COLUMNISTS : Tale of two buyouts
Posted on Tuesday, September 2, 2008
URL: http://www.nwanews.com/adg/Editorial/236145/
Acaller phones in every so often to let me know
what’s on his mind. Sometimes it’s car racing.
Often, it’s the way various school districts fail to keep their finances in order. My caller gets especially worked up whenever another superintendent who’s made a mess of his district is rewarded with an expensive buyout of his contract. Obviously, we say, we went into the wrong line of work. We should have tried something that would pay us big bucks just to go away. It’s not just school superintendents. Lately, we’ve seen a university president and a retired executive walk away with their own bundles of cash after doing things that would have gotten the rest of us fired on the spot. Not Tom Coughlin. The former No. 2 man at Wal-Mart retired not long before he was charged with embezzling from the company for years. He would later plead guilty to the charges and a sympathetic judge let him off with a house arrest, no jail time. The judge thought Mr. Coughlin had suffered enough already. And he had health problems.
Meanwhile, Wal-Mart filed a civil suit to avoid having to pay Tom Coughlin $ 17 million in retirement benefits. The lawsuit was filed on the grounds that the defendant had been cheating the company while he worked for it, and therefore wasn’t entitled to the generous retirement.
Just before the trial was to start, Mr. Coughlin and Wal-Mart agreed to settle. He didn’t get the full amount he wanted, but the company did let him have $ 6. 75 million. That way Wal-Mart avoided a public trial and any dirty laundry he might have aired. Wal-Mart: always thinking about public relations.
Last week, the long, sad story of Lu Hardin reached its all-too-predictable climax. The president of the University of Central Arkansas in Conway agreed to step down. He’d been caught in a web of falsehoods over a pay raise / bonus that he hasn’t been forthcoming about, at least not until the truth was dragged out of him, piece by painful piece. Then a memo turned up that he’d used to justify getting the extra money. The memo was Lu Hardin’s work, but he submitted it to the university’s board of trustees over the names of three vice presidents at UCA. That way it would look as if they were suggesting the raise, instead of him.
There was more, but those were the low points. By the time the board got around to accepting his tooslow resignatioon, Lu Hardin’s once sterling reputation was ruined. (The board’s reputation wasn’t in such good standing by then, either. )
So what happened once the whole tawdry mess had reached that point ? The board decided to buy out Lu Hardin’s contract, even though he’d resigned and not been fired. How much does he get ? About $ 1 milllion, it appears. Not a bad payoff for somebody who had to quit his job after being caught finagling.
It should be noted that Lu Hardin, like Tom Coughlin, also had health problems when their worlds caved in. Lu Hardin just had his second surgery in four years for eye cancer. May both men have full recoveries of their health.
That said, I hope they didn’t bump into each other on the way to the bank to deposit their going-away prizes. They made out like champs. Of course, the money won’t be able to restore their reputations. Those are shot. But the cash give-aways for getting caught won’t hurt. Any time their consciences bother them, they can take comfort in the fact that they’ve got a lot more dough stashed away than all of us armchair critics out here. Wal-Mart being a retail business, what it does with its money is its own concern. The company can give an embezzler an extra few million bucks any time it wants. The concerns with Lu Hardin are more complicated. UCA is a public school, funded by tax dollars. The board says Lu Hardin’s payoff will come from private foundation money and from a discretionary account that uses profits from the campus bookstore. So UCA students get to help send Lu Hardin into his self-imposed and lucrative exile. The next time my caller rings me up, we can add two more lines of work to the list of those we missed out on: Wal-Mart top dog and university boss. Both pay great, even if you really should hide your face as you leave them.
—––––– • –––––—George Arnold is opinion editor of the Arkansas Democrat-Gazette’s northwest edition.