University of Louisville trustees chairman: no more 'double dipping' for administrators with foundation paychecks
University of Louisville administrators will no longer receive extra paychecks from the university’s nonprofit foundation, according to the new chairman of U of L’s board of trustees. In an interview, trustees Chairman J. David Grissom repudiated a program under which the foundation doled out over $20 million in “deferred compensation."
LOUISVILLE, Ky. (WDRB) -- University of Louisville administrators will no longer receive extra paychecks from the university’s nonprofit foundation, according to the new chairman of U of L’s board of trustees.
In an interview, trustees Chairman J. David Grissom repudiated a program under which the foundation doled out over $20 million in “deferred compensation” to former U of L President James Ramsey and about a dozen other administrators over the last decade.
And, as WDRB previously reported, the foundation also paid some top administrators through a subsidiary it created called University Holdings Inc.
“There will not be any more of this dipping into both places – an employee getting a paycheck from both the foundation and from the university, but the left hand not knowing what right hand is doing. That day is over,” Grissom told reporters following a meeting of the board.
Grissom added that the foundation’s “deferred compensation” program is farcical because, in many cases, the extra pay is awarded annually even though it’s supposed to be an incentive for administrators to remain on the job over a multi-year period.
“There is a meaning to the word ‘deferred.’ It means you don’t get it on the first day of the following year,” Grissom said.
A compensation consultant hired by the university reached the same conclusion in 2015, recommending that the incentive pay be deferred for at least three years instead of annually. But neither the foundation nor trustee boards acted on the recommendation.
Grissom’s comments – echoed by U of L interim President Greg Postel – are the latest sign that the university is intent on removing the reputational cloud hanging over the foundation, which manages U of L’s $785 million endowment.
During Thursday’s meeting, Grissom said he has approved doubling the university’s $897,500 contract with Alvarez & Marsal Disputes and Investigations, the Chicago firm that is preparing a “forensic audit” of the foundation’s finances.
Grissom said the firm asked to increase its scope because the foundation, which has dozens of limited liability companies and affiliated entities, is more complex than it realized when bidding on the work last fall.
Earlier this week, the foundation's longtime attorney said separate companies were created to handle the deferred compensation for "obfuscation" purposes.
The audit will be finished by May 15, Grissom said.
Grissom acknowledged that the increase comes at a time when the university is slashing expenses, including not filling about 1,000 open jobs. But he said there was “no choice” but to thoroughly complete the audit.
“If we stayed with the original number, it would take us to the 10-yard line. It doesn’t take us across the goal line in terms of everything that took place,” he said.
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