TalkoftheTown: New Mexico must address WNMU's failures for the sake of students' futures

For the past 15 years, James Finkelstein and I have studied the compensation and contracts of public university presidents. Our published studies have examined more than 200 contracts, with many more in our files. We have reviewed the 2022 “employment agreement” and the Dec. 20, 2024, “Separation and Faculty Appointment Agreement,” and the “Separation Agreement” for Joseph Shepard, the former president of Western New Mexico University.

I can confidently say these agreements are well beyond the norm for what we would expect to see. As a resident of New Mexico, I am surprised and support Gov. Michelle Lujan Grisham’s call for all members of the WNMU Board of Regents to resign.

I don’t know what the Board of Regents had in mind when offering President Shepard this contract, which includes a 20% raise in his base salary — with no mention of an evaluation to determine whether the increase is deserved.

Using our standard methodology to evaluate presidential contracts, we estimate that the 5-year employment agreement is worth more than $3.5 million — including the base salary, an annual “retention bonus,” supplemental annuity, car allowance, life insurance premium and an estimate of standard fringe benefits. His annual compensation equals approximately 90 full-time undergraduate scholarships.

Consider one example: He receives a $2,000 monthly car allowance. While I don’t know what kind of car he drives, I was curious to identify vehicles costing $2,000 per month to lease. The answer: None.

According to the CARFAx “Best Luxury Lease Deals for Every Brand,” I found only four cars that lease for more than $1,000 per month. The most expensive, the S-Class Mercedes, leases for $1,459 per month. The most expensive pickup truck, the 2024 GMC Hummer EV Pickup, can be leased for $1,580.

While President Shepard’s current contract is quite lucrative, especially for an institution of WNMU’s size and complexity, the separation agreement is, without question, the most generous we’ve seen. While other presidents failing to complete their terms have received larger payouts, this is the only one paying more than the remaining value of the president’s base salary without “buying out” tenure.

According to the employment agreement, if terminated “at the request of the Board” but without cause, he would have been paid for 1.5 years of the remaining 2.5 years of his contract — approximately $550,000. He also might receive up to 160 hours of unused vacation, roughly $30,000. There is no mention of any type of post-presidential appointment or tenure.

Using our standard methodology to assign a dollar value to the separation agreement, we estimate that the first five years of his post-presidential appointment is worth more than $3.5 million, including severance pay, faculty salary and fringe benefits. Essentially, the Board of Regents granted him the equivalent of an additional five-year term as president. In addition, the Board of Regents approved a teaching load half that required in the faculty handbook and allows him to teach all his classes remotely.

Beyond the Board of Regents’ breach of fiduciary responsibility in approving this agreement, the board may have created an even greater future liability for New Mexico residents. Gov. Lujan Grisham, Attorney General Raúl Torrez, or the New Mexico Legislature could take action against President Shepard. If so, WNMU may have to pay any attorney fees as the agreement provides for “representation by counsel of his choosing, and the University shall pay all reasonable costs and fees associated with such counsel’s representation of Dr. Shepard.”

If the state of New Mexico attempts to nullify the separation agreement, we can assume that Dr. Shepard will sue — not only for the full amount of the agreement but also for damages and attorney fees. By our estimates, his tenure alone could be valued at more than $3.5 million. Adding severance of nearly $2 million, damages and attorney’s fees, the lawsuit might ask for at least $15 million.

While I’m not an attorney, as a researcher and former university administrator, I’ve rarely seen an institution unwilling to settle when faced with such a high-profile lawsuit.

The Board of Regents seems more interested in protecting President Shepard’s interests than those of WNMU and the state of New Mexico. In my view, the board needs to be held accountable. To do that, Attorney General Torrez should launch an investigation and bring charges, if warranted.

In addition, the New Mexico Legislature should enact legislation to define a structure for the contracts of our state’s university presidents. Such legislation should focus on setting statewide limits on payouts for severance agreements and termination without cause.

It’s also clear from reporting by the Journal and other media outlets that State Auditor Joseph Maestas should undertake a statewide audit of expenditures by our public university presidents.

Public universities exist to serve students and their communities. The actions of WNMU’s Board of Regents have undermined this mission, diverting resources that could have been used to support students or improve academic programs.

New Mexico can lead the way in restoring accountability and trust in public higher education. By addressing the failures at WNMU and enacting systemic reforms, we can ensure that public universities remain focused on their true purpose: education, not enrichment.

Judith A. Wilde, Ph.D., of Albuquerque, is a research professor at George Mason University.