Leave clause included in presidential agreement

By Luke Nozicka

Termination would cost Dunn $250,000

Incoming SIU President Randy Dunn’s contract negotiation may have been rushed and includes what Dunn considers a bulky leave clause.

Dunn and the SIU Board of Trustees negotiated the contract for three days beginning Feb. 13, one day after his interview with the board in St. Louis.

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The board approved the agreement Feb. 17, and publically named Dunn the eighth president of SIU that same day.

Raymond D. Cotton, a Washington, D.C. attorney who specializes in presidential contracts and compensation, said three days is a rushed time frame. He said presidential contract negotiations usually take anywhere between a few weeks to a month.

The contract states Dunn owes the university $250,000 if he terminates the four-year presidential contract before 42 months, or three and a half years, as of Aug. 17.

Dunn will earn $430,000 each year as SIU president. Dunn said this type of clause is typical for CEO arrangements.

“It’s not all that unusual to find some sort of contract language that would allow the employee — in this case the president — to separate from the university with some amount of notice,” he said. “Going hand-in-hand with that, it’s not unusual to see some amount of liquidated damages that would accompany separation.”

Cotton, who has specialized in presidential contracts for 33 years, said this is not normally seen in presidential contracts.

“In all the contracts that I’ve done, I’ve never put a clause like that in any of them,” he said. “When boards have brought up the concept, I would discourage them from pursuing it, and boards — at least my clients — have dropped it immediately. I would advise them strongly not to do so.”

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Cotton said he was curious as to who advised the board on this decision, as it poses a potential problem for the university.

“If Dr. Dunn or any other president became unhappy in his job, but yet chose to stay anyway because he didn’t want to pay the penalty, how does that help the university?” he said. “It impinges on Dr. Dunn’s academic freedom.”

However, President Glenn Poshard’s first contract had a similar clause. It required him to reimburse the university for 50 percent of his remaining salary for each year he left early if he were to do so.

Poshard said the clause was removed as he has served for eight and a half years of his initial five-year contract.

Dunn said while his clause is normal, he considers the reimbursement amount to be hefty.

“As I’ve looked at some of these contracts, I would say it’s on the high side,” he said. “But I don’t think it’s unfair.”

Cotton could not say if the reimbursement amount is average, as he has never seen a provision like this in a presidential contract.

The clause may be in the contract for numerous reasons, including for the cost of a new presidential search or for reputational damage to the institution, Dunn said.

He said it was strange his Youngstown State University contract did not require a payment clause like SIU’s. At Youngstown, Dunn’s contract had a 180-day free and clear clause, which allowed for leave as long as he provided a 180-day notice.

Dunn submitted his 180-day notice to leave YSU Feb. 17, making his earliest possible leave date Aug. 17, exactly one day before SIU’s 2014-2015 school year begins. However, Youngstown released Dunn from his contract Friday.

Dunn said his Murray State University contract did not include this type of clause either.

He said the clause did not make him reconsider the position, as he plans to finish his career at SIU.

“I’m not going to be looking at other jobs; I’m not thinking about one more move,” he said. “It was easy for me to agree to that type of language because from my perspective, it’s never going to be put into effect.”

In accordance with board legislation, the board may terminate Dunn’s contract without cause.

If there is no prior termination, Dunn’s contract expires Feb. 16, 2018. However, the board can decide whether it wishes to renew or extend the agreement an additional four years before the termination date.

The contract states the board will reimburse reasonable moving expenses, not exceeding $13,000, for Dunn to relocate to southern Illinois. He and his wife Ronda have a purchase agreement for a house in the Orchard, a subdivision about five miles from campus.

“We’re still talking with the mover on exact dates, but I would hope that we’re able to have everything moved in some time right after Easter weekend,” Dunn said.

He said the April 16 and 17 board meetings will focus on a presidential transition plan.

“Any additional time that Randy can come early is going to serve him and the university well if we can really get him up to par before I leave,” Poshard said.

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