A headline link to this article that appeared on washingtonpost.com Saturday, Oct. 1, incorrectly stated the potential amount of a Ladner severance package. It should have said $1 million.
Ladner's Severance Could Top $1 Million
Sunday, October 2, 2005
Under the terms of the contract he signed in 1997, American University President Benjamin Ladner could walk away from the job with a package worth more than $1 million.
The situation is complicated by questions some board members have raised about that contract, by a clause excluding severance pay if Ladner is determined to have engaged in fraud or dishonesty and by a surge of protest on campus.
Ladner was suspended in August during an investigation of his personal and travel expenses launched by the Board of Trustees. An independent report, disputed by Ladner, has questioned more than $500,000 in spending. The law firm hired by the board has continued to gather information, and the full panel is expected to meet Oct. 10 to decide Ladner's fate. A majority of the board now says he can no longer lead the private university, sources said.
By the terms of his 1997 contract, Ladner could step down with a one-year leave with full salary and benefits if he were terminated, plus compensation equal to his base salary, payable monthly or at the end of 30 days -- his choice. It also provides for $50,000 for relocation, as well as a tenured professorship that is always 20 percent higher than the next-highest faculty salary. Ladner teaches religion and philosophy.
Some trustees have questioned the validity of that contract, which they said was negotiated by the board's chairman at the time, William I. Jacobs, but not known to the full board.
Jacobs said in a statement that he discussed the contract with the full board. "It is my best recollection that the board accepted my report on behalf of the compensation committee and supported moving forward with the contract for Dr. Ladner," he said.
Jacobs said the contract was designed to retain Ladner, who had been a successful leader.
If Ladner were terminated "for cause," he would not be entitled to anything except the compensation he had already earned. The checks would stop coming, and he would no longer be on the faculty.
The 1997 contract defines "for cause" to include conviction or plea of nolo contendere to a felony; fraud or dishonesty; or the use of alcohol or drugs to an extent that impairs his ability to lead the university.
"Dishonesty -- that's the Achilles' heel of the contract," said Raymond D. Cotton, a lawyer who specializes in presidential contracts. "It's undefined. That can take in an awful lot of territory. Fraud is a defined term. It involves intent. But dishonesty. . . . "
Cotton said he had never seen a contract that specified pay 20 percent higher than the highest faculty salary. The industry standard, he said, is a year's pay at the level of the last year of presidential salary and a position on the faculty at a salary either the highest in that department or the highest at the university. Even the moving expenses, he said, are very generous.
"The contract is very poorly drafted," Cotton said. "It's ambiguous in many of its provisions."