Ransdell contract includes 10-year payout incentive

Jacob Dick

President Gary Ransdell will be paid nearly $119,000 a year for 10 years, or nearly $1.2 million in total after his presidency in addition to retirement benefits, as guaranteed by a directive in his employment contract.

According to the longevity incentive clause of Ransdell’s contract approved by the Board of Regents in 2002, if the president retires after Jan. 1, 2012 with a “satisfactory” performance evaluation, he is entitled to an annual payment of 25 percent of his salary for 10 years.

These benefits were designed in the contract to mature over the course of Ransdell’s presidency, a tactic referred to in executive hiring as “the Golden Handcuffs.”

“I think the board had a desire to keep us here but I think they also knew the compensation levels weren’t competitive with other institutions at the time, so that was a way to offset other levels in the compensation package,” Ransdell said.

In 2002, Ransdell’s annual base salary was set at $210,320 with a 25 percent raise guaranteed on Jan. 1, 2007 if the president received a “satisfactory” evaluation. When 2007 came around, the board, chaired by the same regent in 2002, Lois Gray, approved an addendum to Ransdell’s contract extending his employment to 2022 with a 15 percent raise in 2012 and a 10 percent raise at the beginning of 2017.

Ransdell’s salary is estimated to be $475,319 after the 2017 raise, making the 25 percent retirement payment roughly $119,000 a year over 10 years. This post retirement payout is in addition to a $5,000 annual premium per year long term care policy for the president and his wife when they need assisted living arrangements. Ransdell said he doesn’t believe this deferred incentive will affect his state retirement.

In the November 2002 minutes from the meeting where regents accepted the president’s contract, Regent Kristen Bale, chair of the President’s Contract Review Committee, echoed the idea Ransdell should be enticed to continue his work towards WKU’s future.

“Recognizing the remarkable achievements to date, which have led to unprecedented progress on our campus, the President’s Contract Review Committee believe that Western Kentucky University should make every effort to continue this path of transformation,” Bale said. “Therefore, an innovative contract and compensation package has been developed for Dr. Ransdell with the conviction that, under his inspired leadership, even greater heights await our wonderful university.”

From Ransdell’s own words in the November 2002 minutes, the president was happy to continue his work with a board completely in tune with one another.

“So I’m grateful for this Board- just this week, I received a comment from a president of another university in Kentucky complimenting me on our Board and how fortunate we are to have a Board that is cohesive, that’s focused on a strategic plan and transformation; he was most complimentary of the relationship that I’m fortunate to enjoy with this Board,” Ransdell said at the 2002 meeting.

Ransdell said after four years into his presidency he was planning for the long-term at WKU but the board’s concern over losing another president was legitimate.

“I was beginning to achieve some success here and, you know, the competitive world being what it is, yes, there were other institutions that made offers over the years, but not so much in recent years because I made it clear I wasn’t going anywhere,” Ransdell said.

But despite glittering comments and enticing incentives, every regent on the board during the decision to establish Ransdell’s contract with the longevity clause voted in favor of the contract except for Faculty Regent Robert Dietle.

“It was my first board meeting and I knew it wouldn’t win me any friends but I couldn’t vote for it,” Dietle said. “At the time, there was a 3 percent raise pool for faculty and I couldn’t understand why that was the reality for faculty but not for the president.”

He also said he didn’t remember any discussion by the board at the time over concern Ransdell might be enticed elsewhere.

“No one suggested he was being recruited,” Dietle said “He wasn’t going anywhere.”

He did remember the board discussing what could be offered to Ransdell in order to make it more profitable for him to stay at WKU than leave. The board couldn’t simply offer a large salary but Ransdell’s “Golden Handcuffs” could take the form of a large payment in the future.

That isn’t to say that this incentive is singularly unique to WKU or Ransdell’s contract.

“This isn’t specific to Ransdell, who’s not even close to the highest paid president in the state,” Dietle said. “Its part of the culture now. I wonder if universities are becoming fiefdoms for presidents who are encouraged to be CEOs.”

From Ransdell’s perspective, he said he believed the board was ready to have a president that would follow through at the university instead of just stopping off before a better opportunity comes along. In the 18 years before Ransdell began his term in 1997, WKU went through four presidents after Dero Downing stepped down.

“I think they were anxious to have a president that would commit themselves to this school and this school only,” Ransdell said. “It would have been a far bigger story if we had left WKU and gone somewhere else, and this incentive ensured that we stayed at WKU.”

Despite feelings over what should be offered to university administrators or the financial implications for WKU, the contract has been approved for several years and the incentive will be payed. Ransdell said he believed it is insincere to be concerned about it now and that if there were issues, they should have been discussed earlier.

“If someone had a concern about that, it probably should have been expressed in 2002 … but I think it’s a little awkward to go back to something that happened 14 years ago and talk about something that was designed to help WKU,” Ransdell said. “I don’t see a correlation with financial circumstances today with an incentive that was put in my contract 14 years ago.”

Dietle had similar advice for students and faculty to take in consideration when future decisions are being made.

“Pay attention to debates that do occur and communicate with your regents,” Dietle said.

Correction: In the original version of this article, a second reference explaining the calculation of Ransdell’s benefit said he would receive $119,000 over 10 years. Ransdell will actually receive $119,000 a year over 10 years as stated in the first reference. The graphic accompanying the story also depicted Ransdell’s salary in 2015-2016 as $423,824. It was actually $427,824. The Herald regrets the error and encourages readers to reports errors in an effort to remain accurate and responsible. 

Reporter Jacob Dick can be reached at (270) 745-6011 and [email protected]. Follow him on Twitter at @jdickjournalism.