Another item that will be voted on by the Arizona Board of Regents next week. His contract expires on September 30, 2022 and his extension to February 11, 2026 is the maximum he individual can receive.
ASU will increase his annual salary of $800,000 to $950,000. The document also shows a proposal for a $500,000 bonus at the completion of the extension, as well as a $600,000 on the last day of each year during this five-year contract term.
All terms in Anderson’s contract previously approved by the board will remain unchanged except as follows: o ASU proposes to extend the term of Anderson’s contract from September 30, 2022 through February 11, 2026. o Anderson’s current salary is $800,000. Anderson’s annual salary may be increased on July 1 of each year by an amount determined by the ASU Board of Regents Meeting February 10-12, 2021 Item #6 EXECUTIVE SUMMARY Page 3 of 5 President in the President’s sole discretion to the extent permitted by Board policy. ASU proposes to increase Anderson’s annual salary to $950,000.
o Under Anderson’s current contract, the total bonus payout for any given contract year is capped at 100% of Anderson’s annual salary. ASU proposes to remove the cap on bonuses.
o ASU proposes to pay Anderson a bonus of $500,000 (grossed up to cover taxes on such bonus payment) upon execution by Anderson of this extension.
o Under Anderson’s current contract, if Anderson terminates the contract at any time during its term, he shall, at the discretion of the ASU President, pay liquidated damages to ASU of up to $1 million. ASU proposes to remove the obligation to pay liquidated damages to ASU in the event of termination of the contract by Anderson. o Under Anderson’s current contract, if ASU terminates the contract without cause, ASU is obligated to pay Anderson as liquidated damages an amount equal to two times Anderson’s annual base salary. The liquidated damages are reduced by the amount of compensation Anderson obtains from other employment during the remaining term of the contract up to a maximum reduction of 50% of the liquidated damages otherwise owed. ASU proposes to amend Anderson’s contract to remove the obligation of Anderson to mitigate ASU’s obligation to pay liquidated damages to Anderson in the event of termination of the contract without cause. In addition, under the contract, 35% of the liquidated damages are payable in a lump sum payment and the remaining 65% is payable in equal bi-weekly payments thereafter. Based on tax law changes, ASU proposes to amend Anderson’s contract to change the initial lump sum payment to 40% and the remaining 60% to be paid in equal subsequent monthly installments thereafter.
o Anderson will be credited with a retention incentive of $600,000 on the last day of each year during the 5-year contract term if he is employed on that date. The amounts credited on behalf of Anderson will not be paid to him until the last day of the 5-year term of the contract; provided however, that Anderson will receive an amount sufficient to pay taxes attributable to the annual vesting amount. If Anderson’s contract is terminated for any reason before the expiration date of the contract, Anderson will receive only the amount that has been credited to him up to the point of termination and he will not be credited with any additional retention incentives; provided however, if ASU terminates Anderson’s contract without cause or Anderson terminates for good reason (such as a demotion), then Anderson will immediately vest and be paid the entire remaining retention incentive (a total of $3 million plus the earnings thereon). Board of Regents Meeting February 10-12, 2021 Item #6
ASU will increase his annual salary of $800,000 to $950,000. The document also shows a proposal for a $500,000 bonus at the completion of the extension, as well as a $600,000 on the last day of each year during this five-year contract term.
All terms in Anderson’s contract previously approved by the board will remain unchanged except as follows: o ASU proposes to extend the term of Anderson’s contract from September 30, 2022 through February 11, 2026. o Anderson’s current salary is $800,000. Anderson’s annual salary may be increased on July 1 of each year by an amount determined by the ASU Board of Regents Meeting February 10-12, 2021 Item #6 EXECUTIVE SUMMARY Page 3 of 5 President in the President’s sole discretion to the extent permitted by Board policy. ASU proposes to increase Anderson’s annual salary to $950,000.
o Under Anderson’s current contract, the total bonus payout for any given contract year is capped at 100% of Anderson’s annual salary. ASU proposes to remove the cap on bonuses.
o ASU proposes to pay Anderson a bonus of $500,000 (grossed up to cover taxes on such bonus payment) upon execution by Anderson of this extension.
o Under Anderson’s current contract, if Anderson terminates the contract at any time during its term, he shall, at the discretion of the ASU President, pay liquidated damages to ASU of up to $1 million. ASU proposes to remove the obligation to pay liquidated damages to ASU in the event of termination of the contract by Anderson. o Under Anderson’s current contract, if ASU terminates the contract without cause, ASU is obligated to pay Anderson as liquidated damages an amount equal to two times Anderson’s annual base salary. The liquidated damages are reduced by the amount of compensation Anderson obtains from other employment during the remaining term of the contract up to a maximum reduction of 50% of the liquidated damages otherwise owed. ASU proposes to amend Anderson’s contract to remove the obligation of Anderson to mitigate ASU’s obligation to pay liquidated damages to Anderson in the event of termination of the contract without cause. In addition, under the contract, 35% of the liquidated damages are payable in a lump sum payment and the remaining 65% is payable in equal bi-weekly payments thereafter. Based on tax law changes, ASU proposes to amend Anderson’s contract to change the initial lump sum payment to 40% and the remaining 60% to be paid in equal subsequent monthly installments thereafter.
o Anderson will be credited with a retention incentive of $600,000 on the last day of each year during the 5-year contract term if he is employed on that date. The amounts credited on behalf of Anderson will not be paid to him until the last day of the 5-year term of the contract; provided however, that Anderson will receive an amount sufficient to pay taxes attributable to the annual vesting amount. If Anderson’s contract is terminated for any reason before the expiration date of the contract, Anderson will receive only the amount that has been credited to him up to the point of termination and he will not be credited with any additional retention incentives; provided however, if ASU terminates Anderson’s contract without cause or Anderson terminates for good reason (such as a demotion), then Anderson will immediately vest and be paid the entire remaining retention incentive (a total of $3 million plus the earnings thereon). Board of Regents Meeting February 10-12, 2021 Item #6
