University President Under Fire for $3.3M Severance Package
PITTSBURGH (AP) _ When University of Pittsburgh President Wesley Posvar negotiated his retirement, he arranged a $3.3 million package that would be the envy of many corporate executives.
But after a storm of outrage, Posvar’s golden parachute is collapsing and the school’s image is in a free fall.
State auditors are poring over the arrangement. Legislators are up in arms, and Posvar has given back some of the benefits he bargained for.
Until recently, Posvar’s tenure at Pitt had been praised, particularly for his elimination of the $30 million deficit he inherited when he took office in 1967.
Posvar, 65, who will step down July 31, also was credited with making Pitt a major research institution and bringing in millions in grants.
But Posvar’s retirement package, combined with alleged financial irregularities in the food service and other sections of the state-supported university, has stirred anger on campus and in the Legislature.
″The whole situation stinks,″ business Professor Dennis P. Slevin wrote to The Pittsburgh Press. ″It reeks of rotten ethics, secrecy and abuse of power.″
Sixty faculty members called on university trustees to resign and demanded an audit, accusing Posvar of having ″systematically looted″ the university.
Posvar has left town, turning over his duties to the school’s provost. He has been unavailable for comment since May 31.
Posvar’s retirement package, set up in 1974, calls for a lump-sum, after- tax payment of $938,000, an annual allotment of $309,000 for the rest of his life and $700,000 in low-interest mortgages to be repaid by the school.
After leaving the presidency, Posvar was to have use of an office and staff, as well as a car and chauffeur.
The package was approved by the compensation committee of the board of trustees but apparently never was presented to the full board at a public meeting, said chairman John C. Marous.
Pitt general counsel Lewis Popper said some provisions might be void if they were approved at meetings that violated the state’s open meetings law.
A survey by the College and University Personnel Association indicated that Posvar’s $285,000 salary ranks him in the top 25 percent of presidents of four-year research universities.
The survey also found that the average pension for university presidents amounts to 50 percent of their salary at retirement. Twenty-five percent of presidents received pensions amounting to 70 percent or more of their final salary.
Posvar defended his retirement package by equating it with benefits given to CEOs. He said he could have made more money in the private sector but chose education because he enjoyed the work.
The state House Appropriations Committee was stunned by the retirement package and recommended the school not receive the 2.5 percent increase being given other state-supported universities in their subsidies this year.
Committee chairman Dwight Evans said Pitt officials had lied to lawmakers about Posvar’s compensation.
″We didn’t think we should reward Pitt for misleading us,″ he said.
The university, with 34,000 students at five campuses, received $136 million from the state in 1990-91 and is asking for $159 million for 1991-92.
Pitt’s finances are not open to the state, but a measure before the Senate would change that. The House approved a bill that would make Pitt and other state-supported schools account for money allocated by the Legislature.
State Auditor General Barbara Hafer has announced a review of Pitt spending, the first ever of a state-supported school. And the university hired a law firm to review Posvar’s retirement package and report to the trustees.
Meanwhile, Posvar has loosened his grip on his benefits. He said he would repay the $700,000 in loans, and he expressed ″sincere apologies and profound regret″ to Evans for providing legislators with incomplete information.
″Our credibility has been damaged. I hope ... to take the first step toward restoration of that credibility,″ Posvar said in a statement.
Posvar’s successor, University of North Carolina provost John Dennis O’Connor, said he plans to visit legislators shortly after assuming office Aug. 1 ″to let them know that a new administration is taking over.″
″The real work here is the research, teaching and public service work of this institution,″ he said, ″and I want to be sure that work goes forward.″