USC paid C.L. Max Nikias $7.6 million in exit package

July 16, 2020 1:48 PM PT

When C.L. Max Nikias was ousted as president of USC amid a sex abuse scandal involving a onetime campus gynecologist, the university’s trustees sent him off with a compensation package that exceeded $7.6 million, according to newly released tax filings.

The filings, made public by the university this week, cover the 2019 fiscal year, a period during which Nikias served just 38 days as president. He stepped down in August of that year in the face of faculty and student outrage over the handling of Dr. George Tyndall, a student health center doctor accused of abusing and harassing students for decades.

USC’s board defended the payout in a statement, saying it was necessary to abide by the terms of Nikias’ contract and “in order to move forward with a leadership change.”

“The board also agreed to certain other provisions to accelerate [Nikias’] departure prior to the end of his three-year term,” the statement said. “The compensation reflects money owed to him for salary, retirement and other benefits, some of which date back to the employment agreement he entered into when he became President in 2010.”

Nikias separately received a $3-million loan from the university to buy a Manhattan Beach home formerly owned by sports broadcaster Colin Cowherd.

Nikias, who remains a USC professor and a lifetime trustee, could not immediately be reached for comment. But the revelations quickly sparked debate.

Diane Ghirardo, an architecture professor and historian who has taught at USC since 1984, called Nikias’ exit package “scandalous,” “disgusting” and “beyond belief.” Ghirardo, who is also a member of Concerned Faculty of USC, rejected the notion that the multimillion-dollar award was necessary to turn the page on his tenure as president, saying it displayed a total disregard for accountability.

“You fire him,” she said. “If he doesn’t resign, you fire him and you’ve got grounds for firing him.”

Stanley Gold, a trustee who maintains a close friendship with Nikias, said the compensation was “appropriate and proper.”

“It was something that was agreed to by the entire board, urged by Chairman [Rick] Caruso and Wanda Austin,” Gold said, referring to the trustee who became interim president after f Nikias’ resignation.

Caruso rejected the assertion that Nikias’ monetary award was fully supported by the board of trustees.

“This was a difficult and painful negotiation, and I was eager to see new leadership installed, but I was never urging the passage of this financial package,” Caruso said.

Austin, a retired aerospace executive, took over as interim president and received nearly $700,000 for working a portion of the fiscal year reflected in the tax filings. Last year, Carol Folt took over as president.

Nikias was hugely popular among the trustees, a who’s who of power along the Pacific Rim, for much of his tenure.

A core group continued to back him after revelations that complaints about Tyndall were ignored for years. But as scores of lawsuits piled up against the university and state, and federal and local agencies launched investigations into the doctor and USC, it became clear to many on the board that Nikias could not continue as president.

During an emotional trustees meeting in August 2018, Nikias stepped down, and the board — rife with tension and infighting — approved the departure package, though the financial details were kept secret.

The trustees opted to honor Nikias’ employment agreement, which was negotiated at his 2016 reappointment.

He received his annual base compensation of $1.46 million for two months of work, along with nearly $600,000 in retirement and deferred compensation, according to the tax returns. The largest category of his generous payout: $5.48 million in “other compensation.”

It’s unclear what USC has continued to pay him for his current role as engineering and classics professor and president emeritus. His predecessor, Steven Sample, was paid about $400,000 a year as president emeritus before his death in 2016.

Nikias, a former provost who ascended to president, was often credited with transforming USC into a elite research institution, and his successes — including a $7-billion capital campaign — endeared him to many of the university’s rich and powerful trustees.

He and his wife, Niki Nikias, cultivated close bonds with many on the board, traveling with prominent trustees and donors to Europe, and socializing with alumni in Sun Valley, where the couple have a second home.

The Nikiases became so close to two trustees in particular, John Mork and Tamara Hughes Gustavson, that they designated them among those who could hold power of attorney in case they became incapacitated, public records show.

During his exit negotiations, Nikias was represented by the prominent Beverly Hills entertainment lawyer Bruce Ramer, another longtime USC booster and trustee who in recent years has served as a “life trustee,” a non-voting position with the governing board.

Ramer did not participate in the discussion of Nikias’ deal, and Gold, who works at Ramer’s law firm, recused himself from the vote.

“I pride myself on maintaining as pure ethics as I can,” Ramer said in a previous interview about his role in securing the exit package. He did not return a message seeking comment.

The disclosure of the hefty payout comes as USC grapples with financial challenges. In addition to the devastating fiscal impact of the coronavirus, the university is contending with enormous legal costs stemming from lawsuits by hundreds of Tyndall’s former patients.

The university has already paid $215 million to settle a federal class action suit and faces additional financial exposure from more than 600 plaintiffs in pending cases.

Gold said that when evaluating the payout, people should note it occurred before the pandemic caused financial woes for all educational institutions.

“Everybody has used a rearview mirror to see that things have changed, but you’ve got to put in context of when it was done,” he said.

Ghirardo, the architecture professor, said the millions given to Nikias make it clear that despite the presence of women among USC’s trustees, the governing body remains a “boys’ club” through and through.

“It’s really hard to break the pattern. They drink together. They golf together,” she said. “If it were their private business … would they have given him this kind of package? I don’t think so.”

Other payouts were revealed in the filings, including a $1.55-million payment to Dr. Rohit Varma, who succeeded Carmen Puliafito as medical school dean. Varma received the payout pursuant to an agreement with Nikias’ administration. “The university is legally obligated to honor that agreement,” USC spokeswoman Teri Everett said via email.

Niki Nikias was paid more than $194,000 for her role as “first lady.” According to Everett, Niki Nikias’ employment stopped when her husband resigned, but she still received a salary for a full year, along with a severance payment.

Carol Amir, who stepped down as general counsel in 2019, was awarded a $100,000 bonus. Earlier this year, the U.S. Department of Education faulted Amir’s office for possibly exceeding its advisory role to the point of undermining the Title IX investigation into allegations against Tyndall.

The university declined to comment on bonuses or whether it would seek to recoup the payouts.