How not to fire a Higher Ed CEO



One of the most frustrating things about higher education (and the business world, too) is how failed CEOs get golden parachutes. At my institution, Illinois State University, everybody is still fuming that former president Tim Flanagan received a $480,000 golden parachute for being fired after a few months on the job. Although the trustees could have fired for cause (because that’s why they were doing it), a payoff is considered easier than ongoing litigation.

At least Illinois State was honest about the payoff. The same can’t be said another, albeit smaller, golden parachute in Illinois. When the Illinois Board of Higher Education dumped executive director George Reid on October 30, 2012, they declared in a press release it was because Reid was travelling too much and wanted to spend more time with his family. Sure he did.

But a new report from the state inspector general’s office (pdf) reveals that this was all a lie, and it includes disturbing details that the IBHE was trying to conceal its own failures. The IBHE owed Reid only $16,000 under its contract (one month’s pay), so at least give them credit for not signing a ridiculous contract like many institutions.

However, the IBHE agreed to pay Reid an extra $32,000 in return for not suing, Now, Reid had wasted state money (using the IBHE owned car as his own personal vehicle, and forcing employees to spend up to $6500 in rental car fees when there was no evidence Reid was using the car), but the real reason he was being forced out was because so many employees in the IBHE hated him and his management of the agency.

A private attorney working for IBHE wrote to Reid’s attorney on October 29, 2012, “I want to make sure there are no press issues that he is being paid for services not performed.” The press release announcing Reid’s departure said it was because he was traveling too much and wanted to spend more time with his family. And, the IBHE board voted at its Sept. 25, 2012 meeting, when it was deciding to get rid of Reid, to destroy the verbatim recordings of the Dec. 7, 2010 meeting, when the board had discussed and authorized the hiring of Reid.

My advice to the IBHE: start being more transparent. And instead of paying $198,000 a year for a failed president of a Kentucky university, why not hire a retired professor from Illinois for much less who understands the state’s higher education system from the inside?

It’s time for higher education to set a model for the business world by ending bad contracts for CEOs, stopping golden parachutes, and being open and honest with the public when leaders fail.