Kathryn LeRoy, the superintendent of Polk County Schools, is reported to be getting a severance package worth about $230,000 upon her resignation. The back story on this is detailed in numerous Ledger articles, such as this one.
Where does that figure come from?
Well, in my view, it isn’t really accurate. In reality, her severance package is “only” about $120,000, and this is probably appropriate under the circumstances.
LeRoy has an employment agreement with the School Board. The linked agreement is in draft form, but my understanding is that this was the version eventually approved by the School Board (I have not confirmed this).
The Agreement provides for what to do in the event that she is terminated, and there are two provisions, one providing for termination without cause (18.A), and one for termination with cause (18.B). A termination for a valid cause would enable the School Board to not pay her anything, but a termination without cause would require the School Board to pay her severance pay, which I will address in a moment.
Even though there is a reason why she is being forced out, this is a termination “without cause” under the agreement.
In order to terminate her for cause, the Board would have to find her guilty of “misconduct” as defined by law, and she would have the right to a due process hearing before the termination would be effective.
The Board is wise not to terminate her for cause. The investigation did not find her to be guilty of anything more than extremely poor judgment and unprofessional conduct, and cleared her of the more egregious things she was accused of. Under this scenario, meeting the definition of “cause” would have been difficult or impossible. [Edit 2/13/16: Technically the cause provision is a little looser than that, and might encompass more than simply misconduct as defined by law, but it is not well enough defined to avoid a legal fight with her over whether what she did provided just cause or not.]
In the event of a termination without cause, the employment agreement provides for severance pay of 20 weeks of additional “compensation”. Her base pay is currently $231,750.00 per year, which results in a severance payment of $89,135.
But that is not the end of the story. Her entire compensation package is worth a lot more than her base salary. The employment agreement does not explicitly say whether the 20 weeks of “compensation” she is entitled to means 20 weeks of her base salary or the value of her entire compensation package for 20 weeks. Unfortunately, I think the most logical reading is to take “compensation” to mean her entire package. Her attorneys, obviously, agree. Therefore, here are all the amounts she is getting, and explanations of why they are being paid to her:
- $89,135 – This is her 20-week severance pay as described above.
- $19,120 – This represents her attorneys’ estimated value of 20 weeks of contributions to the Florida Retirement System, another component of her compensation package under the employment agreement.
- $8,914 – This is a contribution representing 10% of her base salary for 20 weeks towards a retirement annuity. This is another portion of her compensation package that is provided for in the employment agreement in addition to the Florida Retirement System contributions.
- $2,649 – This is for payment of her health insurance premiums for 20 weeks, another component of her compensation package.
She is also getting:
- $19,520 – This is her attorney’s estimated value of her unused vacation pay, which she is clearly entitled to under the employment agreement.
- $2,463 – This is her attorney’s estimated value of her unused sick leave, which she is clearly entitled to under the employment agreement.
But these amounts do not arise out of her severance. They are benefits of employment that she is probably legally entitled to regardless of the fact that she is being forced out.
There are two more amounts included:
- $61,416.00 – In the severance agreement, this is described as “Annuity Payment… Payment equal to 10% of Superintendent’s monthly contractual salary from date of hire, June 1, 2013, through the date the Board approves this Agreement”
Evidently, and I am making an assumption here, the required contributions of 10% of base salary towards an annuity provided for in the employment agreement have not been made by the School Board at all to date. Why not? I don’t know.
One reason might be that she never designated the annuity she wanted it to be paid to. Regardless, if they have not been paying it, it’s pretty clear that they owe it. However, like the vacation and sick pay, they would owe it regardless of whether they terminated her or not. I don’t view this as severance pay.
Finally, here is the most controversial component of the plan:
- $30,118 – Reimbursement of Attorney’s Fees and Costs Incurred by Superintendent Pursuant to Paragraph 20 of Employment Agreement dated May 27, 2014.
Here’s what the employment agreement says in paragraph 20:
The Board shall defend, hold harmless and indemnify the Superintendent from any and all demands, suits, actions, legal proceedings of any nature whatsoever, or awards or judgments including compensatory and punitive damages, brought or awarded against the Superintendent in her personal, individual or official capacities, provided, however, that the demand, claim, suit, action or legal proceedings arise out of or in the course of the Superintendent acting within the course and scope of her employment as Superintendent. In addition, the Board shall pay all litigation costs, including attorney fees, expenses and other litigation or appellate costs incurred in defense of the Superintendent.
Basically, what this says is, if the Superintendent incurs any legal fees in the course of her employment arising out of her work, the School Board has to pay them. This includes, presumably, the amount her attorneys charged her to deal with the complaint filed by Mr. Rivers. Infuriating, isn’t it?
However, again, this amount is also not really part of her package, because it is arguably owed to her even if there was no termination of employment happening.
The final tally turns out to be:
- What we are paying her to go away “without cause”: $119,818
- What we are paying her that we owe her whether she were leaving or not: $83,129
- What we are begrudgingly having to pay her lawyer to clean up the mess she made: $30,118
All in all, this appears, at first glance, to be a pretty straight-forward decision: the School Board is right to simply write the check.
Here is the severance agreement.