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Wednesday, January 22, 2003

Krings in driver's seat with new deal


Peers, CEOs don't equal severance rule

By Cindi Andrews
The Cincinnati Enquirer

Hamilton County Administrator David Krings' new contract gives him a fatter severance and more control over his destiny than his counterparts in other Ohio counties - and even most executives in private industry.

Mr. Krings, whose contract was quietly updated in December for the first time in his 10-year tenure, can opt to consider himself fired if the commissioners try to reduce his benefits or if even one commissioner suggests he resign. If he's fired, he gets three months' notice, at least 29 months' severance pay ($434,120) and 23 months' health benefits.

"You know how some contracts have incentives?" said Commissioner Phil Heimlich, who took office after commissioners approved the deal and learned of it only this week. "This one has disincentives."

Administrators of Ohio's other top four urban counties have no severance built into their contracts. Even at Fortune 1000 companies, the maximum median severance for CEOs is 24 months' salary and benefits, according to a 2002 survey of 925 organizations commissioned by Lee Hecht Harrison, a global career management firm.

In comparison, "this guy has got a sweetheart deal," said Lee Hoffheimer, senior vice president of Lee Hecht Harrison's Cincinnati office.

No one has publicly threatened to fire Mr. Krings. The new contract was approved at the last meeting before Mr. Heimlich - an advocate of reducing spending and privatizing services - replaced more moderate Republican Tom Neyer.

University of Cincinnati law professor Rafael Gely, an expert in contracts and employment law, found the provisions of Mr. Krings' contract unusual.

"It certainly gives the administrator a lot of control," he said. "If I want to get fired tomorrow, I can do something really bad today."

In private industry, there's a trend toward giving top executives more escape clauses in case control of the company changes, Ms. Hoffheimer said - usually to encourage them to leave when there's a merger or a takeover. In those cases - typically involving major, publicly held companies - the maximum median severance is 36 months, she said.

Lee Hecht Harrison's survey also found that 75 percent of governments and nonprofit associations offer severance, and their maximum median is 20 weeks' pay.

Once rare in the public sector, they're becoming increasingly common, said Michele Frisby, spokeswoman for the International City/County Management Association.

"Since there is only one county administrator's position in the jurisdiction, most likely you're faced with relocating" if fired, she said.

Severance is not the norm in Ohio's biggest county governments, however. The top administrators in Franklin, Cuyahoga and Montgomery counties "serve at the pleasure of the Board of County Commissioners," as Cuyahoga Human Resources Director Dennis Madden put it, and Summit's serves at the pleasure of voters.

Mr. Krings also is better-paid than his counterparts. Montgomery County's Deborah Feldman is the closest at $162,500, compared to Mr. Krings' base salary of $179,636.

E-mail candrews@enquirer.com




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