Washington — A normally routine mid-winter meeting of the American Psychological Association Council of Representatives exploded in recriminations when members learned that Raymond D. Fowler, Ph.D. received $2.2 million when he retired as CEO at the end of 2002.
Contributing to the acrimony was the fact that most members were just learning of the payout more than a year after it was paid and only then because of a gossip column item in The Washington Post.
The APA Board of Directors approved the termination benefits in 2002 — a year when the association ran a $1.3 million deficit that prompted the Council to forbid red ink in future budgets.
The Council theoretically determines how the organization spends its money, but other than those on the board of directors members were unaware that Fowler, who served as CEO for 13 years, received a total of $2,218,914 when he retired.
Fowler was halfway through his latest five-year contract when health concerns prompted him to retire.
Council members and most of the APA staff were stunned when the newspaper item appeared on the morning the mid-winter meeting here opened.
Regular business came to an abrupt halt as the board scrambled to put the best face on an embarrassing situation, preparing a power-point presentation on how the $2.2 million payout was determined.
While the Post article and one a day earlier in The National Journal made it look like the $2.2 million was Fowler’s annual salary, Jack McKay, APA chief financial officer, said the amount reported was correct, if misleading.
The revelation of the payout widened an already-growing rift between the Council of Representatives, the 180-member body that sets policy for the organization, and the six-member board of directors that deals with business matters between the Council’s two annual meetings.
Discussion of that increasing alienation between the two groups took up most of the Council’s two-and-a-half-day meeting. The Council met in a two-hour closed-door executive session on the last day to further resolve its concerns, causing the meeting to run an hour over by which time many council members had left to catch flights back home.
Here is the breakdown of Fowler’s $2.2 million termination pay:
* Salary and benefits for 2002: $364,172.
* Buyout of the two-and-a-half years left on Fowler’s contract: $941,571.
* Deferred compensation from for the years 1989 through 1996: $476,374.
* End of contract leave, an amount granted high-level APA executives based on one month’s salary for every year of service: $436,797.
While most council members agreed that Fowler had done a good job in running the 150,000-member organization, many questioned the wisdom of paying Fowler for the two-and-a-half years remaining on his contract.
APA Treasurer Gerald P. Koocher, Ph.D., who later apologized for keeping the details of the settlement from the Council, likened the contract buyout to those paid to college basketball and football coaches whose teams fall on hard times.
Bertrand Karon, Ph.D., of Michigan State University, representing the Division on Psychoanalysis, wasn’t buying that argument.
“The difference between this situation and coaches is that coaches have their contracts bought out because they are fired,” Karon said.
The board of directors was rebuked several times by council veterans as well as some more recent members for not informing the Council of the termination package amount.
James Bray, Ph.D., of Houston, Tex., said, “It’s not the money, but the process. We should know about these kinds of actions before the fact, not after the fact.”
Veteran Council member Jerome Resnick, Ph.D., of Elkins Park, Pa., said, “Council should have more information about what the Board of Directors is doing. We shouldn’t have to learn about it in the Washington Post.”
Lisa Grossman, Ph.D., J.D., of Chicago, a major player in APA governance, reminded the board that the association’s bylaws limit the board’s activities to emergencies.
“This was not an emergency situation,” Grossman said.
Neil Berger, Ph.D., of New York City, said that he felt out of the loop. “This is just another example of Council not being involved in APA decision making.”
Lilli Friedland, Ph.D., of Los Angeles, said she was concerned about council members’ ability to explain the payout to their many cash-strapped members and constituents.
McKay noted that as the association’s chief financial officer, he takes the Council’s policy-making role seriously.
“There was no effort to hide anything from anyone,” he said.
McKay and Koocher reminded the Council that when it approved the 2002 budget, it could have seen the details of the Fowler package, although it was never explained how that information could be gleaned from the hundreds of pages included in the annual budget.
Later in the Council’s deliberations of the 2004 budget, it became clear that information in the document is presented in such a way as to make it almost impossible to tell how money is being spent. McKay said his office is exploring ways to make the costs of operations and programs more understandable.
After the 2002 shortfall ended deficit budgeting, APA exercised voluntary buyouts that resulted in more than a 50-person reduction in the APA’s workforce and other cost-cutting measures to produce a $173,000 surplus in 2003. In the 2004 budget, the APA should show a surplus of $642,700.