The UCA prez's pay UPDATE II | Arkansas Blog

Friday, July 11, 2008

The UCA prez's pay UPDATE II

Posted By on Fri, Jul 11, 2008 at 2:37 PM


Re Point 3 below: It's a small town.

Returning from an Arkansas Press Association meeting, I ran into Rush Harding (pictured), the UCA trustee. He stopped his luxury pickup to chase me down on the sidewalk to answer the unanswered question below. He informed me that he'd donated $100,000 to the UCA Foundation today to cover the 2007 bonus with private funds. He said it had always been the university's intention to raise private money to pay that and internal university e-mails indicate as much, though the effort hadn't been successful.

There are no bigger boosters of UCA than Harding. Four years ago, he pledged roughly $1.275 million to the school. With today's gift, he's contributed around $1.1 million.

A hard-charging securities CEO who's used to calling shots, Harding admits -- and regrets -- that the style hasn't been particularly well suited to recent events surrounding executive pay at a public institution. He's been moving to set things right. The a.g.'s opinion is in the works. This payment was made today after I'd raised questions about the source of the $100,000  bonus for the first time yesterday. I suspect, whatever the attorney general opines about the $300,000 bonus paid this year that steps will be taken through additional contributions, or even a payback by the president if necessary, to set that right. I trust future business will be conducted in public. If all that comes to pass, it will be a good lesson learned, if a painful one for a school with plenty of good news to share.


Nobody is as tired of questions about UCA President Lu Hardin's pay as I am. (Well, OK. Hardin and school officials probably are tireder.)

But I've discovered I've been misstating some facts in the pay arrangement.

For the record, with a school attorney general's opinion request pending, I thought I'd recapitulate:

1) His legislatively authorized pay is $161,728. State law allows bonuses for college presidents, among other public employees, up to 25 percent of pay. He receives that, too, for a total of $202,150 in public dollars.

2) Hardin is paid an additional $51,614 out of "private funds," for total pay of $253,774. There is no cap on payment of private funds to a college president. This particular money is paid by the UCA Foundation, however. The foundation is incorporated as a nonprofit. It owns its own building. But ... Its income includes money from UCA in the form of lease payments for building space. The salary of the foundation's top officer, Kelly Erstine, is also paid by UCA. Is this really private money, given the commingling of public money in its operation? That question wasn't included in the school's recent opinion request to the attorney general. Perhaps it should have been.

3) The UCA Board authorized for Hardin a bonus of $100,000 in May 2007 for meeting all the targets set by the Board on his hiring five years earlier. It was deemed, according to the Board's resolution, to be a cumulatve payment of a $20,000-per-year bonus, "to be paid from legally available funds." I was told earlier by a trustee that this was to come from private money. However, I have learned, it did not.

UPDATE UPDATE: The $100,000 bonus was paid from UCA general funds in July 2007, not from private money, though with the expectation that it would be reimbursed by private money. That money, I'm informed, was reimbursed TODAY, about a year later. I'm still waiting an answer on the donor. (see top of item for answer). So, I asked UCA's Jack Gillean earlier in the day, it appears that public money, not private money, was used to pay Hardin a $100,000 bonus in 2007 on top of his pay and that this would appear to constitute a public payment in excess of the statutory cap on public spending. "That is correct," he said.

4) In May of this year, the Board voted to accelerate payment to Hardin of $300,000 in deferred compensation. The deal, struck in 2005, was to put $60,000 a year aside for him for five years, payable if he was still at UCA at the end of the period in 2010. The Board considered this private money, though it was drawn from the board's fund of campus-generated cash. If public, it exceeded the salary cap.

Legislative audit apparently plans to review all this at some point. College leaders hope to answer all possible questions soon and bring a close to a media squall that has obscured what they see as the central UCA story -- Hardin has presided over remarkable growth in college enrollment and prestige and trustees have tried to reward him for it. They blundered by doing it in private and, on occasion, dissembling about it.

It's worth noting that important questions about the legality of the bonuses has been put in the hands of an office headed by a potential political opponent of Hardin -- Attorney General Dustin McDaniel. Hardin has talked, as McDaniel has, about running for governor in 2014. It will be hard for critics to say Hardin and UCA were looking for home cooking.

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