The University of Kentucky Board of Trustees on Tuesday approved a plan to give retiring president Lee T. Todd Jr. a $157,046 annual raise and make it retroactive to the 2009-10 academic year.
The proposal, which also included a potential performance bonus of up to $50,000 for Todd, passed with two dissenting votes — faculty trustee Joe Peek and staff trustee Sheila Brothers.
Todd later said he would turn down the $50,000 bonus but said the restructuring of his university salary was a fair way to stop politicizing the process of paying the UK president.
Todd said he is turning down the bonus because of "a perception that in a time when no one else is getting money the president is getting more."
Todd's salary will now be $511,046. His base pay is increasing nearly 52 percent, to $461,046, plus he gets $50,000 for chairing the UK research foundation and athletics associations boards.
The new amount was calculated based on the idea that Todd's salary should equal 82.5 percent of the average of presidential salaries at the Top 20 public research universities, since UK faculty make 82.5 percent of faculty salaries at the same institutions.
Trustee Frank Shoop insisted that Todd's pay increase had been wrongly characterized as a raise. "That is not a salary increase, that is a reclassification," Shoop said.
Todd also will receive his base salary as a retention bonus on June 30, after which he says he plans to take what he calls a "sabbatical year."
The raise given to Todd on Tuesday means that an additional 15 percent of his new base salary — or more than $69,000 — will be added to Todd's retirement account with the university. The $50,000 he gets for chairing the two committees is not a part of Todd's retirement benefits calculation.
Whether Todd — or, indeed, anyone at UK — is adequately compensated sparked some pitched debate among the trustees.
Brothers, the trustee representing UK staff, said that many of her fellow workers also were serving UK well and nonetheless living paycheck to paycheck: "I don't think this is the right time to do it," she said of Todd's raise.
She cited Todd's numerous services to UK but added that "he would not have accomplished one of them without the faculty and staff behind him."
Trustee Pamela May said that such disparities exist in many workplaces: "We do not pay the cleaning lady what we pay the heart surgeon."
Vice chair James Stuckert said the trustees simply have not paid Todd enough.
"I'm just appalled we're talking about this and not paying the gentleman what he's due," Stuckert said.
Trustee Carol Martin Gatton said those who targeted Todd for taking an increased salary were misdirecting their ire.
"Don't get mad at this man," Gatton said. "Get mad at the state of Kentucky."
A budget adopted by UK trustees in June included a 1.4 percent reduction in state support during the 2010-11 fiscal year and increased costs for utilities, employee benefits and student financial aid. Overall, UK is coping with a $7 million shortfall for fiscal 2010-11.
Nonetheless, new chair E. Britt Brockman said, Todd's salary increase is a long-delayed adjustment meant to lessen the UK president's dependence on a bonus system as a substantial part of a president's compensation.
Brockman said the bonus system — under which Todd was paid a base salary and offered a bonus that he could accept or turn down — had been the wrong payment choice for the duration of Todd's time in office, and the trustees needed to change it before the next president took office.
Under his prior compensation package, Todd would have been eligible for a performance bonus of up to $200,000 this year. Todd turned down a $100,000 bonus in 2002 and a $168,000 bonus in 2009.
The UK board's executive committee passed a proposal to increase Todd's base salary last week amid a discussion of whether increasing his pay contradicts a state law that grants the highest state academic salary to Robert King, head of the Council on Postsecondary Education. King makes $400,000 a year.
The law requires King to be paid more than the base salary of any president of a Kentucky public university, but it does not set limits for the base salaries that universities may pay their presidents.
The University of Louisville pays its president, James Ramsey, a base salary of $456,132, UK trustees were told, while Northern Kentucky University pays president James Votruba $425,239.