The most recent development in the prominent University of Louisville Foundation controversy is the release of an independent analysis suggesting that its senior executive leadership was “excessively compensated” between 2010 and 2016.

The executives were the former Foundation president, his former Chief of Staff, a former University provost, and two former chief financial officers. The analysis, performed by the Korn Ferry Hay Group, was made public at a May 29 Foundation board meeting in which the board voted to amend prior Internal Revenue Service (IRS) tax filings to correct statements that reported the executives’ compensation as “reasonable.” The total amount of compensation determined to be excessive (i.e., the excess benefit) was $3.9 million in the aggregate.

Each of the executives, with the exception of the former provost, were named defendants in civil litigation filed by the University of Louisville and by the Foundation on April 25, seeking damages for what they alleged was a series of unauthorized and illegal actions by the Foundation and its leadership with respect to certain spending and investment practices. The “excessive compensation” analysis was prepared in connection with amended IRS reporting but also is consistent with the allegations, and the relief sought, as identified in the civil complaint.

Three aspects of the analysis are particularly noteworthy: (i) the consultant’s recommendation that the board should consider any compensation over the 50th percentile as excessive compensation; (ii) the alleged absence of any Foundation board-level compensation policies; and (iii) the suggestion that other Foundation non-officer executives (particularly those who received deferred compensation and tax gross-ups) be subject to similar review.