United Way Takes Former President Off Payroll

ALEXANDRIA, Va. —  William Aramony, the former president of United Way of America, has been removed from the payroll of the nation’s largest charity and legal questions affecting his pension are being studied, the organization announced Tuesday.

Aramony, president of the organization for 22 years, resigned Feb. 28 in the wake of news reports that his compensation, including benefits, totaled $463,000 a year. Questions also were raised about personnel and management practices.

Officials disclosed Friday, during a teleconference linking the national charity and its local affiliates, that Aramony’s salary of $390,000 was still being paid.

Tuesday’s announcement came in a memorandum to members of the United Way staff from Kenneth W. Dam, the organization’s interim president. He said the executive committee of the group’s board of governors voted Monday to discontinue Aramony’s salary, effective immediately.

“At this time, Mr. Aramony will receive no severance payment,” Dam said. “Distribution of pension benefits to Mr. Aramony requires resolution of legal questions about his retirement package. He will receive the same coverage as other retirees under UWA’s group health plan.”

United Way spokesman Tony DeCristofaro said he was not familiar with the details of the legal questions. He said the board decided to remove Aramony from the payroll because “these issues are going to take longer than we thought to work out.”

United Way of America’s full 37-member governing board meets April 2 and hopes to hear reports from a law firm reviewing possible structural changes in the organization and from an investigating group examining Aramony’s tenure, DeCristofaro added.

The organization also announced that it had fired Thomas J. Merlo, chief financial officer, effective Friday. It said Merlo would receive no severance pay and is not eligible for retirement benefits.

Officials had said earlier that Merlo would be replaced. He was described as a longtime friend of Aramony, who hired him.

The 2,100 autonomous United Way locals around the country raise about $3 billion a year for 40,000 charitable agencies. The national organization’s $29-million annual budget comes primarily from participating locals’ dues--amounting to about 1% of their revenue.