KTSC board accepts CEO Ray's retirement, wants $96,000 back

KTSC board accepts CEO Gloria Ray's retirement, wants $96,000 back

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Knoxville Tourism & Sports President and CEO Gloria Ray Knoxville Tourism & Sports President and CEO Gloria Ray

KNOXVILLE (WATE) - After arguments from both sides Friday, the Knoxville Tourism & Sports Corp. Board of Directors agreed to accept President and CEO Gloria Ray's retirement in two weeks, pending an agreement on money.

The board rejected Ray's current contracts during its meeting. The members want to retrieve $96,000 already paid to Ray.

Gloria Ray has hired attorneys Dennis McClane and Chad Hatmaker, of Woolf, McClane, Bright, Allen & Carpenter PLLC, to represent her.

When the meeting began, KTSC attorney Ward Phillips said Ray's retention and reconciliation agreements in his opinion were "not valid."

Phillips also indicated some of Ray's pay and bonuses were not known by the KTSC executive committee or other board members.

In 2007, there were no minutes kept of the KTSC meeting. Executive members recalled that former Chair David Duncan finalized a new agreement including a 50% cap on Ray's bonus.

Duncan resigned on Wednesday and was not at Friday's meeting.

Phillips said Ray may have prepared her own contract agreement with Duncan. "My assumption is, the extension and bonus agreement were drafted by Ms. Ray and hammered out with David Duncan in her office," he told the board.

Ray's extension including 10 weeks of vacation, a $75,000 bonus and a $150,000 consulting fee were not disclosed to the executive committee, according to Phillips.

Ray received a $50,000 bonus the day Duncan signed it, but two months before it was shown to the executive committee, Phillips said. He added that this was illegal.

He contended that Ray's $86,649 retention bonus and a $166,000 bonus at the end of her contract were not known by the executive committee.

Ray said Duncan told her all the agreements were approved by the executive committee, Phillips said.

Attorney Phillips also advised the board to consider action on Ray's reconciliation bonus and her retention bonus because they were unauthorized and against the KTSC bylaws.

He said the executive committee should have dug deeper, but the members are volunteers and all have full time jobs.

A KTSC finance board member asked why the organization's CPA Van Elkins didn't catch any of this. Elkins said he believed all the compensation was approved. He also defended his audit and pointed allegations back at Duncan.

Elkins described Ray's bonus package as capped, sort of. She also got performance money outside of the capped amount. The $46,000 reconciliation bonus for back taxes Ray negotiated on the hotel/motel tax was outside all other agreements.

Ray was already paid $96,000 in bonuses that attorney Phillips says are not valid. The board had the choice to ratify or reject the agreements and chose to reject them.

As the board moved to discuss Ray's job status, she told the members, "I am willing to retire" if the attorneys can agree to terms. 

Ray said she had planned to retire in 2011, but agreed to an extension instead.

"No payments were made or promised that I was not told were approved by the executive committee and signed by the chair," Ray told the board. "I have always given my heart and soul to KTSC. I don't believe I have done anything wrong."

"It was clear that the board understands that I was told that every contract I signed had been properly approved, and that I entered into all contracts in good faith. I look forward to working toward a resolution that is best for all parties involved," Ray said later in a statement released to the media.

Interim Chair Susan Brown resigned from the executive committee and the board, saying "This controversy is a menace (to KTSC)."

Shortly after that, all the executive committee members agreed to step down, saying calls Thursday for their resignations by Knox County Mayor Tim Burchett and Knoxville Mayor Madeline Rogero influenced their decisions.

Mayor Burchett also asked the state comptroller to audit all of KTSC's financial dealings.

A new executive committee was voted in Friday that includes businessman Bo Connor and city of Knoxville Chief Policy Officer Bill Lyons. Attorney Peyton Hairston was voted as vice chair.

Mayor Rogero released a statement Friday, saying, "I appreciate the difficult work of the Knoxville Tourism & Sports Corp. board today and am encouraged by the movement toward change in the organization's leadership. I personally believe there was no wrongdoing on the part of the executive committee and deeply appreciate their service. Their resignations will ensure a fresh perspective moving forward and help restore public confidence in KTSC."

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