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Was severance package for college president excessive?

On Behalf of | Feb 8, 2018 | Employment Contracts |

In the wake of the Larry Nassar sexual abuse scandal, the president of Michigan State University resigned from her position of presidency after facing angry and vicious criticism. Lou Ann Simons, claimed it is “only natural that I am the focus of this anger,” and therefore she is limiting any personal statements, but was resigning “according to the terms of her employment agreement.”

Well, it is that employment agreement that now has some people complaining. In her contract, she has an option to return to employment as a faculty member. Her first year’s salary would at the same full salary she was earning as president, $750,000. Her second year’s salary would be only 75 percent of that salary, but still a massive amount of $563,000.

After the second year, her salary and benefits would be based on an annual review according to her new employee contract. The details of this transition are still being worked on, but if Simon transitions into a faculty position, she would be the highest paid faculty member ever; although in 2016, there was a professor of physics earning $433,440.

Other perks in the contract that go along with the option of returning as a faculty member include an office in a building that she agrees on, which would encompass all of the necessities, such as administrative staff, computers and technology equipment and technical support.But that is not all. Her and her spouse will also be provided lifetime benefits for things such as tickets to football and basketball games, on-campus events and parking passes.

While many are complaining that this compensation is over the top, Simon has worked for Michigan State University for over 40 years in different positions. President of a university is a huge job with enormous responsibilities. Because this employment option was written into Simon’s employment contract, everything is perfectly legal, and she is entitled to this compensation.

This is a good lesson for everyone to pay close attention to an employment contract when you accept a position. If you are unsure about the language or what something means, have it reviewed by an attorney before signing. Your attorney may be able to negotiate some even better benefits or safeguards for you or have negative clauses removed. Never knowing what the future is going to hold, don’t take chances on signing an employee contract without having it reviewed.

Source: Inside Higher Ed, “Post-Presidency Benefits at Michigan State,” Rick Seltzer, Jan. 26, 2018


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