Wayne State president leaves with ‘bargain’ settlement of $760K, plus health care

The deal calls for Espy to receive $760,449 plus two years of health coverage for her and her spouse
In exchange for the settlement, Espy gives up tenure at Wayne State
If she’d remained president the full five years, with tenure she could have earned millions more, one expert said

Former Wayne State University President Kimberly Andrews Espy left her post with a settlement agreement that pays her approximately one year’s salary in exchange for giving up her tenure, characterized by an expert as a “bargain” for the university.

WSU released the terms of her departure Thursday in a 10-page separation agreement. It included $760,449 and two years of health care for her and her spouse and a requirement that she relinquish her tenure rights to return to the faculty. She also must move out of the president’s home by Sept. 30.

Espy served WSU for two years as the first female president, then departed this week, three years before the end of her five-year contract.

Espy said she stepped down for “personal reasons.” Relations between her and the board suffered because of perceptions about her commitment to Detroit, reports from faculty members about respect and her personnel decisions, according to a source close to the situation.

Kimberly Andrews Espy was the first female president of Wayne State. She stepped down Wednesday. (Courtesy of Wayne State University, CC BY-SA 2.0)

Her August 2023 contract awarded her a total annual compensation package worth nearly $1 million, which included a base salary of $690,000, which would increase 3% each year, along with $222,000 in deferred compensation and supplemental retirement income.

Espy’s original contract also gave her rights to return to the faculty as professor with tenure in WSU’s Department of Psychiatry in the School of Medicine. That benefit is worth significantly more than $760,449, said James Finkelstein, professor emeritus of public policy at George Mason University.

Had Espy, 62, finished out her five-year term as president and returned to the WSU faculty and worked for another 10 years, she might have earned several million more dollars from WSU.

“The university has reduced its future liability significantly,” said Finkelstein, who studies the contracts of public university presidents. “The university either struck a bargain — or she could have held out for more. The larger question is whether universities should be committing millions to leaders who don’t work out.”

Espy’s exit contract doesn’t come close to some university president exit agreements that Finkelstein has seen, some in excess of $4 million to presidents who have served a similar time frame and left early.

“This one is not very lucrative for the president,” said Finkelstein. “While it’s still a lot of money for the university, compared to what they might have to be paying her, it is significantly less.”

WSU released the agreement one day after the Board of Governors met for a special meeting on Wednesday, her last day, to accept her resignation as the 13th president of the state’s third-largest university. The board then appointed as interim president Richard Bierschbach, a professor at WSU Law School and the university’s longest-serving dean.

“Serving this institution has been an honor, and I am deeply proud of what we have accomplished together — from advancing student success and expanding research innovation to strengthening the community through collaboration,” Espy said in a statement. “With the remarkable students who inspired me every day, this decision was not a simple one, and I look forward to spending more time with my family. I am confident in the university’s continued momentum and further success for the future.”

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Board Chair Shirley Stancato expressed gratitude to Espy before a standing-room only crowd of faculty, students and staff gathered Wednesday for the brief meeting.

“We thank President Espy for her leadership and contribution to the university during her tenure,” Stancato said. “During this period, the university has accelerated social mobility for its students, grown the region’s economic impact through collaboration with critical partners throughout this area, and achieved remarkable accomplishments through our faculty in research and discovery.”

A national search would launch soon for its next president, WSU officials said.

Espy’s departure follows years of tumult at the helm of the state’s other large universities.

Former University of Michigan President Santa Ono left his post in May after serving 2.5 years, and made a failed effort to lead the University of Florida. Former Michigan State University President Samuel Stanley Jr. left in January 2023, serving just under 3.5 years, after announcing he had “lost confidence” in the board and the board offered him a path out of his post he’d held since 2019.

Detroit Regional Chamber Sandy Baruah thanked Espy for her leadership, service on the chamber board and work in increasing college access and attainment in the region. But he also expressed concern.

“Espy’s departure as Wayne State’s president continues a troubling trend of premature leadership exits at Michigan’s prestigious R1 universities, which seems to be outpacing turnover rates at our other higher education institutions,” Baruah said in a statement.

R1 is a designation for major research universities.

“The governance structure of these great R1 institutions warrants further examination to ensure they are best positioned to achieve their missions, which are vital to business and our state’s economy.”