Even though a report by The Repository in Canton, Ohio cities people in and out of the retirement fund as saying Dyer is on his way out – either on his own or because he will be forced out – the price tag for the move is a hefty one. If the STRS board fired Dyer tomorrow, he would walk away with a $533,620 check. If he resigns, he gets at least $133,405 because he must give STRS a six-month notice. That does not include pay for any unused sick or vacation time.
That is due to Dyer’s 61?2 -year contract, which ends June 30, 2005, which must be paid out unless the board can prove “malfeasance, misfeasance or nonfeasance.”
Much of that is due to the contract calling for Dyer’s pay to be adjusted annually based on the Consumer Price Index (CPI) of the previous year or 3.5%, whichever is higher. However, the index has not been above that level since 1991 and Dyer has received raises to his base salary above 3.5% every year since he got a new contract in February 1997.
In 2001, his base salary was $236,000 and rose 8.6% in 2002, according to STRS documents. It went up again this year to $266,810, a 4.1% increase.
Additionally, Dyer has received annual bonuses for meeting performance goals. His bonus is based on the weighted average of bonuses given to the STRS investment department multiplied by a percentage obtained from his annual evaluation. In other words, the higher the bonuses paid to the STRS investment staff whether the portfolio did well or not the higher Dyer’s bonus.
It is lavish expenditures like the bonuses, along with artwork purchases and travel over three years that landed the entire STRS board in hot water recently and has some calling for Dyer’s head (See Ohio Pension Fund Hit for Lavish Spending Practices). Wh ile the board was paying $15 billion for these expenses over that time, the system’s investments plummeted by $12.3 billion and health care contributions by retirees jumped significantly.
Responding to criticisms of its lavish spending and compensation practices, STRS voted late last week to freeze employee bonuses, while the system’s board members promised a full review of policies on out-of-state travel and fringe benefits. The immediate effect of suspending bonuses will cost the investment staff, at least for now, discretionary bonuses that were scheduled to be handed out next month. The bonuses – which come in addition to “performance-based” bonuses – totaled $1.75 million in 2000, $2.2 million in 2001, and $1.46 million in 2002 (See Ohio Fund Wants A Closer Look at Bonuses ).
Additionally, Dyer was scolded by several board members for making “unacceptable” comments to retirees, to justify all employee hirings since 1998 and fund the system at current levels. Among the comments that landed Dyer in the middle of criticism, was a letter written to one retiree that the teachers’ pension fund belongs to STRS board members “to distribute as they see fit.”
Responding to that statement, STRS board Chairwoman Deborah Scott affirmed to the 100 or so teachers and retirees present at the meeting, “This is not the board’s money. This is STRS money; it is the members’ money.” The board will begin reviewing hiring and bonus policies at its next meeting, scheduled for August.