Arkansas Blog: The Lu Hardin papers UPDATED

Courtesy of Stephens Media, I have on the jump the full text of the letter UCA President Lu Hardin wrote to his Board of Trustees seeking a $150,000 pay bump in the form of deferred compensation over six years. I also have the unsigned memo, bearing the name of UCA administrators, supporting the legality of the arrangement and the legality of keeping it secret.

Well.

Some points.

1) Hardin said he'd been advised by a University of Arkansas attorney that deferred comp for university officials does not require a public vote or disclosure of deferred comp. I doubt this because we'd recently gathered UA deferred comp figures. Indeed, the UA says in this Stephens Media story that they do not hold such matters to be secret.

2) I'd like to know more about the reference to a new privately funded home for Hardin (although he said he wasn't interested.) UPDATE: I'm told this was a matter studied by a committee that was contemplating a shuffle of UCA offices -- athletic department to Alumni Hall, alumni and foundation offices to the president's house and a new president's house built on vacant land nearby. Hardin said it wasn't a good time for such a move, Trustee Rush Harding recalled.

3) Hardin says his "total package" of $402,300 would be $50,000 -- actually $41,000 to $42,000 -- below the U of A pay. But this is only if you don't include his "catchup" $300,000 bonus, paid in May, an acceleration of $60,000 annual deferred comp payments. At least two of those years, at $60,000 per, should fairly be added to his overall compensation, making him pricier than the UA president and UAF chancellor. As a reader has noted in an earlier thread, for all its growth, UCA is not considered at the same level as the UA. (And its faculty is far below the UA in average pay.)

4) Contrary to what appears on the unsigned memo, I've been told Jack Gillean, the VP for administration, did not draft it.

Sorry Yogi. This one isn't over until it's over.

COMMENTARY: Brummett recaps and says it's about "greed and arrogance of power." Ouch.

UPDATE: What happens at the UCA press conference and Board meeting tomorrow. The process starts over. Apologies for mistakes, a commitment by the Board and Hardin to do things properly in the future and a plea for redemption from the UCA community. In the short run to intermediate run, a pay increase for Hardin isn't likely in the cards.

LETTER FROM LU HARDIN

March 25, 2008

Mr. Randy Sims
First State Bank
620 Chestnut
Conway, AR 72032

Dear Randy,

Thank you and the Board of Trustees for approaching me about determining a compensation package consistent with comparable universities.

Candidly, I have been surprised with the results of my research. Here are the compensation figures from comparable universities:

• Alan Sugg, University of Arkansas, $294,500 + $150,000 deferred = $444,500
• David Gearhart, University of Arkansas, $293,800 + $150,000 deferred = $443,500
• Robert Khayat, Old [sic] Miss (15,000 students), $423,100 + deferred compensation exists, but amount is not ascertainable.
• Robert Foglesong, Mississippi State (17,000 students), $423,100 + deferred compensation exists, but amount is not ascertainable.
• Lu Hardin, UCA, $252,300

I had a lengthy conversation with Alan Sugg who offered the U of A tax attorney for assistance. However, the $150,000 is paid quarterly into a fund each year in Alan’s name per his investing direction.

Per the Board’s question, I would respectfully request the following:

• No increase in salary. While I will be almost $50,000 below the U of A System and the U of A chancellor, we should not increase the salary at this time. Because of state funding issues, we are looking at a five percent tuition increase. Arkansas State University is planning a 6.3 percent increase and the U of A is planning a 6 percent increase.
• Mary and I are committed to remaining in the President’s House on the UCA campus for two reasons. One reason is perception. Even though the almost $1 million cost of a new home would be privately funded, we do not feel this is the time to move. Secondly, even though Mary and I genuinely appreciate Rush, Harold and Linda’s work, we have decided that we enjoy the home and the close proximity to campus. It is a lot of work at times, but we are committed and very happy to stay here. We also appreciate the great tradition associated with presiding in this beautiful home.
• I would respectfully request that $150,000 per year be placed in a deferred income fund identical too the U of A’s policy beginning in January 2008 and through the remaining contracted period. While the total package will be $50,000 below the U of A, this is still very generous and fair. According to the U of A attorney, this does not require a public vote because it is “deferred.”
• Finally, the vote of the Board to grant $300,000 at the end of five years’ employment has been taken and is of record. We are now concluding three full years. This money has been fully sequestered by Paul McLendon, and I would request that this be paid as a partial “catch up” as the third year is ending. Again, this vote has been taken and the funds would simply be transferred.
• Although in the highly unlikely event that I should leave to accept another university position during the next five years, the $300,000 would be fully repaid to UCA.

Thank you for asking me to present this proposal. My commitment is to the University of Central Arkansas. I love UCA and this Board and am as excited about the next five years as I have been about the past six years. Making the compensation package comparable to the U of A certainly helps.

Thank you, Randy, for your and the entire Board’s leadership and foresight. It is an honor to work with all of you.

Yours very truly,

Lu Hardin

MEMORANDUM DISTRIBUTED AT UCA BOARD MEETING MAY 2

• $300,00 was voted on three years ago. Paul McLendon has sequestered the money and it has been in place for two full years. A mere vote for the money to be transferred is all that is needed. The compensation vote is already on record with a motion by Rush Harding.
• The $150,000 (or $200,000) deferred compensation would be paid subject to Internal Revenue Code 457 (F). A previous contract existed with Win Thompson specifically citing Internal Revenue Code 457 (F).
• The sums placed into deferred compensation will not be paid to President Hardin until he retires. The sums will then be paid out over a period equal to his final compensastion, i.e., if there is $900,000 of deferred compensation in the fund when the president retires and his salary is $300,000/year, he must legally draw the sum over a three-year period.
• Since this is deferred compensation, it is not required to be reported as present income. The University of Arkansas presently has a fund of deferred compensation of $150,000/year for David Gearhart and Alan Sugg. Our research, per the Board’s request, indicates both U of A positions pay $450,000/year with $300,000 as present income and $150,000 as deferred compensation. President Hardin is currently paid $250,000/year with no deferred compensation.
• All of the above were positively reviewed by Legislative Audit when Win Thompson was president. I (Jack Gillean) helped draft the documents and will draft essentially the same documents for this package.
• Finally, as stated, the $300,000 has already been voted on and is of record. The deferred compensation does not immediately vest and therefore, is not subject to FOI. That is why Alan Sugg shows only $300,000 income in Arkansas Business. The motion publicly simply would be to approve all personnel proposals.

Respectfully submitted,

Jack Gillena, VP for administration

Barbara Anderson, executive vice president

Paul McLendon, vice president for finance

Comments

If Lou had ambitions for a higher office they are taking a major hit right now. He had a pretty good reputation before, but now he is coming across as greedy and money hungry.

Posted by: ARKDEMOCRAT | July 24, 2008 08:09 AM

and,

crooked, a liar, bad leadership, poor judgement, not to bright, uh, what else?

Posted by: Fletch | July 24, 2008 08:18 AM

oh,

full of himself.

Posted by: Fletch | July 24, 2008 08:19 AM

In the final analysis, this issue rests squarely on the UCA board's shoulders. Greedy public servants feasting at the public trough are to be expected. Lou was handed a cookie jar and told to take what he wanted. He deserves all the public shame and ridicule he receives.

However, the board is responsible for being a check on the institution's administrators, and they failed. Rather than exercise independent leadership and judgment, the board took the bait on the pay and the secrecy from the administrators hook, line, and sinker.

". Finally, as stated, the $300,000 has already been voted on and is of record. The deferred compensation does not immediately vest and therefore, is not subject to FOI. That is why Alan Sugg shows only $300,000 income in Arkansas Business. The motion publicly simply would be to approve all personnel proposals."

The argument presented in the Stephens Media story by Ben Beaumont was that deferred compensation was potentially not subject to the FOIA because of the source of the funds, not the issue of vesting. The UA appears to fund their deferred compensation packages from the UA Foundation. The money does not appear to even pass into UA's hands. Nonetheless, they consider it a public record.

Under the ridiculous "vesting" theory advanced by the UCA administrators, the only reportable salary of a public servant employed at-will would be the salary acually paid or accrued. For example, an at-will public employee is not vested in his or her salary from August - December.

In any event, the FOIA is not concerned with vesting. It is only concerned with whether a particular record is a public record. I submit that a record of deferred compensation for a public employee that is voted upon by a public body is a public record on its face.

Posted by: Phoenix | July 24, 2008 08:23 AM

The memo states that Lu Hardin was supposed to use "comparable institutions" for salary comparisons.

However, UAF, Ole MIss, and Miss. State are *not* comparable to UCA.

Those three institutions offer, not only undergraduate education, but also numerous graduate and professional programs at the master's and doctoral level. For example, UCA does not offer engineering, even at the B.S. level, much less the M.S. and Ph.D. level.

In addition, the comparison with the UA system is really ridiculous.

The UA system includes a medical school, several 4-year campuses (UAF, UALR, UAFS, UAPB, and UAM), two law schools (at UAF and UALR), the Clinton School of Public Service (at the Cinton Library), in addition to a few community colleges.

There is nothing wrong with UCA trying to improve its quality, but it has a long, long way to go before it is, in any way, comparable to UAF, Ole Miss, Miss. State, or the entire UA System.

Posted by: A. Hugh Mann | July 24, 2008 08:38 AM

Anytime the words 'not subject to FOI' come up, you've used your competitor(UA System)'s lawyer to get something, and your own legal staff hasn't chatted up (excluding Lu's JD, but he's not practiced in a while), you can pretty much expect this kind of mess.

Also, I'd like to see a comparison of what the ASU president makes (and whoever leads the Jonesboro campus if it isn't this person - since ASU has other schools allied with it) unlike UCA, along with some of the smaller schools (ATU, HSU, UAM, etc).

Posted by: anoncow | July 24, 2008 09:14 AM

Has anyone determined the salaries of the "comparable" universities according to level of academic achievement? I suspect the first qualification of the other institutions of Higher Educatioin is earning a Ph.D. Does Hardin have a doctorate? If not, then he should be replaced. Period.

Posted by: GTS | July 24, 2008 09:44 AM

Where has Warwick Sabin gone in all this foofaraw?

Posted by: Maj. T.J. 'King' Kong | July 24, 2008 09:52 AM

How many other bloodsuckers like the Oxford American has Hardin allowed to attach themselves to the public's treasury at UCA?

Posted by: Earl Swagger | July 24, 2008 09:55 AM

The problem here is that the legislature has decided to use wage controls to micromanage salaries rather than economics. The universities, hospitals, and other state organizations find clever ways to get around these short sighted policies. If say, UAMS wants to hire a highly qualified doctor and the going rate for the doctor is say $900,000 a year due to her tremendous skill and ability to save lives, UAMS cannot hire her without using some private foundation to make up the difference between the going rate and some arbitrary value decided upon by the legislature. The athletic foundations do the same thing. Price controls don't work and neither do wage controls. Wage controls only prevent government agencies from being able to hire the best people possible.

Posted by: Severus | July 24, 2008 10:31 AM

Severus- there is no evidence that Lu Hardin is the best person possible for the UCA presidency. He is nothing more than a political appointee. End of story.

Is it surprising that he and the UCA Trustees, with the exception of only 1 or maybe 2 Trustees having even a smidgeon of integrity, acted like they did? No. UCA Trustee Dr. Michael Stanton should be held up as an example of how we would hope UCA and all other students would turn out. Lu Hardin and the other Trustees should be kept away from the general public given their self-serving actions in this matter. Folks like that live to subvert the Arkansas Freedom of Information Act (FOIA), not uphold it. They have nothing but contempt for the public "who shouldn't be nosing around our business".

When will the firings and resignations begin?

Posted by: Sound Policy | July 24, 2008 10:58 AM

>>When will the firings and resignations begin?<<

I bet we will find out tomorrow at the Board Meeting!

Posted by: witwdik | July 24, 2008 11:02 AM

NEWS BULLETIN- Lu Hardin has just hired Karl Rove (Herr Karl to his friends) as his media person. Now we'll surely get the truth, the whole truth and nothing but the truth out in the open!

Posted by: Sound Policy | July 24, 2008 11:18 AM

I wonder what the legality is of a board member living in university housing with tens of thousands of dollars being spent to renovate the housing and erect a special fence to prohibit his dog from digging under it.

Posted by: RumorWoman | July 24, 2008 11:42 AM

I wonder what the legality is of a board member living in university housing and tens of thousands of dollars being spent to renovate the house and put up a special fence to keep his dog from digging underneath it.

Posted by: RumorWoman | July 24, 2008 11:44 AM

When will the firings and resignations begin?<<

If I know Arkies like I've seen Arkies then it ain't gonna happen. Huck-a-Snake set a new
standard of nose thumbing at public indignation and postures.
Nothing much is gonna change. President Hardin will get his money, just a little
later than planned. The show's almost over unless
RumorWoman is batting a 1000.

Posted by: eLwood | July 24, 2008 11:54 AM

Well, ole Lu obviously subscribes to the philosopy "Ain't nobody gonna scratch your balls for you", but good golly what an unseemly love affair between the president and the board. It is the same phenomena that caused corporate boards around the world to vastly overcompensate CEOs in some sort of vicarious ego trip. Why, if we can give our Prez more perqs than the Hog U prez, pretty soon UCA will fly higher faster and further than anyone else!

Posted by: Sanford | July 24, 2008 11:58 AM

Doctor/schmoctor, Severus.

Lu isn't even a PHD, for crying out loud. Comparing legislative controls over salaries at UCA with the hiring of medical doctors at UAMS is like comparing apples to oranges.

I know the problem you outlined with the hiring of medical doctors is a valid point, but there is no nexus here with Lu's situation at UCA.

I'll bet there are many qualified people out there who would take the UCA Presidency for less than what Lu was trying to rip them off for.

Posted by: Old Blue Eyes | July 24, 2008 12:04 PM

Let's just lay it all out there. I am pretty certain we were willing to give this guy the benefit of the doubt. We were willing after a few weeks of heated questions, to let this all blow over as a little mistake. But, with this new piece of information, I have a few thoughts to lay out there, and I am sure faculty/staff/involved parties would have much to add to this, as I am barely an interested party, more of a concerned citizen, like I think most everyone else on here:

1)What "school" was looking to take Lu away.

2)If there was a school, would Lu really consider leaving? If he has any hopes of being governor or aspirations of any high political office for that matter, would leaving the state of Arkansas even be an option.

3) What else has he lied about? Job opportunity-probably. Bonus-definitely. Public or private-definitely. How the bonus came about-definitely. Someone mentioned enrollment numbers being skewed, along with other things.

4) Unless you knew what you were doing was WRONG, why would you think to mention to keep a decision secret?

5) What is going on with that board on this president? What does he do for them that are so willing to just throw so much money at him? Oh yeah, his success....

5) Finally, what has he REALLY done for UCA? I have seen it mentioned on this blog before; I am quite sure that if you gave the UALR pres $1 million-plus he could grow that campus exponentially. So the board throws money (budget that could go for education) at him to grow the campus, then they throw more money (bonus that could go for....education?) at him to keep him around. But why? If he was so ready to go, could they not have brought in a new, young guy that could do just as much (or more) with a lot less.

I smell something seriously fishy going on. This is just one layer, I can't imagine what is under the next layer.

Posted by: DHO | July 24, 2008 12:27 PM

Dear Mr. Harding:

Here is the website for the Carnegie Foundation: http://www.carnegiefoundation.org/classifications/index.asp

The highest Carnegie basic classifications are: Research University/Very High (RU/VH), Research University/High (RU/H), and Doctoral/Research University DRU). In Arkansas, there are no RU/VH universities. However, UAF has an RU/H classification and UALR has a DRU classification. These are the only public universities in Arkansas with these classifications.

The next level of classifications includes: Master's/Large (M/L), Master's/Medium (M/M), and Master's/Small (M/S). In Arkansas, UCA and ASU have M/L classifications. ATU is classified as M/M, and UAM is classified as M/S. These are the only public universities in Arkansas with these classifications.

The next level of classification includes various Baccalaureate classifications, e.g., UAPB, UAFS, and SAU.

The final level includes various Associate's classifications. Community colleges are classified here.

So, in Arkansas, UAF has the highest classification, in category 2. Next is UALR, in category 3, followed by UCA and ASU, in category 4. ATU comes in 5th, in category 5, with UAM in 6th place, in category 6.

So, Mr. Hardin should compare his salary with other category 4 (Master's/Large) schools, such as ASU-Jonesboro, not with category 2 (Research University/High) schools like UAF, Mississippi State, and the University of Mississippi. BTW, the University of Southern Mississippi is also a category 2 (RU/H) school. All of these schools are two classification levels higher than UCA. There are no comparable schools in Mississippi.

But here's a list of some category 4 (Master's/Large) schools in the region:

Arkansas State University, enrollment 10,508
University of Central Oklahoma, enrollment 14,598
Middle Tennessee State University, enrollment 22,322
Eastern Kentucky University, enrollment 16,183
University of Southern Alabama, enrollment 13,340
Southeastern Louisiana University, enrollment 15,465
James Madison University (Virginia), enrollment 16,108
University of North Florida, enrollment 14,533
Kennesaw State University (Georgia), enrollment 17,955
University of North Carolina-Wilmington, enrollment 11,574
Marshall University (West Virginia), enrollment 13,920

Schools like these are comparable to UCA in enrollment, programs, and degrees.

Perhaps the UCA Board should be using them for compensation comparisons.

Posted by: A. Hugh Mann | July 24, 2008 01:07 PM

They have been playing fast and loose with the facts and money for so long they got sloppy, and cheap (none for faculty.) This is mostly about the perks and slush fund, low interest, no interest loans from the foundation, and on and on. No one will dig that deep. This game is being played across the state. The big pig started this decades ago and everyone else has learned by example.

Posted by: Fletch | July 24, 2008 01:21 PM

Fletch,

I have to agree with you on this one!

A. Hugh Mann,

Good find on the universities that are actually comparable with UCA.

Posted by: witwdik | July 24, 2008 02:04 PM

Is Lu being roasted and toasted for some charity soon? If I were him I would come down with a bad case of the flu. I have a feeling there will be lots more roasting than toasting. And though people will be chuckling as if it were all in good jest....it won't be not really.

Posted by: DHO | July 24, 2008 02:17 PM

Anyone catch the interview in the DG?

I thought his comment on how he gave his money back because he just could not take such money with the faculty/staff not getting raises. Uh....I think we all know that he gave they money back after the fact that the public found out about the money. I guess the fact that just a week ago or so he said the reason he was going to give the money back because he was not aware of how the public would perceive this situation.

Yeah, Lu you can try to spin this into a positive now, "I will not take another cent from the University until each faculty member receives a a raise" but you have been found out and the memos/letters are public to prove it.

Posted by: DHO | July 24, 2008 04:15 PM

A. Hugh Mann, thank you, and I agree that these Universities you have provided are indicative of more appropriate institutions for compensation comparisons. Thank you.

Posted by: rfhiii | July 24, 2008 07:05 PM

Mr. Harding:

You're welcome. I will add that if UCA seeks to move up to the Doctoral/Research University (DRU) classification level, then it might be appropriate to look at other DRU schools (like UALR) for comparisons also. However, I think you will find that the UCA president is already being paid more than the UALR Chancellor (though I have no idea about deferred compensation or other hidden forms of compensation for the UALR Chancellor).

Changing the subject, I'd like to thank you for being a patron of the arts in Little Rock. I have noticed your name several times recently, in connection with the Arkansas Arts Center, The Arkansas Repertory Theatre, and The Weekend Theatre. I am especially impressed with your support for The Weekend Theatre, which is quite a bit less mainstream than the other two organizations. The Weekend Theatre is a real gem and deserves much more recognition for its work and for its dedication to social consciousness. Thank you for helping to keep it alive so that the rest of us can enjoy it!

Posted by: A. Hugh Mann | July 24, 2008 08:59 PM

A. Hugh Mann, thank you, I assure you I want to try and get it right. I am confident that every bit of public/private compensation for every University President/Chancellor will be public shortly. Thank you for your kind words. My wife and I like to support non-profits like the Weekend Theatre because they are so underfunded and deserving. We really appreciate the social themes their plays promote. Your constructive criticism is appreciated and I will do all I can to be better informed and prepared to serve those that matter at UCA. Thank you

Posted by: rfhiii | July 24, 2008 09:22 PM

"But here's a list of some category 4 (Master's/Large) schools in the region"

The institutions in this list are merely examples. I am absolutely astounded that Mr. Harding is unaware of the formal list of 'Peer Institutions' that the UCA Office of Institutional Research uses for routine comparisons on various higher education metrics. Why doesn't Mr. Harding know about this formal list? It raises serious questions about what else he doesn't know about higher education and his ability to serve as an institutional steward.

Mr. Harding, click on the blue link to view your list of Peer Institutions.

Posted by: DrRingDing | July 24, 2008 09:41 PM

We are provided with information showing these type numbers for various institutions broken down geographically and by the type of institution. I am sure when I come to a meeting or a retreat the numbers provided to me are taken from those lists. I don't pour over those lists and spend time mulling over them. We are not expected to assemble this information ourselves, it is provided to us to consider. I need to take responsiblility to insure that I am better prepared to contemplate such issues. Administrative officials prepare budgets and set salaries. The Board ratifies those suggestions and sets the compensation of the President. Your criticism is warranted and thank you for your comments.

Posted by: rfhiii | July 24, 2008 10:09 PM

The letter submitted by the administration is a little fishy. At the bottom on the note, Jack Gillean's name is spelled wrong. Most of us I'm sure know to spell our own name. Whoever created (see also "doctored") this document apparently didn't.

Posted by: ArGuy | July 24, 2008 11:25 PM

A. Hugh Mann, I have requested the salaries of administrative staff and faculty at the institutions you have listed. I will also have how UCA's compensation ranks with other 4 year institutions in AR. I do understand that it is appropriate to consider institutions listed as our "Peer Institutions" for comparison purposes. We did exactly what the Faculty Senate President requested today in not accelerating the President's bonus. Thanks

Posted by: rfhiii | July 25, 2008 06:31 PM

Arkansas Blog

The Lu Hardin papers UPDATED

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