STATEMENT FROM THE
AMERICAN UNIVERSITY BOARD OF TRUSTEES
Thomas Gottschalk, Vice Chair
Dr. Benjamin Ladner, president of American University, today resigned as president and professor at the university. The Board of Trustees accepted Dr. Ladner's resignation and thanked him and Mrs. Ladner for their years of service and contributions to the success of the university. Dr. Ladner has agreed to relinquish any claim to tenure or a faculty appointment.
Dr. Ladner released the university from any and all claims arising under his contract. The university agreed to pay a one-time settlement payment of $950,000. This payment is subject to federal and local income tax deductions. From the gross amount, the university will also deduct withholding taxes on the additional imputed income of $398,000 being reported for Dr. Ladner for the years 2002-2005 and $125,000 in reimbursable personal expenses due the university for the same period, as determined by the Board of Trustees' Audit Committee and accepted by the board.
Acting Chair of the Board of Trustees Thomas Gottschalk said, "The board felt it was in the best interests of the entire university community to put the controversy surrounding the Audit Committee's investigation and Dr. Ladner's employment behind it. I along with many others have been saddened that recent events have overshadowed the great achievements of American University during Dr. Ladner's presidency, and I hope over time some balance and perspective will enable people to focus on the positives of his presidency as this controversy recedes into the past."
Incoming board chair Gary Abramson said, "American University has grown stronger and stronger in every respect over the past 10 years due in large part to an outstanding and dedicated faculty and motivated, bright students who chose American to prepare them for their future success. We will now return the board's full attention to providing the governance and resources which will help the university retain its position as one the of country's leading universities and to grow even stronger as it continues to develop its enormous potential."
Over his 11-year tenure, Dr. Ladner previously earned and has had set aside annual amounts of deferred compensation which he will retain. This deferred compensation includes approximately $1 million which is the present cash value of a split dollar insurance policy for which Dr. Ladner is named beneficiary. It also includes current account balances in two deferred compensation trusts established for Dr. Ladner's benefit, which now total about $1.75 million.
It should be clearly understood that these balances accumulated over the period of his employment and reflect investment returns on the amounts contributed. These balances had been held in trust for Dr. Ladner's benefit as deferred compensation. No new cash payments or contributions are being made to these deferred compensation accounts other than one final payment of the annual premium that was already due in this academic year on the life insurance policy.
Dr. Ladner has agreed to vacate the president's house in 90 days and the university has agreed to reimburse him for relocation expenses actually incurred by him up to a maximum of $20,000.
October 24, 2005