Is Tom Jurich worth his pay? His lawyer says yes, and then some
In a written defense of suspended University of Louisville Athletic Director Tom Jurich released Monday, attorney Allison M. Stemler takes issue with news reports about her client’s pay package, and says he's worth every penny.
On Oct. 8, the Courier-Journal reported that, “Over the past seven years, through a byzantine array of longevity and performance bonuses, base pay raises and tax subsidies, Jurich collected total compensation of $19,279,710, an average of $2.76 million per year.
“Last year, his taxable income – enriched by the vesting of a $1.8 million annuity plus $1.6 million from the university to pay his taxes on it – totaled $5.3 million.
“Although the annuity was earned over several years and will be paid out in $200,000 installments, his listed income last year was more than the university budgeted for its departments of biology ($3.3 million), English ($4 million), history ($2.4 million) or mathematics ($3.5 million).”
In her letter to university trustees, Stemler:
►Noted that news reports in past years pegged Jurich as the nation’s second- or third-highest paid athletic director. “Tom is likely not the highest paid AD, but that is hard to determine since many schools do not report compensation or do not report total compensation,’’ Stemler wrote.
►Contested a reference to last June’s forensic audit of the University of Louisville Foundation as providing “the first public accounting of his total compensation.” Stemler said the university has released salary figures in the past, but did not explain why those numbers are much lower than the total cited by auditors and confirmed by the Courier-Journal.
►Said U of L, not Jurich, created the pay plan, which “includes pay items that are now out of favor, but which were commonplace when the contract was last re-written in 2006 and 2007.” She didn’t specify “out of favor” items.
►Contended the report gave the impression that Jurich’s $3.5 million in deferred compensation in 2016 was “larger than was actually the case” because it was earned over 12 years, while the article said it accrued over “several years.”
"U of L has not paid Tom too much when measured by his accomplishments," Stemler wrote.
In a separate letter, athletic foundation board member Larry Benz questioned a related Oct. 8 Courier-Journal report that in recent years the university has subsidized athletics, making it a non-self-supporting program as defined by the NCAA. Benz argued the NCAA standards are irrelevant, and that changes in the way the university accounts for athletic scholarships would make the program appear self-supporting.
"Don't let headlines or the NCAA methods of assessment fool you," Benz wrote.
Read the original report:
His loyal deputies call him the best athletic director in America.
While fans at Alabama, Notre Dame and Ohio State might quibble with that, there is no disputing that suspended University of Louisville athletic director Tom Jurich has been the highest paid in the land.
Over the past seven years, through a byzantine array of longevity and performance bonuses, base pay raises and tax subsidies, Jurich collected total compensation of $19,279,710, an average of $2.76 million per year.
Last year, his taxable income – enriched by the vesting of a $1.8 million annuity plus $1.6 million from the university to pay his taxes on it – totaled $5.3 million.
Although the annuity was earned over several years and will be paid out in $200,000 installments, his listed income last year was more than the university budgeted for its departments of biology ($3.3 million), English ($4 million), history ($2.4 million) or mathematics ($3.5 million).
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Jurich’s compensation was more than twice the $1.98 million paid to the next best-paid AD, Ohio State’s Gene Smith, according to a Courier-Journal survey. The only athletic director who has come close was Vanderbilt’s David Williams, who earned $3.2 million in 2010, but he also was the university’s general counsel and vice chancellor at the time, as well as a tenured law professor.
While the compensation of now-suspended Louisville basketball coach Rick Pitino – $7,769,200, $5.1 million of which comes from the university, according to USA TODAY – has been well publicized, Jurich’s pay has not gotten the same level of scrutiny. The first public accounting of his total compensation came in a forensic audit of the U of L Foundation released in June.
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A review of documents obtained under the state's public records law shows that Jurich's employment agreement was amended and enhanced repeatedly over the years with a stroke of the pen by former President James Ramsey, who was ousted last year amid questions about his own lavish compensation.
The jumble of side letters and amendments, coupled with under-the-radar special bonuses and sweeteners, helped obscure Jurich's actual compensation.
For example, Kentucky's transparency website lists his salary at only $514,481 – the amount the university reports to the state, according to a spokeswoman for the Finance and Administration Cabinet.
University spokesman John Karman said the figure represents Jurich's university salary as of July 1, 2014, and that he was later given a raise to just over $1 million. It's unclear why the state has only a three-year-old number, but that's not the only variation in what people think Jurich makes. The foundation auditors in June said his university salary that year was about $1.1 million, while the athletic department said last month that his base pay was then about $1.3 million.
Jurich's deal includes perks and benefits that are extraordinary for even the nation's best-paid coaches, let alone an athletic director, said Martin J. Greenberg, a Milwaukee lawyer who teaches sports contract law at Marquette University and studies coach and AD pay packages.
Greenberg said athletic directors deserve to be well paid because they are the equivalent of CEOs of large corporations and wear many hats. They are fundraisers, compliance officers, human relations managers and negotiators of multimillion-dollar construction, media rights and shoe-and-apparel deals. The U of L athletic department had $112 million in revenues in 2015-16, the 22nd highest in the nation.
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But Jurich "was extremely richly paid, considering Louisville’s place in the scheme of college athletics,” Greenberg said. “His perks are extremely generous – absolutely.”
Those benefits include:
► Making some compensation tax-free by "grossing" it up, or essentially paying the taxes for him. This was a $1.6 million benefit to him in 2016.
► Paying Jurich 160 percent of the cost of his life insurance policy, and allowing him to keep the overage. Employer-paid policies are common for athletic directors, but sweetening the deal is not.
► Paying him as much as $30,000 per year to hire financial advisers to help manage his money, as well as paying taxes on that perk.
► Providing $12,000 per year to cover the cost of two vehicles. Coaches and ADs commonly get allowances for one car, but not for two.
► Buying memberships in two high-end private golf clubs — Hurstbourne and Lake Forest, where membership fees are $28,000 and $25,000, respectively. That's in addition to membership at the university's own Cardinal Club course. The university also pays Jurich's annual club dues and covers his required monthly minimum bar and food bills – an $11,260 benefit in 2015, the most recent year available from the athletic department.
► Providing 16 Skye Terrace seats each year for the Kentucky Derby and Oaks. According to the track's website, eight premium seats would sell for $24,000 per year.
► Guaranteeing eight football and basketball season tickets for life — and not just his life. The seats, valued at about $11,500 per year, are property of the Jurich family for the lifetimes of his wife and children, as well.
Greenberg, who teaches the nation’s only law school class on coaches and athletic director contracts, said it is unusual, if not unprecedented, for universities to pay taxes for ADs, provide tickets for events other than at their university or to pay for lifetime tickets to athletic events for their families.
“They have done a good job of keeping this employee happy,” Greenberg said. “He has a lot of compensation vehicles that are unusual.”
He said Jurich’s package is especially generous given that Louisville's program is not self-sufficient, meaning that it relies on subsidies from the university to break even.
Dawn Heinecken, the lone faculty member of the U of L Athletic Association board to respond when asked for comment, said Jurich’s compensation is too much.
Heinecken said U of L's willingness to pay Jurich, Ramsey and presidential staff far more than their peers, while intentionally underpaying College of Arts & Sciences in comparison to peer universities, “highlights a fundamental hypocrisy in the decision-making processes of those in power.”
Jurich's lawyer, Alison Stemler, said Wednesday that neither she nor her client would comment for this story.
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Jurich is now on paid leave, having been suspended after a federal criminal complaint unsealed in New York appeared to implicate U of L coaches in a conspiracy to funnel bribes to a recruit.
In interviews before the federal investigation became public, Jurich’s top aide, Executive Senior Associate Athletic Director Kevin Miller, and department spokesman Kenny Klein said Jurich deserves every penny he's paid.
“He never asked for a dime,” said Klein, adding that the university sweetened Jurich's compensation to keep him from leaving.
His friend, Terry Meiners, the radio and TV personality, said: "Tom Jurich injected a businesslike strategy into a middling athletics department to fast track it to greatness. The former Floyd Street chemical dumping grounds now house an EPCOT Center of colossal stadiums, pristine practice facilities, and green space. Jurich did the bulldozing and the city reaps the rewards.
"Do we overpay for sports entertainment?" Meiners asked. "No doubt. Jurich is a one-man Fortune 500 company. CEOs get paid. Great CEOs get paid stupid money. Welcome to ‘Merica."
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In an interview, former trustee Bill Stone, a member of the U of L Athletics Association board, said: "What he accomplished here is just short of miraculous."
By all accounts, Jurich had a golden touch.
When he was hired 20 years ago, Forbes magazine said, “Louisville athletics was a pariah — an organization so misaligned, so bloated in inefficiency that the very conference it helped form had sued to expunge the university from its ranks. There was little hope for Louisville, its faith seemingly sealed as terminal."
The Cardinals faced NCAA investigations of the men’s basketball program and another into women’s volleyball. The football team had struggled to a 1-6 record and drew a season-low 29,547 fans to Cardinal Stadium for a 64-33 drubbing by Tulane.
In the two decades since, Klein said, Jurich “transformed our campus and the city.”
He helped build new homes for every sport except tennis and football, bringing nearly $280 million in investments to facilities built or under construction.
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He engineered its climb from Conference USA to the Big East and finally to the ACC.
He moved the football team into Papa John's Cardinal Stadium and men’s basketball into the KFC Yum Center downtown.
In 2007, Street & Smith’s Sports Business Journal named Jurich athletic director of the year.
And his teams won, on the courts, the fields and in the classrooms, Miller said. They garnered 67 conference championships, 42 conference tournament championships, finished among the nation’s top 25 on 125 instances and 207 times sent teams or players in NCAA postseason championship events.
Student-athletes also improved in the classroom. Thirty were selected Academic All-Americans and 28 U of L teams earned NCAA Academic Progress Rate public recognition awards.
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With success came more and more money.
When he was hired away from Colorado State University in October 1997, Jurich was paid a modest salary of $170,000.
In 2003, he was named vice president and given a contract extension designed to keep him on campus through 2023. That year, the U of L Foundation also began paying him an annual salary for additional duties. By 2010, it was $255,000.
In one of the oddities in his compensation, the U of L Athletic Association began reimbursing the foundation for that salary, for reasons that Miller and Jurich have said they don’t remember.
In 2007, to keep him from being recruited away, the university signed Jurich to a new contract that provided him with additional deferred compensation, longevity bonuses and retirement pay.
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But that contract only reflects a portion of Jurich's pay package. In subsequent years, Ramsey funneled him more money and better benefits through a number of letters and “memoranda of understanding" that re-wrote his deal without giving him a new contract.
In 2009, for example, Ramsey raised Jurich's foundation-provided annual pay by $40,000 and agreed to give him a .05 percent commission on any donations he helped land for academics, though university officials say he never received any commissions.
In 2011, Ramsey added three years’ severance pay from the foundation if Jurich was terminated without cause, and one year's compensation if he was fired for cause.
“Thanks for all your work on behalf the university,” the president said in a letter outlining the benefit change.
And in 2014, in the potentially richest amendment, Ramsey unilaterally approved a $3 million bonus if Jurich is still employed at the university at age 65, and another $3 million if he lasts until 70.
Jurich is now 61. It may be weeks before he knows his fate at Louisville, but if he is forced to leave he'll walk away with a nice collection of assets.
During his years at the helm, he and his wife, Terrilynn, have been able to buy a 6,936-square-foot home in Lake Forest valued at $1.4 million; a $1.99 million vacation home in the Colorado resort of Steamboat Springs; and a $1 million, 2,000-square-foot condo overlooking the Gulf of Mexico in Clearwater, Florida. With another couple, they also own a $255,000 home on Rough River Lake.
Reporter Andrew Wolfson can be reached at 502-582-7189 or firstname.lastname@example.org. Sports enterprise reporter Danielle Lerner contributed to this story.