When he steps down from his post Thursday, University of Kentucky President Lee T. Todd Jr. will join UK's engineering faculty as a tenured professor with a salary of about $162,000 a year.
But first, Todd will take a yearlong unpaid leave of absence. Instead of a salary, he will receive the retention bonus guaranteed in his contract for staying 10 years. It's worth $511,000, his base salary during his last year of work.
The Board of Trustees increased Todd's salary last year, when they concurred that his base salary was too low and too dependent on various performance bonuses.
The board's executive committee approved Todd's new contract as a professor late Tuesday.
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"This agreement is an appropriate reflection of President Todd's outstanding years of service as president and a testament to the fact that we want to continue his invaluable contributions to our faculty and economic development efforts in the years to come," board chairman Britt Brockman said.
Other provisions of the new contract require that Todd:
■ Be paid at the level of the highest-paid professors in the engineering department, and his duties shall be negotiated with the engineering dean. He will receive the same raises as the rest of UK's faculty.
■ Have an office in the Advanced Science and Technology Commercialization Center building, where he will have the services of a full-time secretary for four years. He'll keep the cellphone, laptop computer and other equipment he now uses as president.
■ Will get an annual travel budget of $30,000 for four years and $5,000 for memberships in professional organizations.
■ Will receive four season tickets to UK football and basketball games.
Former faculty trustee Ernie Yanarella said many university boards give "golden parachutes" to departing presidents.
"I've learned to tolerate this," he said. "If one could tolerate the package for Charles Wethington, one should be willing to tolerate one for someone who was much more competent."
Wethington, Todd's predecessor, had a contract that paid him $265,000 a year to be a fund-raiser for UK. He then moved to UK's Lexington Community College — now Bluegrass Community and Technical College — as an associate professor with tenure, being paid $212,484.
In 2003, Wethington said he would be writing and doing research. Wethington is still a faculty member at BCTCS, officials said, and also serves in an advisory role to BCTCS President Augusta Julian. He works in an office in UK's William T. Young Library.
Yanarella said he thinks incoming President Eli Capilouto — who starts Friday — should study the issue of compensation for presidents and the rest of the campus.
"But I've given up trying to convince the board members that they should offer reasonable packages rather than exorbitant ones," he said.
Todd's base salary went up about 44 percent in his last year in the job.
Spokesman Jay Blanton said the board studied compensation at Top 20 institutions in 2010.
Since 2005, different performance bonuses had comprised as much as $200,000 of Todd's pay package. But during difficult economic times, Todd often returned his bonus or donated it to the university. The result was a lower salary than presidents at several Kentucky institutions.
"The board determined that such a compensation structure was not appropriate, which led to the decision to discontinue bonuses," Blanton said.
Instead, the board decided to restructure the presidential pay package, setting Todd's salary at 82.5 percent of that received by presidents at Top 20 institutions. Faculty members also get 82.5 percent of what peers at Top 20 schools are paid, Blanton said.