STRS FLASHBACK - 7 Years Ago....'Well written contracts are hard to break!'

From John Curry, June 30, 2010

Cmon' Joe, give US a break!

John

If the STRS board fired Dyer tomorrow, he would walk away with a $533,620 check. Unless the board can prove “malfeasance, misfeasance or nonfeasance,” Dyer gets paid for the rest of his 61/2 -year contract, which ends June 30, 2005.

Joseph Endry, the only member of the board who is elected to represent retirees, wrote back, “Well-written personal contracts are very expensive to break. Be patient.”

STRS bound by costly contract

Canton Repository, June 29, 2003
By PAUL E. KOSTYU Copley Columbus Bureau chief

COLUMBUS -- Demanding that Herbert L. Dyer resign as executive director of the State Teachers Retirement System is one thing. Paying for it is another.

Herb Dyer

If the STRS board fired Dyer tomorrow, he would walk away with a $533,620 check. Unless the board can prove “malfeasance, misfeasance or nonfeasance,” Dyer gets paid for the rest of his 61/2 -year contract, which ends June 30, 2005.

If he resigns, he gets at least $133,405 because he must give STRS a six-month notice. That does not include pay for any unused sick or vacation time.

His contract gives him an incentive for awarding the STRS investment staff high bonuses regardless of how its investment portfolio does — the more bonuses they get, the more he gets.

Dyer has been under fire for three weeks for directing a pension fund that paid $15 million in performance bonuses and for artwork purchases and travel over three years. That was paid while the system’s investments plummeted by $12.3 billion and health-care contributions by retirees jumped significantly.

Privately, people in and out of the retirement fund are predicting Dyer will go, either on his own or because he will be forced out. One person said Dyer seems “more dejected” with “a different demeanor” than he normally projects.

But those who work with him say he remains in charge, goes about the business of the fund and has not talked about stepping down.

The chairwoman of the board, Deborah Scott of Cincinnati, has repeatedly and succinctly said, “Mr. Dyer is still the executive director.”

Marilyn Gibbs, a retired Plain Local Schools teacher, sent an e-mail June 12 to several people, including four members of the retirement system’s board. She asked, “I wonder if it’s time for someone to ask Mr. Dyer to resign.”

One board member responded.

Joseph Endry, the only member of the board who is elected to represent retirees, wrote back, “Well-written personal contracts are very expensive to break. Be patient.”

Asked to explain his message, Endry said, “It’s not that easy to break contracts. If Mr. Dyer is guilty of anything, it’s doing what the board wants him to do. He didn’t build this building.”

Among the criticisms of the retirement system is the spending on its posh, nearly $95 million headquarters in Columbus.

Dyer joined the teachers retirement system Jan. 1, 1993. He got a new contract in February 1997, and his current contract began Jan. 1, 1999. It was amended in April 2002.

Dyer’s contract calls for his pay to be adjusted annually based on the Consumer Price Index of the previous year or 3.5 percent, whichever is higher. The index has not been above 3.5 percent since 1991. Computations of Dyer’s base salary, however, show that his raises were actually above the 3.5 percent limit set by the contract.

In 2001, his base salary was $236,000 and rose to $256,260 in 2002, a $20,260 or 8.6 percent increase, according to STRS documents. It went up again this year to $266,810, which is a $10,550 or 4.1 percent increase.

Dyer also has received annual bonuses for meeting performance goals. His bonus is based on the weighted average of bonuses given to the STRS investment department multiplied by a percentage obtained from his annual evaluation.

In other words, the higher the bonuses paid to the STRS investment staff — whether the portfolio did well or not — the higher Dyer’s bonus.

For example, in 2002 the 110-member investment staff received $3.75 million in incentive bonuses for its work in 2001. The average bonus was $34,100. Dyer got a $41,052 bonus or 120.39 percent times the investment staff average.