Carter’s contract kept him on at W.Va. State
West Virginia State University President Hazo Carter will continue to receive his full salary for two years after stepping down as president in part because of a clause in his contract that commits the university to employing him through 2014, even if he is no longer president.
The university amended its contract with Carter last week. The contract addendum makes clear Carter will stop leading the university this summer, allowing a new president to come in. But it also dubs him "president emeritus" for life and gives him two years' worth of other work, like fundraising for the now cash-starved university he led for the past quarter century.
State's board of governors hammered the deal out in the months since Carter announced in August he was going to step aside as president. West Virginia Higher Education Policy Commission approved the arrangement last Wednesday and it was signed late last week.
Carter's August retirement announcement followed a vote by State's faculty that they no longer have confidence in his leadership. The university professors cited financial problems, declining enrollment and the university's poor public image.
Even though Carter said then he was going to retire as president, he didn't say what are essentially the magic words - that he would leave the university entirely. Because of that, the university remained on the hook for his $166,244-a-year salary.
"When he resigned, he resigned as president, he did not withdraw from the contract," State Board of Governors Chairman Larry Rowe said in a telephone interview.
The distinction may be lost on many people, but it's common in executive contracts, Rowe said. For instance, universities are obligated to pay football coaches they have fired if the firing occurs before the end of their contract.
According to the 2009 contract Carter signed with State, "the Board commits to employ you as President, or in some other capacity, in a position to be determined by it, at the Presidential salary provided for herein, for a term ending on June 30, 2014, and any extension of such term subsequently agreed to in writing, unless you (a) voluntarily resign or retire, or (b) unless you are terminated 'for cause.' "
If Carter had chosen to "voluntarily resign or retire" entirely from university, State could have been allowed to keep his full salary for other purposes.
The university would, for instance, be able to solve about 7 percent of the roughly $2.3 million budget shortfall it faces next year, which could force layoffs. School officials hope the Legislature will send an additional $1.6 million State's way in the next budget year, an infusion of money that would dramatically reduce the shortfall.
Disagreements over leadership apparently do not rise to the level of forcing a "for cause" termination - instead there would need to be clear malfeasance. Attempting to force Carter out without paying him could have brought a court battle - not to mention would be a hard thing to do, given Carter's prominent status within the community.
Another major factor in keeping Carter on appears to be the length of his current contract, a five-year deal signed in August 2009 that obligates the university to employ him through summer 2014 and pay him his presidential salary, even if he is no longer president.
"Had it been, say, a three-year contract, it would have been very different," Rowe said.
If it had been a three-year contract, the obligation to employ Carter would be over this year.
Although lengthier contracts might reduce a university's flexibility, they are not unusual here. West Virginia University's President, Jim Clements, signed a five-year contract extension in April 2011.
The average university president serves less than nine years, according to a 2009 paper by Jim Monks, an economics professor at the University of Richmond.
Carter will now be tasked with helping to raise money for the university, something he had been criticized for failing to do enough of when he was president. Still, it appears the board thinks Carter will be able to raise more money each year than it is obligated to pay him.
University Board of Governors member Tom Susman said he thinks Carter's presence will be positive.
"I think he'll be an asset, and we'll know in a year if we get a return on the investment we hoped to get, and, also we have to honor our contractual obligation," Susman said.