DETROIT — The Board of Regents' firing of former University of Michigan President Mark Schlissel cost him some benefits in the exit contract he negotiated last year, when he planned to depart one year earlier than scheduled.
Experts said in October that Schlissel negotiated a new agreement that was one of the most lucrative university presidential exit contracts they had seen. The 64-year-old university executive's agreement was originally scheduled to end in June 2024, but the timeline was moved up to 2023. Both he and regents have said the decision was Schlissel's.
The contract signed Sept. 23, 2021, could have cost the university as much as $10 million over the next decade and set a new bar for payouts to an outgoing public university president, experts said then.
The exit contract required that Schlissel's "conduct and comportment shall at all times be consistent with promoting the dignity, reputation, and academic excellence of the University." The Board of Regents cited this contract stipulation as the reason for his firing after finding he displayed inappropriate conduct with an unnamed subordinate employee.
Here is what Schlissel lost and could still lose:
Pension: Schlissel was scheduled to receive three annual contributions of $300,000 into his pension plan. The first payment for the plan year of 2021 was set to be made on June 30, with the other installments to be made on the same date in 2023 and 2024.
Schlissel still gets to keep the contributions the university made to his pension prior to his termination. But he loses the majority of the $900,000 total pension perk since "no additional contributions will be made beyond the date of his termination for Cause or voluntary termination," according to the contract. Experts said the $300,000 set to be contributed to him in 2022 could be prorated, but he will lose the bulk of the contribution. The university would have helped him with an additional payment to offset a tax liability if tax law on excess pension benefits had changed.
Housing: Schlissel has been living in the campus residence on South University Avenue reserved for the president since 2014. The contract says Schlissel needs to be out of the campus residence in 30 days or less.
It is unclear if he will be forced to pay for moving expenses. "The University will pay all reasonable costs of moving out of the presidential house to a new home; provided, however, that the University shall have no obligation to pay moving expenses if the President is leaving the University either to accept full-time employment elsewhere or otherwise voluntarily relinquishing his employment with the University," according to the contract.
Pay: He earned a base salary of $927,000 as of September. The contract does not say what Schlissel will be paid after being fired for cause. During the agreement, he eventually was going to return to the faculty earning no less than half of his base salary, or $463,500. It's unclear whether he will teach.
He loses the $36,000 a year the university was planning to give him through at least July 1, 2030, "to support your activities as President Emeritus." He doesn't get a $5,000 "monthly housing allowance" stipulated under the agreement. He also would have had a personal assistant and campus parking.
Tenure: Schlissel remains a tenured faculty member in the departments of Microbiology and Immunology, Medicine, and Molecular, Cellular and Developmental biology. But it's unclear if he will return to the faculty.
He may follow the lead of former Provost Martin Philbert, who left the university two years ago amid allegations of sexual misconduct, and relinquish his tenure, or the university could start the process to strip him of tenure, said Allen Liu, a UM associate professor of mechanical engineering.
"It’s too early to say," said Liu, who chairs UM's executive arm of the university’s central faculty governance system.
It’s likely that the university and Schlissel will negotiate a confidential settlement for him to leave the university rather than go through trying to strip him of tenure, a process that could take years and end up in court, said George Mason public policy professor emeritus James Finkelstein.
"They don’t want another public scandal," Finkelstein said. "They would probably like the president to go away as quickly as possible. And they may be willing to pay for that."
But Schlissel will lose the ability to tap up to $2 million from a "Start-Up Fund" for the creation of a biological university laboratory for use after being a special adviser.
University property: The letter sent to him by the regents said he needed to return property associated with the presidency including key cards and keys, university identification cards, electronic equipment including laptops and phones. Personal belongings needed to be removed from his office. A timeline was not clear.
Sabbatical: He forfeits a chance to take a paid sabbatical or "administrative leave" — stopping normal work to study or travel.
Adviser: He was supposed to be a special adviser to the next president. That was voided by his firing. It is unclear if interim UM President Mary Sue Coleman, who led the university from 2002-14, would step into that role.
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