UPDATE: University of Louisville Foundation committee meeting canceled

LOUISVILLE, Ky. (WDRB) – The University of Louisville Foundation overpaid former university president James Ramsey and four of his top aides by a total of $3.9 million over the 2010-2016 period, according to an independent study commissioned by the foundation last year.

The foundation made the study public following a meeting Tuesday in which the nonprofit organization’s board voted to amend Ramsey-era disclosures to the IRS that claimed the compensation was reasonable, and to pursue Ramsey and the other aides to recover the “excess benefits.”

The foundation and university earlier this month sued Ramsey, his former chief of staff Kathleen Smith and former chief financial officers Jason Tomlinson and Michael Curtin for allegedly depleting the university’s endowment with excessive spending, including compensation for themselves.

The analysis released Tuesday claims Ramsey, Smith, Tomlinson and Curtin were overpaid by the foundation. The study also claims the foundation excessively compensated Shirley Willihnganz, U of L’s provost under Ramsey. Willihnganz was not named as a defendant nor mentioned in the lawsuit, however.

The $170,000 study by Los Angeles-based Korn Ferry Hay Group comes nearly after a year the university released a $2 million forensic investigation that impugned the foundation’s finances under Ramsey.

Earl Reed, who chairs the foundation board, said Tuesday that the study was needed for the foundation – a charitable organization that enjoys tax benefits for its donors – to make accurate representations on annual forms required by the IRS.

Reed said the foundation has alerted the IRS that it will be amending previous years’ disclosures to reflect the excess compensation.

Korn Ferry said in the study that the “excess” benefit – or the amount the five former U of L executives were overpaid relative to peers at similar universities – would be $16 million if calculated simply by the amounts actually paid out during the seven-year period.

But Korn Ferry arrived at the much lower $3.9 million figure by spreading the administrators’ large “deferred compensation” packages over a 15-year period, which the study claims is “industry standard.”

Don Cox, an attorney representing Tomlinson and Curtin, called the study "a joke" and part of a "pure vendetta" by the foundation's current board of directors against a handful of Ramsey-era officials.

Cox noted that the study assumed any pay above the market median was excessive.

"If you are going get good people for big institutions, you can't pay at the median -- you’ve got to pay above," he said.

Ann Oldfather, an attorney who represents Smith, released a statement that said, in part: "Someone should tell the decision makers at the Trustees and the Foundation to get ready for huge legal fees they are going to get to pay the lawyers defending their former employees to whom they voluntarily paid what this study shows to be B-grade salaries for A++ level work."

Oldfather was referring to demands by Ramsey, Smith and the others sued that the foundation pay their legal fees in the very lawsuit brought by the organization against them.

Ramsey's attorney did not immediately provide a comment, and Willihnganz could not immediately be reached.

Here is the 92-page study:

Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2018 WDRB News. All rights reserved.