The Lu Hardin papers UPDATED | Arkansas Blog

The Lu Hardin papers UPDATED



Courtesy of Stephens Media, I have on the jump the full text of the letter UCA President Lu Hardin wrote to his Board of Trustees seeking a $150,000 pay bump in the form of deferred compensation over six years. I also have the unsigned memo, bearing the name of UCA administrators, supporting the legality of the arrangement and the legality of keeping it secret.


Some points.

1) Hardin said he'd been advised by a University of Arkansas attorney that deferred comp for university officials does not require a public vote or disclosure of deferred comp. I doubt this because we'd recently gathered UA deferred comp figures. Indeed, the UA says in this Stephens Media story that they do not hold such matters to be secret.

2) I'd like to know more about the reference to a new privately funded home for Hardin (although he said he wasn't interested.) UPDATE: I'm told this was a matter studied by a committee that was contemplating a shuffle of UCA offices -- athletic department to Alumni Hall, alumni and foundation offices to the president's house and a new president's house built on vacant land nearby. Hardin said it wasn't a good time for such a move, Trustee Rush Harding recalled.

3) Hardin says his "total package" of $402,300 would be $50,000 -- actually $41,000 to $42,000 -- below the U of A pay. But this is only if you don't include his "catchup" $300,000 bonus, paid in May, an acceleration of $60,000 annual deferred comp payments. At least two of those years, at $60,000 per, should fairly be added to his overall compensation, making him pricier than the UA president and UAF chancellor. As a reader has noted in an earlier thread, for all its growth, UCA is not considered at the same level as the UA. (And its faculty is far below the UA in average pay.)

4) Contrary to what appears on the unsigned memo, I've been told Jack Gillean, the VP for administration, did not draft it.

Sorry Yogi. This one isn't over until it's over.

COMMENTARY: Brummett recaps and says it's about "greed and arrogance of power." Ouch.

UPDATE: What happens at the UCA press conference and Board meeting tomorrow. The process starts over. Apologies for mistakes, a commitment by the Board and Hardin to do things properly in the future and a plea for redemption from the UCA community. In the short run to intermediate run, a pay increase for Hardin isn't likely in the cards.


March 25, 2008

Mr. Randy Sims
First State Bank
620 Chestnut
Conway, AR 72032

Dear Randy,

Thank you and the Board of Trustees for approaching me about determining a compensation package consistent with comparable universities.

Candidly, I have been surprised with the results of my research. Here are the compensation figures from comparable universities:

• Alan Sugg, University of Arkansas, $294,500 + $150,000 deferred = $444,500
• David Gearhart, University of Arkansas, $293,800 + $150,000 deferred = $443,500
• Robert Khayat, Old [sic] Miss (15,000 students), $423,100 + deferred compensation exists, but amount is not ascertainable.
• Robert Foglesong, Mississippi State (17,000 students), $423,100 + deferred compensation exists, but amount is not ascertainable.
• Lu Hardin, UCA, $252,300

I had a lengthy conversation with Alan Sugg who offered the U of A tax attorney for assistance. However, the $150,000 is paid quarterly into a fund each year in Alan’s name per his investing direction.

Per the Board’s question, I would respectfully request the following:

• No increase in salary. While I will be almost $50,000 below the U of A System and the U of A chancellor, we should not increase the salary at this time. Because of state funding issues, we are looking at a five percent tuition increase. Arkansas State University is planning a 6.3 percent increase and the U of A is planning a 6 percent increase.
• Mary and I are committed to remaining in the President’s House on the UCA campus for two reasons. One reason is perception. Even though the almost $1 million cost of a new home would be privately funded, we do not feel this is the time to move. Secondly, even though Mary and I genuinely appreciate Rush, Harold and Linda’s work, we have decided that we enjoy the home and the close proximity to campus. It is a lot of work at times, but we are committed and very happy to stay here. We also appreciate the great tradition associated with presiding in this beautiful home.
• I would respectfully request that $150,000 per year be placed in a deferred income fund identical too the U of A’s policy beginning in January 2008 and through the remaining contracted period. While the total package will be $50,000 below the U of A, this is still very generous and fair. According to the U of A attorney, this does not require a public vote because it is “deferred.”
• Finally, the vote of the Board to grant $300,000 at the end of five years’ employment has been taken and is of record. We are now concluding three full years. This money has been fully sequestered by Paul McLendon, and I would request that this be paid as a partial “catch up” as the third year is ending. Again, this vote has been taken and the funds would simply be transferred.
• Although in the highly unlikely event that I should leave to accept another university position during the next five years, the $300,000 would be fully repaid to UCA.

Thank you for asking me to present this proposal. My commitment is to the University of Central Arkansas. I love UCA and this Board and am as excited about the next five years as I have been about the past six years. Making the compensation package comparable to the U of A certainly helps.

Thank you, Randy, for your and the entire Board’s leadership and foresight. It is an honor to work with all of you.

Yours very truly,

Lu Hardin


• $300,00 was voted on three years ago. Paul McLendon has sequestered the money and it has been in place for two full years. A mere vote for the money to be transferred is all that is needed. The compensation vote is already on record with a motion by Rush Harding.
• The $150,000 (or $200,000) deferred compensation would be paid subject to Internal Revenue Code 457 (F). A previous contract existed with Win Thompson specifically citing Internal Revenue Code 457 (F).
• The sums placed into deferred compensation will not be paid to President Hardin until he retires. The sums will then be paid out over a period equal to his final compensastion, i.e., if there is $900,000 of deferred compensation in the fund when the president retires and his salary is $300,000/year, he must legally draw the sum over a three-year period.
• Since this is deferred compensation, it is not required to be reported as present income. The University of Arkansas presently has a fund of deferred compensation of $150,000/year for David Gearhart and Alan Sugg. Our research, per the Board’s request, indicates both U of A positions pay $450,000/year with $300,000 as present income and $150,000 as deferred compensation. President Hardin is currently paid $250,000/year with no deferred compensation.
• All of the above were positively reviewed by Legislative Audit when Win Thompson was president. I (Jack Gillean) helped draft the documents and will draft essentially the same documents for this package.
• Finally, as stated, the $300,000 has already been voted on and is of record. The deferred compensation does not immediately vest and therefore, is not subject to FOI. That is why Alan Sugg shows only $300,000 income in Arkansas Business. The motion publicly simply would be to approve all personnel proposals.

Respectfully submitted,

Jack Gillena, VP for administration

Barbara Anderson, executive vice president

Paul McLendon, vice president for finance

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