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Committee probes presidential contracts and separation payments; board policy 305.1 governs non‑cause payouts
Summary
Committee members heard from system officials about presidential contract terms, early-retirement policy and who pays separation agreements. Officials said policy 305.1 and individual contracts guide outcomes and that institutions typically pay separation costs.
Lawmakers asked the Appropriations - Education and Environment Division for clarity on how presidential contracts, buyouts and separation agreements are handled and who pays them.
Kevin Black, appearing for the North Dakota University System office, said the system follows board policy and contract language when a president is separated. “There is in the event that, we terminate without cause, the president will receive an amount equal to 12 months the salary and benefits based on the presidential salary and benefits at the time of the the termination,” a system staff member described when reading policy language into the record.
Black and other officials told legislators that two procedural routes exist: termination for cause, which requires documented performance issues, or termination without cause, in which the board must follow the contract terms and reconcile any separation payment with board policy. The staff member who read the policy noted that a tenured president at a four‑year institution could instead exercise faculty retreat rights rather than collect a cash payment.
Representative Martinson and others pressed system officials about specific cases. Committee members were told the board reached a separation agreement with the president at Bismarck State College and that the board terminated the president without cause. “We terminate him without cause,” a system official said during the committee exchange. Officials said longstanding practice has been for the employing institution to pay separation agreements; that practice was cited in multiple examples but committee members challenged whether campuses should have greater input, particularly when the campus budget pays the cost.
Legislators identified earlier examples including a $500,000 separation figure reported in amendments and a roughly $300,000 payout tied to a retirement case at Devil’s Lake (Doug Darling), which officials described as an early-retirement decision intended to be cost‑effective compared with the campus paying a tenured faculty position. Officials emphasized that early retirement is treated as a cost‑savings tool and “is not an entitlement.”
The board has formed an executive compensation and contract review task force, led by board member D.J. Campbell, to examine contract language and options for reducing financial burdens on campuses. Officials also said nonrenewal is typically honored by letting a contract expire without additional payouts unless the contract previously included an exemption.
No formal committee action was taken; members requested additional documentation and said they expect continued oversight and possible policy-level recommendations.
