Despite University of Kentucky President Lee T. Todd Jr.'s decision to turn down a $168,000 bonus, the UK board of trustees voted symbolically to approve it Tuesday, while several trustees called for an overhaul of the president's compensation package.
A half dozen trustees spoke up at the end of the board's meeting to praise Todd's performance and question whether the UK president is properly compensated. Todd makes $304,000 annually plus $50,000 for his role as chairman of the UK Athletics Association and UK Research Foundation.
"He is CEO of a $2.4 billion entity," said trustee James W. Stuckert, the former CEO and chairman of Hilliard Lyons, LLC. "I think anything under $1 million is paltry, personally."
The board then voted — with just one 'no' vote — to offer Todd his bonus anyway.
Todd said he was flattered but still won't accept it, which means the $168,000 will go back into the university's general fund.
Public universities in Kentucky are somewhat limited in what they can pay their top official because the state's 1997 higher education reform law says the Kentucky Council on Postsecondary Education president should receive a higher base salary than any state university president. If UK bumped up Todd's base salary, a corresponding raise would be required for the CPE president.
Despite that requirement, Stuckert and other board members suggested that it is time to consider paying UK's president a salary competitive with presidents of other SEC schools or benchmark universities.
Mira Ball, chairman of the UK Board of Trustees, said the board's executive committee could begin discussing possible ways to restructure the president's salary as early as its Oct. 27 meeting.
She said she's hearing an increasing drum beat from current and former trustees who think its regrettable that Todd's bonus represents roughly a third of his compensation package.
"I've had people who have gone off the board say it's too bad so much of that money is in a 'bonus,'" Ball said.
In addition, the word "bonus" has taken on a negative light, with public outrage over bonuses being given to executives at finance companies, such as AIG, that received government bailouts in the last year, Ball said.
The bonus was built into Todd's original compensation package to effectively enable him to make more than the CPE president, said board member Billy Joe Miles, who was chairman of the board when it hired Todd in 2001. The bonus is tied to a performance evaluation by the trustees.
Todd scored nearly 96 percent on that evaluation this year, qualifying him for $168,000 out of a possible $175,000 bonus.
Todd told the board that he doesn't make decisions based on how they might affect his bonus. He also lamented public criticism he received last year for accepting all but $50,000 of his bonus during a tough budget year.
"It doesn't drive me," he said of the bonus. "I will tell you it pretty much wipes you out when you get a 96 percent rating and then you get beat up in the press and (get) e-mails. That's what keeps you awake at night."
Todd, who received a standing ovation from the trustees and some attendees at the trustees meeting, said he wouldn't accept the additional pay during a time when faculty and staff members have had to forego salary increases for the second year in a row.
Faculty representatives on the board, Everett McCorvey and Ernest J. Yanarella, praised Todd for his act of solidarity with the faculty and staff.
But when the board voted to offer the bonus to Todd anyway, Yanarella was the lone 'no' vote. He told the board that while he agrees that Todd has performed well and has helped UK make strides toward its Top 20 goals, he felt obligated to speak for disgruntled faculty and staff who want to see Todd make a similar sacrifice.
"I think that is the right thing to do in this situation," he said of Todd's decision. "It will signal to faculty that indeed we are in the same boat."