It's no secret that former University President James Duderstadt and the Board of Regents operated under strained relations.
But regents say Duderstadt should not have kept secret the compensation agreements he made with top University officials before he stepped down as president.
Employment letters outlining the agreements - including yearlong leaves of absence at full salary and "administrative supplements" after returning to the faculty - were obtained yesterday through a Freedom of Information Act request.
While regents say they should have known about the agreements and faculty members call the benefits "overly generous," Duderstadt says there's "nothing unusual" about the arrangements.
"I have a number of people who reported to me. There has to be some kind of agreements about what their role is," Duderstadt said. "These are generally confidential."
Regents say details of the agreements should not have been withheld from the board.
"I think it's an abuse of the president's power to enter into compensation deals that the board is not aware of," Regent Andrea Fischer Newman (R-Ann Arbor) said yesterday, following a closed session of the board's monthly meeting.
The executive officers who made arrangements with Duderstadt provide a virtual who's who list at the University, and include: interim President Homer Neal, Vice President for University Relations Walter Harrison, Chief Financial Officer Farris Womack, Provost J. Bernard Machen and Vice President for Development Thomas Kinnear.
Duderstadt's first letter was sent to Womack on Oct. 12, 1995, about three weeks after Duderstadt announced he would resign. The last letter was dated June 25 to Deputy to the President John Cosovich. Duderstadt completed his presidency five days later, on June 30.
The benefits described in Duderstadt's letters will be financed from "general funds," he said. This includes money from tuition and taxes.
Prof. Thomas Dunn, who chairs the faculty's governing body, called the arrangements "generous," and said the University should be more concerned about cost-control.
"All those things use up money which could go to other things," Dunn said.
Regents said yesterday they need to develop a compensation policy for future presidents to follow. Newman said the board plans to discuss whether Duderstadt's actions were legal.
"There is some question as to the legality of all the pieces of the agreements," Newman said. "My intent would be to discuss it with (General Counsel Elsa Cole) and see what her response is."
Duderstadt said that legally the board "delegates those authorities to the executive officers, deans, chairs, the president." He added that negotiations with administrators are common and, during his eight-year presidency, he had "several such negotiations."
"The only strange thing about it is that one of regents chose to release confidential information," Duderstadt said. "Why the regents decided to share confidential materials provided by the president we will never know."
Ongoing tensions between the president and the board may discourage candidates for the University presidency, administrators and members of the board said.
Harrison said the issue of the leadership roles of president and regents in this type of situation will most likely come up in discussion during interviews with candidates.
"If the hands of the new president are tied, that would hurt it (the search)," Duderstadt said.
Regent Lawrence Deitch (D-Bloomfield Hills) said the salary bonuses could cause concern among students and their parents.
"I think it could be perceived negatively," Deitch said. "That is not to say that I believe our very talented officers shouldn't be paid properly."
Duderstadt, who said the University has offered similar agreements in the past, said he wanted to make sure the executive officer team remained in place during the transition to the next president.
Former President Robben Fleming said he did not offer any additional deals to administrators when he stepped down from the presidency in 1979.
"There wasn't really any reason to," Fleming said.
Fleming said that when administrators retire, they sometimes receive time off.
"There are often arrangements made when somebody retires to give them a year off with pay, because they don't get sabbaticals the way faculty members do," Fleming said.
Donna Zischke, a policy analyst in the office of the provost at Michigan State University, said MSU does not offer this kind of deal to departing executives.
"There would be no provisions," Zischke said. "That would not be the norm."
Vice President for University Relations Walter Harrison said Duderstadt contacted him last November to discuss possible benefits. The uncertain atmosphere at the University made the agreement appealing, Harrison said.
"The fall was an unsettling time. The president had resigned; there was a lot of public and private friction between the president and the Board of Regents," Harrison said. "He said I should think about what I might want in terms of security."
Duderstadt suggested a one-year "administrative leave" at full pay if Harrison vacates the position to serve elsewhere in the University. It is common for a new president to appoint a new executive team.
"For me, it was simply some security during a time when things were uncertain," Harrison said.
The only two executive officers who did not receive letters about additional compensation are Vice President for Student Affairs Maureen Hartford and Roberta Palmer, secretary to the University.
"They have long-term appointments," Duderstadt said. "Dr. Hartford has an appointment for five more years and Ms. Palmer had just been appointed."
Palmer, the newest member of the executive officer team, was appointed to a five-year term on July 1, 1995. Hartford's contract was renewed for five more years at last December's regents' meeting.
Duderstadt also said that retirement furloughs and administrative leaves apply more to administrators who will return to the faculty. Neither Hartford nor Palmer have a home-base as a faculty member.
Dunn said that at the time of the deals, administrators were "twisting slowly in the wind," borrowing a term used to describe the anxiety advisers to President Nixon felt during the transition to the Ford administration.
Duderstadt said many executive officials have been approached for top positions at other national universities.
"Walt Harrison was getting an offer a week to go elsewhere. For Farris Womack, hardly a month went by. Homer Neal has been approached about presidencies on a monthly basis," Duderstadt said.
Harrison said that in the last two months, he has been contacted about vice presidency positions at four universities listed in the U.S. News and World Report's top 25 ranking.
Duderstadt said it is the president's job to work out attractive contract negotiations to keep administrators at the University.
"I don't think most (governing) boards ... want to get into that level of detail," Duderstadt said.
Newman said it was inappropriate for Duderstadt to "enter into letter agreements" after he indicated his desire to resign.
"I think he just did what he wanted to do," Newman said.
Neal, who received a letter from Duderstadt on Dec. 15, 1995, said it was within Duderstadt's right to make these arrangements. About a month later, Neal was named interim president.
"The president of the University is the president of the University until the day his appointment expires," Neal said.
The salary deals could have implications reaching to Lansing.
John Truscott, spokesperson for Gov. John Engler, said the lasting effects the deals have on state funding depend on the regents' next action.
"If the board acts quickly and takes positive action, I think that would be viewed favorably," Truscott said.
Truscott called the University "one of (the state's) crown jewels," but said some members of the state legislature may look at the most recent developments critically.
"Clearly there are those in the legislature that are maybe philosophically opposed to some of the actions in the University," Truscott said.
Deitch said the regents handle University finances responsibly, and that this development is not representative of an overall approach.
"We have to be circumspect and modest in what we do," Deitch said.
Almost a year since Duderstadt announced his resignation on Sept. 28, the tensions still linger as the board is poised to name his successor.
"The strained relationship between the regents and the president made all relations difficult," Harrison said.