LOUISVILLE, Ky. (WDRB) -- A month before he resigned as president of the University of Louisville Foundation last year, James Ramsey filled out a one-page form, and the foundation cut him a check for $3,546,056.
The payment represented a decade or more of accumulated “deferred compensation” that the foundation held on Ramsey’s behalf, plus interest earnings as if the foundation had invested Ramsey’s money in the same stocks, bonds and other securities that make up U of L’s $715 million endowment.
Along with Ramsey, four other U of L administrators cashed out deferred compensation plans in 2016, obligating the foundation to come up with $8.7 million to pay them, according to foundation records.
Ramsey, who led the nonprofit foundation as well as the university for 14 years, used deferred pay as a way to retain certain “key” administrators, but the awards received little scrutiny from the university’s board of trustees and the foundation’s board of directors.
Now under the new leadership, the nonprofit foundation has released records showing it has accrued or paid $20.2 million in deferred compensation, according to WDRB’s analysis*. The total is likely understated since the foundation records include investment earnings only through Sept. 30, 2016.
The total includes special “tax gross-up” payments the foundation made to satisfy the administrators’ federal, state and local income taxes on the awards. On average, the tax payments increased the compensation by 75 percent, according to WDRB’s analysis.
The foundation promised deferred pay to 12 employees in all, nine of whom have stayed long enough to earn at least some of the money. (U of L Athletics Director Tom Jurich has accrued nearly $1.7 million in deferred pay through the foundation, but the foundation said the athletics association funds that benefit).
|Participant||Title||Total||Deferred Pay||Tax Gross-Ups|
|James Ramsey||Fmr president||$ 7,644,223||$ 4,603,093||$ 3,041,130|
|Donald Miller||Director, JGB Cancer Center||$ 3,815,932||$ 2,190,044||$ 1,625,888|
|Shirley Willihnganz||Fmr provost||$ 3,966,554||$ 2,414,182||$ 1,552,372|
|Kathleen Smith||Fmr chief of staff||$ 2,583,804||$ 1,481,610||$ 1,102,194|
|R. Kevin Miller||Assoc. athletics director||$ 875,914||$ 555,234||$ 320,680|
|Michael Curtin||Fmr CFO||$ 470,071||$ 265,804||$ 204,267|
|Rebecca Simpson||Fmr AVP, communication||$ 338,803||$ 181,073||$ 157,730|
|Bill Pierce||EVP, research||$ 328,736||$ 188,742||$ 139,994|
|Susan Howarth||AVP, finance||$ 193,852||$ 146,377||$ 47,475|
|TOTAL||$ 20,217,889||$ 12,026,159||$ 8,191,730|
The foundation’s finances have been under intense scrutiny since early 2015, when federally required tax forms showed that Ramsey and other administrators received multi-million-dollar compensation from the organization in 2012. The deferred pay – including the tax benefits – made up a significant portion the compensation the foundation was required to report.
After two major donors raised concerns last year, the foundation is undergoing an extensive “forensic audit” looking at financial management, contracts, spending and other matters.
Greg Leichty, a U of L communications professor, said the fact that the foundation has spent over $20 million on extra administrator pay shows there was a lack of “proper oversight on the use of foundation funds.”
“I don’t see the foundation being a stash of private money administrators can do whatever they want with,” he said. “It was money that was given for the benefit of the students.”
Steve Pence, Ramsey’s attorney, said Wednesday he would relay a request for comment to Ramsey, who is in Florida.
In the past, Ramsey has claimed broad authority from the foundation and university boards to award the special pay to administrators as he sees fit.
As WDRB reported in 2015, the extent of the trustees’ approval was a 2006 meeting during which its compensation committee authorized Ramsey to use foundation money in giving “appropriate one-time bonuses” to members of his “leadership team,” according to minutes of the meeting.
Other than Ramsey’s, none of the awards were individually scrutinized by either board, and neither board set any sort of cap on the amount of foundation money that could be obligated for deferred pay.
“If that had been out in the open, in the public, it would have generated an awful lot of discussion and it would have never gone through,” Leichty said.
*This story was edited on Feb. 17, 2017 to reflect updated information from the foundation about its deferred compensation program. Records first given to WDRB understated James Ramsey's deferred compensation by $1 million. The table above also reflects additional information about the interest earnings for R. Kevin Miller and Rebecca Simpson's compensation, and those figures have been increased by $2,946 and $1,939, respectively.
Copyright 2017 WDRB News. All rights reserved.