United Way apologizes for pay gaffe

Expressing concern for how its annual fundraising campaign might be affected, local United Way officials apologized Wednesday for not shifting enough money to the president's retirement account for years.

When it was disclosed last week that the board paid $822,000 to Gloria Pace King's retirement fund to correct the oversight, some donors reacted with outrage.

On Wednesday, Ned Curran told the Observer that he and other volunteer board members accept responsibility for the public outcry, and that the controversy could have been avoided if the board had corrected the situation earlier.

“We understand we have a public trust with those in the community who are contributors and those who are potential contributors,” said Curran, speaking for the executive committee of the agency's board. “We regret and apologize to the community for the manner in which we handled her supplemental retirement plan.”

King's retirement package had been underfunded and underreported by the agency for about seven years, said Curran, a former board chairman of the United Way of Central Carolinas. He said a previous board committed the oversight around 2000 or 2001. No one from the United Way has been able to explain fully how that happened.

United Way officials have declined repeated requests for an interview with King. Curran, president and CEO of Bissell Companies, said the board approves her pay package, so the board wants to address questions about it.

He said the board is concerned about the impact on the United Way's annual fundraising drive, initial parts of which are already under way.

The agency has enlisted the help of Luquire George Andrews, a firm that bills itself as Charlotte's largest advertising and public relations agency. CEO Steve Luquire accompanied Curran during Wednesday's interview. Luquire said his agency hasn't discussed its fees yet with the United Way.

Curran defended King, saying that she has created one of the country's most effective and efficient United Way operations during her 14-year tenure.

He added that she is not overpaid compared to other nonprofit executives. The board set her compensation after studying what other nonprofit executives locally and nationally are paid.

“We understand that some people are never going to be satisfied with the dollar amount,” Curran said. “But she is of national prominence at the top of her profession. People at that level are paid well. And they should be.”

He pointed to United Way of America statistics showing the Charlotte region's agency raises more money annually than all but 17 of the more than 1,200 United Ways in the country. It ranked fifth in per capita giving, according to national statistics, and No. 2 in the number of donors giving at least $10,000.

“The board that hired her 14 years ago nailed it,” he said. “She's done a good job.”

He also defended her salary, which is $275,000 not counting retirement benefits, expense accounts or bonuses. United Way of America figures show the median CEO salary at the 31 biggest agencies is about $243,000.

However, it isn't clear how her total pay – including retirement, bonuses and expense accounts – compares. The United Way's national CEO pay survey doesn't include those numbers, and other studies rely on tax filings where compensation is defined differently from agency to agency.

The United Way of Central Carolinas' board knew starting around 2000 or 2001 that it would need to increase its contribution for King's retirement, but didn't act on it, current board chairman Graham Denton told the Observer last week. He couldn't explain why, other than to say, “It's obviously a nonprofit organization. It may not have the depth of understanding of these topics.”

A few years later, the United Way board hired attorneys and financial experts to help it create a new retirement plan specifically for King. In hindsight, that process took too long, Denton said.

Federal tax law limits how much King can draw from a defined-benefit plan. To get around that cap, many companies offer supplemental retirement plans for high-earning executives.

The board increased King's benefit to ensure that when she retires she would be able to draw 60 percent of her salary annually – the same amount other retiring employees can receive. Officials made the $822,506 payment to bring her account up to that standard.

The United Way will contribute between $450,000 and $500,000 each year for her retirement for the next three years.

Leaders of some nonprofit organizations that depend on United Way money hope anger over King's pay package doesn't hurt this fall's annual fundraising campaign.

The United Way raised $45.3 million last year. It supports 98 organizations in Mecklenburg, Anson, Cabarrus and Union counties, as well as the Mooresville-Lake Norman area. United Family Services, a social services agency in Charlotte, gets $1.7 million a year – more than a quarter of its revenues – from the United Way.

Cutting that money would likely mean eliminating staffers who help counsel domestic violence victims and those struggling with mortgage foreclosures and credit problems, said Mark Pierman, CEO of United Family Services.

“I hope people can see past that,” he said, referring to the controversy over King's pay. “I hope people can realize that if the United Way campaign does poorly, then the agencies the United Way helps will have less capacity to serve people in the community who need it the most.”