- "It was at the personnel committee that it came to the attention of myself and other board members that the executive committee, in January, awarded a bonus to Dr. Waters, without notice compliant with the public meetings [law]," said Art Pope, of NCInnovation's board of directors.
The board of directors of NCInnovation, the private nonprofit leveraging $500 million in taxpayers’ money to pursue its leaders’ vision of commercializing more public university research in North Carolina, met virtually Thursday to discuss and vote on items related to a special “litigation committee” and other subcommittee business.
While discussion of the special litigation committee — ostensibly created to explore legal actions to stymie public information requests by individual directors and outside groups — was relegated to closed session outside of the public eye, discussions related to a motion to abolish the personnel committee further raise transparency questions at the state-supported nonprofit. The discussion revealed possible violations of open meetings law to convene and award executive staff bonuses.
Personnel committee
Practical considerations were given as reason for the motion to disband the personnel committee, as the nonprofit’s bylaws dictate that directors cannot serve on more than three committees at a time. The creation of the new special litigation committee, and the initial assignments to said committee, would have put some directors over that limit.
Director Art Pope, one of the Board’s legislatively appointed members following state budget appropriations of $500 million to the nonprofit, objected to the motion Thursday, arguing it was ultimately unnecessary because committee assignments could be more equitably divided among directors instead.
“[T]here are a number of board members who are serving on less than two board committees now, because you don’t count the executive committee, and even with the creation of the special litigation committee and the program committee, they will still be able to serve that,” said Pope. “So [I suggest a solution] is not to abolish the personnel committee but, simply, if Ben Teague and Jeff Turner wish to resign from the personnel committee — rather than abolish it in its entirety — that would free them up to serve on the new committees; the special litigation committee, and the program committee.”
Pope’s opposition rested on the contention that the personnel committee was “doing good work” and had ongoing responsibilities spelled out in the organization’s bylaws, including annual reviews regarding the compensation for officers as well as the executive search function should the company’s CEO or other top executives depart from the organization.
Chairman Kelly King, retired CEO of Truist (BB&T) and one of NCI’s progenitors, addressed those concerns directly, advising that such functions and responsibilities would not be lost, but merely handed off to the executive committee for resolution.
Organizational issues aside, it was what Pope said next that may raise the eyebrows of those concerned with transparency at an organization in receipt of half a billion dollars in taxpayers’ money.
“Secret” meetings?
Pope elaborated about the value of the personnel committee, noting his assessment of the good job it was doing, and mentioning that NCI CEO Bennet Waters got “95% of what he asked for; if not 100%” in terms of compensation.
“I will note, respectfully,” Pope continued, “that it was at the personnel committee that it came to the attention of myself and other board members that the executive committee, in January, awarded a bonus to Dr. Waters, without notice compliant with the public meetings [law] — found [out from] fellow board members — and it wasn’t until it came out through the personnel committee that we finally addressed that issue with some documentation about that in November, months afterwards.”
Sources indicate the bonus Waters’ received as a result of the January meeting in question may be as high as $66,000. The median household income in North Carolina in 2023 was only slightly higher, at approximately $68,000.
“So, respectfully the personnel committee was doing its job and I don’t see the need to abolish it just to make allowances for board committee members to serve on additional board when there’s plenty of capacity within existing board membership,” Pope added.
He then encouraged his fellow directors to vote against the motion disbanding the personnel committee, but to no avail; a subsequent vote on the motion passed with only a few dissensions, and NCI’s personnel committee has now been abolished.
Importantly, executive compensation is not funded with taxpayer funds, according to statute and internal controls. NCI was required to raise $25 million in private funds to finance operations and administration, including executive compensation. The entirety of North Carolina taxpayers’ $500 million is committed to an endowment, for which the board is still selecting investment managers to place these funds in the wider market. NCI’s statutory structure plan of using net returns to fund future grants.
Within the context of full transparency concerns, however, and recent published comments by the NC House Oversight and Reform Committee that the “audited financial statements do not make clear the separation of public and private funds,” the five-figure executive bonus could bring further scrutiny of NCI.
Following the vote to disband the personnel committee, the board entered closed session to discuss matters regarding the special litigation committee. The next full board meeting is expected in early 2025.