The $2 Million Year

Over course of 11 years, AGB president Richard Legon earned nearly $1.4 million for a lump-sum payout, nearly tripling his salary and benefits in 2016 -- to just under $2 million.

April 27, 2018
 
Richard Legon

It took more than a decade to arrive, but the leader of a midsize education nonprofit in 2016 earned a lump sum totaling almost $1.4 million, bringing his total compensation that year to nearly $2 million.

The one-time payout to Richard Legon, president of the Association of Governing Boards of Universities and Colleges, nearly tripled his salary and benefits from the previous year, to $1,972,705. Legon has led AGB since 2006 and has no immediate plans to step down.

Many nonprofit education groups try to offer incentives for leaders to stay in their jobs -- tax records show that in 2016, the Council of Independent Colleges found a more modest way to reward its president, with nearly half a million dollars paid out in addition to his salary and other benefits.

In a statement, AGB said the jump in Legon’s salary was mostly due to a single $1,396,848 payout that had been accruing value since he accepted the presidency more than a decade earlier. The benefit, as well as Legon’s other compensation, are “consistent with fair market value as verified by an independent compensation consultant and reviewed and approved by the AGB Board of Directors,” the group said in a statement.

The lump sum became vested in 2016, but it had been increasing in value for 11 years, which resulted in a “substantially higher total compensation amount” reportable for the 2016 tax year, AGB said.

AGB’s board and its consultants “are confident that these amounts represent fair and reasonable compensation,” the organization said. It also noted that Legon's 2016 base salary was actually lower than it was in 2015 -- $417,991, down from $424,313. Tax records show its gross receipts were also lower, by about $5.3 million.

Also in 2016, CIC awarded President Richard Ekman a $491,431 payout, raising his compensation that year to more than $1.1 million. The organization said the sum was a "required payout of a multiyear deferred compensation plan" for Ekman, who came to CIC in 2000.

In 2016, his compensation equaled 6.5 percent of CIC’s gross receipts. Legon’s 2016 payout put his total compensation at 16 percent of AGB’s gross receipts.

That year, leaders of 12 of the largest D.C. education nonprofits generally earned in the range of 2 to 9 percent of gross receipts. In 2015, Legon’s total compensation was actually just 3.8 percent of AGB’s revenue, putting it squarely within the range of comparable organizations.

Raymond Cotton, a D.C. lawyer who represents colleges and presidents on employment agreements for senior leaders, said the payout to CIC’s Ekman made sense, since before he arrived, CIC was “an organization that was dying on the vine -- he not only brought it back to life, it’s flourishing.”

He also noted that CIC’s annual meetings are “the best we have in higher education, as measured by the number of college presidents who attend. They’re voting with their feet.”

Cotton added, “The presidents tell me that the CIC meetings are very valuable to them -- it really serves a necessary purpose in their professional life.”

In fairness, he said, AGB “performs a necessary function in higher education, because of its focus on helping trustees be better trustees.” But the organization’s for-profit consulting efforts “distract from the main purpose,” he said.

AGB spokesman Tim McDonough said that while Legon manages two subsidiaries -- AGB Strategies and AGB Search -- he receives no compensation from either one.

While Legon’s $1.4 million was a one-time payout, his total 2016 compensation put him, at least temporarily, in the league of leaders at much larger organizations. That year, he earned more than Educational Testing Service president Walter B. MacDonald, who in 2016 earned $1,254,832.

Legon’s compensation that year even rivaled that of NCAA president Mark Emmert -- $1,944,729 in 2016.

AGB wouldn’t provide more detailed information about the 2016 payout, but Judith Wilde, COO of the Schar School of Policy and Government at George Mason University, said contracts like Legon’s typically run for just three to five years, so she suspects that after five years he may have asked that the sum be reinvested, “or that other arrangements were made for him.”

But, she added, “It seems like a large number for a small organization.”

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