’s one of the most insulting things I can imagine,” State Sen. Chris McDaniel, a Taylor Mill Republican, said Thursday. “You have a system that is complaining about budgetary impacts, yet pays folks to really do no work. $815,000 -- I think it’s insulting to the taxpayers, I think it’s insulting to the students and I think it’s insulting to the professors."
In March, McDaniel and other Republican state senators called for an investigation and hearings to examine state university and college executive pay packages. McDaniel was incensed following a KyCIR report revealing a $348,000 “incentive” payment to former Gateway Community & Technical College President Ed Hughes from the college’s foundation. At the time, Kentucky colleges were protesting Gov. Matt Bevin’s proposed 4.5 percent cut in higher education spending.
“We see these golden parachutes for these university presidents all over the place,” McDaniel said. “We just saw it with Ed Hughes and his arrangement with the Gateway Foundation and what he’s getting paid. It’s completely egregious.”
KCTCS says McCall cashed in 2,091 hours of unused vacation, which comes to 261 days. His 2013 employment contract called for KCTCS to pay him for an unlimited number of unused vacation days. KCTCS policy allows staff employees to accumulate a maximum of 40 days. Professors need written authorization to carry over vacation from year to year.
For his unused leave, McCall was paid at a rate of $168.37 an hour, the hourly rate he earned in his last year as president.
KCTCS Board of Regents Chairwoman Marcia Roth said the provision allowing McCall to cash out an unlimited number of vacation days was in his contract.
“The timing of this final payment is extremely difficult due to the financial situation we now find ourselves in,” Roth said in an e-mail. “In order to avoid this situation from recurring, when Dr. Jay Box was hired as president, the board took steps to bring the KCTCS president’s payout of unused vacation time in line with policy that governs all other current KCTCS employees.”
P.G. Peeples, a member of the board and its former chairman, told the Lexington Herald-Leader Thursday afternoon that McCall had “abused a well-intentioned initiative put in place by the board. That is disappointing.”
“When we approved that practice, it was our intention to pay for a reasonable amount of days,” Peeples said. “It was not our intention to put him in a position to stockpile days and create another income stream.”
McCall’s deferred compensation was granted in 2005. The plan states that McCall “shall be” its sole participant. According to a summary of the plan, deferred compensation is a monetary carrot to keep executives from leaving. It says they are also known as “golden handcuffs.”
Detailed summaries of McCall’s consulting work for KCTCS through Aug. 15, 2015, show that he was on the phone every other week with his successor, Jay Box, for “confidential support/advice” and exchanged e-mails “as needed.” Beyond that, he did work for KCTCS’ McCall Leadership Academy, helped with executive searches and coaching, and served as an adviser to colleges’ Buildsmart programs.
The state’s 16-school system finished each of McCall’s last four years with a financial deficit. Upon learning last year of his emeritus package, KCTCS faculty and staff asked McCall to return the money. The request went unheeded.
McCall could not be reached for comment Thursday.
The Lexington Herald-Leader reported Wednesday that KCTCS cut 506 jobs in response to a $26 million budget shortfall caused by state spending cuts and declining enrollment. It said the cuts included 191 faculty jobs and 315 staff jobs. Because many of the positions were vacant or were being vacated by retirements, only 45 faculty and 125 staff employees were laid off.
KCTCS spokeswoman Terri Giltner said the job eliminations represented 11.8 percent, the layoffs 3.9 percent of its full-time work force.
Reporter James McNair can be reached at email@example.com and (502) 814.6543.
This story has been updated to include comments from P.G. Peeples.
This story was reported by WFPL’s Kentucky Center for Investigative Reporting.