Supersized Buyouts for School Chiefs Scrutinized

By Christina A. Samuels

Ed Week

Arlene Ackerman’s $905,000 settlement with the Philadelphia district grabbed headlines, but she isn’t the only Pennsylvania superintendent who has been shown the door in recent months with a generous settlement in hand.

According to media reports, William Hall, who led the 3,050-student Gettysburg district, left in February with $542,000. That included two years of salary and forgiving the mortgage on his house, which he had bought from the district’s vocational education program. In August, Gerald Zahorchak, Pennsylvania’s former secretary of education, was bought out a year into his five-year contract to lead the 17,700-student Allentown district. He will be paid a year’s salary of $195,000 and a $55,000 lump sum.

The board of the 11,750-student Central Dauphin district near Harrisburg didn’t fire Superintendent Luis Gonzalez after voting not to renew his contract in August. But after the vote, he was moved to a remote office to conduct “special projects” and retain his $150,000 yearly salary, while a deputy handles day-to-day operations in the district.

Pennsylvania isn’t alone in offering big buyout packages to school superintendents. The Dallas Morning News reported in August that a total of more than $7.7 million had been given in severance pay to Texas superintendents since 2005. Four years ago, school board members in Little Rock, Ark., paid $635,000 in salary, legal fees, and other benefits when they decided to fire then-superintendent Roy Brooks.

Superintendent Buyouts

A Nationwide Sampling

SOURCE: Education Week

These agreements irk lawmakers and community members, who see them as a waste of taxpayer dollars, especially now as districts across the country grapple with painful, recession-era budget cuts. Philadelphia, for example, has had to close a budget deficit of $630 million.

“Quite simply, they’re excessive,” said Jack Wagner, the Pennsylvania state auditor general, who says he plans to audit the Philadelphia buyout offer and others given to school leaders in his state. “I don’t know why superintendents and assistant superintendents should have this elite status in terms of public employees,” he said.

‘Live and Die’ by Contract

But those who work with superintendents say that secure contracts, and sometimes big money, is needed to lure top leaders to an often-thankless job running a multi-million dollar organization. And, with a school leader’s tenure able to be cut short anytime by disaffected board members, the contract serves as valuable economic protection, they said.

Bruce Hunter, the associate executive director for the Arlington, Va.-based American Association of School Administrators, said that some settlements have been “egregious,” but that contract law protects everyone, including school leaders. “Superintendents live and die with their contract,” he said, adding that it’s hard to blame superintendents for taking high salaries.

“If someone has a winning record, you pay more for them,” he said.

One reason for high superintendent buyouts is escalating pay for school leaders. The Alexandria, Va.-based Educational Research Service, which has tracked school administrator pay for nearly 40 years, reported that the average salary for a superintendent was $161,992 in 2010-11, up from $118,496 in 2000-01. There’s wide variation within that group, though: superintendents of districts between 300 to 2,500 students earn an average salary of $119,613, while superintendents of districts with 25,000 or more students earn an average of $226,651.

The Council of the Great City Schools, a coalition of the nation’s 66 largest school districts, said in a 2010 report that 39 percent of big-city superintendents reported that their contracts included performance bonuses, and the average benefits package was valued at about $141,000. When taking into account salary, benefits, and accrued vacation time, the cost of contract buyouts can quickly rise.

In Oregon, the state passed a law in 2007 prohibiting districts from entering into contracts that obligate the district to compensate school administrators for work that was not performed. The law affected all contracts created from that point forward. Legislators said it would eliminate plush buyouts, like one where an Oregon administrator was allowed to buy his district-issued luxury SUV for $7,900 when it was valued at $26,000.

Colin Cameron, the director of professional development for the Confederation of Oregon School Administrators, in Salem, said the law doesn’t appear to have affected the ability of the state to fill administrative positions. However, the negative publicity surrounding the buyouts has prompted state school boards to try to sign superintendents to shorter-term contracts of one or two years.

Limiting Buyouts

The boards “are decreasing their liability,” said Mr. Cameron, who advocates for superintendents to get three-year, renewable contracts. “They’re not ever going to be faced with a situation where they’re going to be asked for a buyout.”

Oregon has also turned over about half of its approximately 200 superintendents in the past four years, the result of a wave of retirements, Mr. Cameron said. The influx of school leaders that are new to the position allows school boards to play hardball, he said. “They can say, you haven’t proven yourself,” he said.

But, he said that school leaders should be offered longer terms if they’re expected to potentially uproot their families and immerse themselves in their work.

The Oregon provision doesn’t appear to have had the effect lawmakers wanted. In 2008, just a year after the provision was signed into law, two districts in the state reached six-figure settlement agreements with their top administrators. Vicki L. Walker, a former Democratic state senator from Eugene who sponsored the legislation, conducted a hearing on those buyouts that eventually concluded the agreements were legal.

As reported in the Lebanon-Express newspaper, “I don’t think we accomplished a whole hell of a lot with [the bill],” Ms. Walker said.

The shorter-term contracts pushed by ....

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