Wednesday, October 26, 2005
We previously blogged the sordid tale of Benjamin Ladner, forced out as President of American University after he came under fire for his lavish spending habits and for failing to pay income tax on a variety of perks that would make the most piggish corporate executive blushlavish spending (see here, here, here, here, and here). Inside Higher Ed reports on the multi-million dollar severage package the board gave to Mr. Ladner to walk out the door:
For the last two weeks, Ladner and board members have negotiated the financial terms of his departure, with faculty members and students expressing outrage over reports that he would receive a multi-million dollar settlement. He did receive such a settlement, but American University officials maintained that most of the money was already earned in deferred compensation plans and that there was nothing that the board could do now. In a statement outlining the agreement, the board said that Ladner has earned an insurance policy worth $1 million and two trusts with a total value of $1.75 million. On top of that, the board agreed to pay Ladner $950,000 to leave the university — both as president and professor. However, in addition to deducting taxes on that $950,000, American will also deduct $125,000 for expenses for which the university believes it should be reimbursed, and the taxes on $398,000 in income that the university now believes Ladner should have declared earlier because of the value of all of the benefits he received as president.