The agency's board calls for CEO Gloria Pace King's resignation amid
outcry over her compensation.
By Eric Frazier and Kerry Hall
efraz...@charlotteobserver.com
Posted: Wednesday, Aug. 27, 2008

 For months, the United Way of Central Carolinas board said Gloria
Pace King was worth every penny of her controversial $1.2 million pay
package.

Tuesday, 37 of those board members unanimously called on their
longtime CEO to resign or be fired.

King's fall was breathtakingly quick, but not clean.

Critical questions remain. How the board handles them will affect 91
nonprofit agencies and the thousands in need that they serve.

Can the board regain enough public trust to rescue its ongoing
fundraising campaign?

How will it settle accounts with King, even as it pays her interim
replacement $20,000 a month?

And the most fundamental question of all: How did a group that
includes some of the region's savviest corporate leaders allow all of
this to happen?

At its hastily called Tuesday press conference, the board offered no
specific explanation about what had gone wrong and why King has been
asked to leave.

“This was not an error made by a single individual at a single point
in time, but a collective breakdown at many levels over a period of
time,” board chairman Graham Denton said.

“We owe the community a sincere apology.”

King's attorney, Bill Diehl, listened to Denton's comments from the
back of the room. He contends his client is owed an apology and more –
at least $1 million remaining on a retirement contract the board
agreed to in 2006.

Denton said the board has a legal right to cancel the remaining
payments, and will do so.

“She is not happy with this,” said Diehl. “She worked there for 14
years and did a great job. Everybody agrees on that … It's hard to
figure where (the board) is coming from.”

Denton said the board authorized firing King by Sept. 30 if she
doesn't resign.

He said the board believes it needs a new CEO to restore public
confidence.

Mac Everett, a retired Wachovia Corp. executive, will step in as
interim president to lead the organization through its campaign drive.

He declined to discuss the King situation, commenting instead on the
difficulty of raising money in a down economy. Last year, the United
Way drive raised an unprecedented $43.5 million.

“I'm an optimist,” he said, “and what's done is done. We can't change
the economy today. We'll have to deal with it and do the best we can.”

Everett will be paid $20,000 a month for up to four months. Denton
said the board plans to seek private donations to pay him and King. If
the money isn't raised, he said, the board will trim expenses in the
agency's budget to avoid cutting aid to nonprofits. The dispute with
King centers on a decision by the board's executive committee to add
$822,000 to her retirement benefits in 2007. That was more than seven
times the $108,000 paid the year before. The board has said the
increase was to make up for short payments in previous years.

But Denton called the decision a mistake. He said six past and future
board presidents studied the issue the past two months. They concluded
that, while such retirement plans aren't unusual for top United Way
executives, Charlotte residents found it excessive.

An Observer analysis of tax records shows that King's combined salary
and benefits are the highest among 31 United Way organizations
nationwide. Her salary ranks fourth; her bonus is the biggest among a
sampling of 14 agencies of similar or larger size. Even at $108,000,
her retirement benefits were the highest found among the 31 groups.

The board will pay the 21/3 years remaining on the three-year
employment contract King signed in January. It pays her $290,000
annually, but allows that amount to be cut if she gets another job.
Denton said he has talked with business leaders about finding King a
new post. If nothing pans out, he added, the board will pay off her
contract in full – even if it winds up having to pay a permanent
replacement simultaneously.

The United Way will not pay what's left on King's retirement plan:
$450,000 to $500,000 a year through 2010. Denton and Russ Sizemore,
the board's attorney, said King's retirement contract lets the board
cancel benefits if her employment ends.

Diehl disagrees. He said the board approved King's salary and benefits
but is backtracking because of negative publicity. He said he's been
seeking a solution, but that the board opted instead for what he
called “a grandstand play” at the press conference.

“That's not something I can do anything about,” he said. “It might be
something I can do something about later.”

A search committee will be appointed within weeks to find King's
replacement, Denton said. He also said prominent Charlotte lawyer
Robert Sink will lead a task force charged with finding out what went
wrong and how to keep it from happening again.

Denton and others said the board likely will be revamped as a result
of the inquiry.

Sink told the Observer he plans to ask seven or more people to join
his group within the next 10 days. He expects to present findings to
the board and the public by the end of the year.

In a statement Tuesday, United Way of America called the task force's
creation “important and necessary.”

“United Way of America believes local United Way leaders have a duty
of transparency and accountability to their stakeholders: donors,
agencies, corporate partners and the United Way system.”

Critics say a lack of openness and accountability have worsened the
King situation.

Asked whether minutes from board meetings cast light on King's
upgraded retirement, Denton said the minutes were unclear. Asked for
copies of the minutes, he and Sizemore said such documents are
confidential and would be shared with Sink's panel, but not the
public.

When reporters asked for copies of the employment and retirement plan
contracts, they said those were confidential as well.

Incoming board chair Carlos Evans said he'll push to make both board
meetings and the minutes public when his term starts in 2009. The
Wachovia executive said the full board never voted on King's pay, only
on the agency's multi-million dollar budget.

But, “as board members, we should all take responsibility (for CEO
pay),” he said. “I take responsibility for not asking more questions.”