Raleigh, N.C. — North Carolina State University officials on Tuesday revoked a lucrative payout to former Provost Larry Nielsen, saying it wasn't approved by university trustees.

Nielsen stepped down as provost in mid-May, citing pressure over how he handled the hiring of then-first lady Mary Easley in 2005 and her promotion and raise in 2008.

Former Chancellor James Oblinger offered Nielsen, who plans to return to a faculty position in the university's College of Natural resources, a gradual reduction in administrative salary over the next three years instead of the usual six-month transition.

The deal would have given Nielsen an extra $142,000.

Oblinger resigned a week ago over questions about his role in Easley's hiring and Nielsen's payout, which was never presented to N.C. State's Board of Trustees.

Interim Chancellor Jim Woodward informed Nielsen Tuesday that he had voided the deal Oblinger offered and plans to drop Nielsen's salary to $156,715 in November.

When Nielsen was promoted to provost in 2005, he and Oblinger agreed he would cut his salary to that of a senior faculty member within six months if he left the administrative position within five years.

"Chancellor Oblinger did not have the authority to fundamentally alter the contents of the employment agreement ... without first getting approval of the Board of Trustees," Woodward wrote in a letter.

Nielsen hired Easley in 2005 to serve as executive-in-residence and senior lecturer at N.C. State, develop the Millennium Seminars speakers program and teach a graduate course in public administration and courses in the Administrative Officers Management Program, which provides leadership training to law enforcement officers.

He also oversaw her 88 percent raise last year, an increase N.C. State officials defended at the time. Officials said she had taken on additional duties, such as directing pre-law services at the university and serving as a liaison to area law firms and law schools at other universities as she developed a dual degree program.

Easley issue hangs over university

Questions about her hiring and promotion have dogged the university for months.

The day after Nielsen resigned, McQueen Campbell, a close friend of the Easleys who served as chairman of N.C. State's Board of Trustees, also stepped down amid questions over his role in Easley's hiring.

Hours after Oblinger resigned last week, the Board of Trustees terminated Easley's contract. The university's official position is that her position was eliminated because of state budget cuts.

Oblinger will appear Wednesday before a federal grand jury investigating the dealings former Gov. Mike Easley had with friends and contributors while in office, said Oblinger's attorney, Press Millen.

"He's been asked to be there (Wednesday). He will be there. He is cooperating in every way. He will go there and answer any questions they have," Millen said.

The grand jury last month subpoenaed Oblinger and Nielsen and asked that the university turn over all records related to the employment of Mary Easley.

It's unclear when Nielsen will testify before the grand jury, which also is examining Mike Easley's travel records, vehicles provided to the former governor and his family and a coastal land deal.

Interim chancellor embraces openness

Woodward said Tuesday that he is fully aware he has inherited a university in crisis. He was formally introduced to the campus Tuesday in a ceremony at Talley Student Center.

"We will get past this bump – it is more than a bump, but (it's) temporary," said Woodward, formerly chancellor of the University of North Carolina-Charlotte.

"My job is to ensure that every day we do something that helps re-establish the trust that the people of North Carolina have long had in this institution," he said.

Woodward said that he plans to operate the university in a way that will stand up to any possible scrutiny.

"Words such as 'transparency' and 'openness' are more than words," he said.

Students said Woodward's appointment signals a new day for N.C. State.

"I think students are ready to move forward from the controversy, and I think this event marks an opportunity for us to do that," Student Body President Jim Ceresnak said.