Now that some documentation has been released (see WBIR archive) we know more about Gloria Ray's four year contract and subsequent extension.
Here's the timeline:
• Feb. 16, 2007: Gloria Ray four year contract approved by executive committee
• Mar. 13, 2007: Gloria Ray four year contract approved by full board
• Jul. 1, 2007: Gloria Ray four year contract term begins, signed by Ray on 7/25, David Duncan on 8/8
• Oct. 7, 2008: Executive Committee authorizes David Duncan to negotiate Gloria Ray contract extension after Ray says she will retire when her current contract is up in 2011
• Oct. 13, 2008: Gloria Ray and David Duncan sign contract extension through 2014
• Dec. 9, 2008: Gloria Ray contract extension approved by executive committee
• Dec. 9, 2008: No mention of Gloria Ray contract extension at full board meeting
At yesterday's board meeting, KTSC Attorney Edward Phillips argued that the extension was not valid because the full executive committee was not involved in the negotiations as required by KTSC bylaws and state law. We are not clear if there was any discussion of the fact that the full board has apparently never voted on the extension.
Gloria Ray's lawyers could, and probably will, argue that the executive committee delegated authority to David Duncan and authorized him to negotiate the extension to her agreement. They also approved the terms. Further study of KTSC bylaws and state law would be needed to determine if this is permissible and/or whether Duncan was authorized to execute the amendment to her agreement prior to executive committee and/or full board approval. The fact that it was an amendment to an existing agreement might also muddy the waters.
KTSC's lawyer also argued that Gloria Ray could be terminated for cause according to provisions of her contract which state (among other things) "any conduct of Ray that is seriously prejudicial to the best interest of KTSC, that violates KTSC's mission, that brings KTSC into disrepute" as grounds for termination with cause. Further, her contract provides for termination without cause, which requires three months severance pay and benefits.
(The contract is very clear that three months pay for termination without cause includes incentive bonuses, but it is not clear if they are to be prorated. This could be another dispute to be sorted out by the lawyers depending on the final disposition of her retirement/termination.)
Ultimately, the KTSC board decided to accept Ray's retirement effective in two weeks, subject to negotiation of a severance agreement. If the terms are not agreeable, the KTSC board will vote on termination.
The tone of yesterday's board meeting suggested that the board was ready to terminate Ray one way or another for any valid reason they could find. In fact there was a motion on the table to terminate her for cause before a deal was reached to accept her retirement.
In my opinion, all of this is starting to stink.
There is no evidence whatsoever that Gloria Ray has done anything improper or that was "seriously prejudicial to the best interest of KTSC, that violates KTSC's mission, [or] that brings KTSC into disrepute." The complaint appears to be that she negotiated a lucrative compensation and severance package. What's she supposed to say? Don't pay me that much? Any problems with the terms of her contract land squarely in the laps of the executive committee and the board.
As far as any shock and awe at the amount of her compensation, it is spelled out in her contract and reported every year in KTSC's IRS 990 form, where anyone who was concerned about it could easily have looked.
As for whether she has been effective, no one has yet come forward with any documentation regarding the detailed calculation of payments received by KTSC and the incremental lodging taxes and economic benefits on which Gloria Ray's incentive bonuses are based. Presumably, the City and County performed such calculations as part of their due diligence regarding the amounts they paid under their contracts. The KTSC audits do not address it and appear to accept everything on face value.
How is any of that Gloria Ray's fault? There is no hard evidence that Gloria Ray has not been effective, nor much credible evidence that she has, other than the fact that the City and County have made the agreed to payments.
If the complaint is that her contract is too generous and somewhat vague regarding the definition of "projected economic benefit" and allows for bonuses related to increased lodging taxes whether KTSC had anything to do with it or not, once again this falls in the laps of the executive committee and board for not being better negotiators, and the City and the County for entering into agreements to pay KTSC according to those terms.
At this point, the only legitimate beef regarding her contract appears to be the validity of her contract extension, under which she has been working and compensated for about six months.
To the best of my knowledge (and I could be wrong), Gloria Ray is not an attorney and never has been. While she should be familiar with the KTSC bylaws and state law governing operation of a non-profit, she says she accepted at face value the assurances of David Duncan (who was effectively her boss) that he was authorized to extend her contract and that all payments were authorized and proper.
The actions of the executive committee are a little fuzzy on this point, but the minutes seem to support Ray and Duncan's interpretation depending on the exact language of KTSC bylaws and state law. There is no evidence of any sort of improper collusion or attempt to hide anything. All of it is on the record.
As for board members claiming they weren't aware of the terms of Ray's extension, many of them
are were (they all resigned yesterday) on the executive committee so they knew. The others could have a legitimate beef that it was never brought up in the full board meeting, at least according to the minutes provided.
The bottom line is that the only evidence of a problem with Gloria Ray's contract and compensation involves the negotiation and approval of the extension. It could have been an oversight by the board or it could have been a procedural error, but there is no credible evidence that it was intentionally misleading or improper.
And, it could easily be cured by the board voting to correct any such procedural errors or oversight.
As for whether she has been effective, that's a matter of opinion. In my opinion, KTSC and Gloria Ray have not been effective in promoting the Convention Center, but that's just one part of what they do and it was a bad idea in the first place given the convention market.
As for whether her contract is vague and too broadly defined with regard to incentives, well, congratulations to Ray for her negotiating skills. It might be unseemly, but there's nothing improper or illegal about it.
The only other legitimate issue is her failure to disclose her Blue Cross/Blue Shield board membership on KTSC's conflict of interest statement. Her contract clearly allows her to serve on other boards, but KTSC's bylaws are pretty specific about the disclosure and resolution of potential conflicts, and this appears to be one.
Regardless, based on her impressive resume, her past accomplishments and her performance at KTSC which has thus far been acceptable to the board, and whether you think she makes too much money or not, she should be allowed the opportunity to retire with her dignity and reputation intact. Which was all she wanted in 2008 when the KTSC executive committee convinced her to stay with lucrative retention bonuses.
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