Controversy Over a $2-Million Pension Package Prompts Departures at Charlotte’s United Way

Public outcry over the pension package provided to the chief executive at the United Way of Central Carolinas, in Charlotte, N.C., has led to resignations and raised questions about the group’s ability to meet its annual fund-raising goal.

The organization’s board had approved a $2-million pension package for its longtime president, Gloria Pace King. But after that information was reported by local news organizations, the board decided to ask Ms. King to resign or be fired, saying the controversy had crippled her ability to lead.

Graham Denton, the board’s chairman, has also resigned, after citing “a collective breakdown at many levels” within the group.

The board has appointed a committee to investigate the matter. The leaders have also said they will pay Ms. King up to $676,000 remaining on her three-year employment contract, but will not pay more than $1-million remaining on the pension deal.

Board members explained Ms. King’s original pension figure by saying the plan was originally supposed to be put in place in 2001, and that they needed to make bigger “catch-up” payments to bring the account to the desired level before Ms. King reached retirement. They said that, without the pension plan, Ms. King’s pay threatened to bump up against IRS tax ceilings that would have kept her benefits below the 60 percent of annual salary the board tries to give its retired workers.

At a news conference, Mr. Denton said that, while such pension deals weren’t uncommon for top United Way executives, “it has become increasingly clear that the retirement package exceeded what our community expects for a leader of a nonprofit organization, no matter how successful the organization.”

‘Terrible Treatment’

Ms. King’s lawyer, William Diehl, said his client is ready to fight in court for the rest of the pension money.

“She sees herself as the victim of terrible treatment after 14 years of excellent service and nothing but praise,” he said. “They need to fulfill their obligations to her, the same as they need to fulfill their obligations to the community.”

When Ms. King came to the United Way of Central Carolinas in 1994, the organization had missed its fund-raising goals two consecutive years. Board leaders recruited Ms. King from the United Way in Cleveland.

Under her leadership, annual campaign totals for the Charlotte region’s United Way soared from $18-million to $45.3-million last year, making it the 18th largest of more than 1,250 United Ways nationally. It took in more money per capita than 90 percent of the country’s large United Ways.

Fund-Raising Trouble

Initial indications are that the controversy is hurting the fund-raising campaign.

More than a dozen companies have delayed their United Way drives, the charity’s officials say, and two have cited the King controversy in declining to participate in this year’s Pacesetter campaign. That campaign, a preliminary fund-raising effort designed to garner the participation of large companies, came up nearly a million dollars short of last year’s total.

The economy is also a factor. Banks and financial-services companies dominate Charlotte’s corporate scene, and the downturn in the mortgage sector has left hometown giants Bank of America and Wachovia struggling.

Mr. Everett said the board committee will find and fix any problems with the organization. He hopes donors don’t let their anger blind them to the needs of people helped by the 91 charities the United Way supports.

“There are people who are angry, and maybe they have a reason to be angry,” he said. “I hope people will choose to get beyond this for the time being.”