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Western New Mexico University President Joe Shepard, the embattled leader embroiled in ethics investigations over wasteful spending for the past year, announced on Friday he will step down early next year.

But Shepard, who will resign from his post on Jan. 15 and assume a president emeritus and faculty position within the School of Business on the Silver City campus, did not accept the terms of his separation agreement without commenting on the allegations of spending. These include foreign university trips with board members and his wife, ex-CIA agent Valerie Plame, purchases of high-end furniture for the president鈥檚 residence, and his daughter鈥檚 2023 wedding, held at the residence.

Friday鈥檚 meeting marked the third for the regents this month as they met to discuss matters surrounding the ethics investigations by multiple agencies, including the New Mexico Higher Education Department. The department鈥檚 secretary, Stephanie Rodriguez, called Shepard鈥檚 announcement 鈥渓ong overdue,鈥� but indicated that the university still has progress to make on ethics reforms and the state agency鈥檚 audit of the institution, which is still ongoing, could be completed soon.

鈥淚 have been and remain deeply troubled about the reports of gross negligence and mismanagement of taxpayer funds at Western New Mexico University,鈥� Rodriguez said. 鈥淭he health and stability of WNMU moving forward will require further examination and accountability.鈥�

The scandal began last December, when the news outlet Searchlight New Mexico reviewed the university鈥檚 financial records and found that Shepard, Plame and members of the board went on expensive foreign business trips and purchased high-end furniture for the president鈥檚 residence.

Board Chair Mary Hotvedt said on Friday that Jack Crocker, provost and vice president of academic affairs, could serve as an interim president while the board searches for a permanent replacement, but the temporary appointment is pending conversations with the board, a university news release said. Hotvedt said during the meeting that she would not step down as planned and would wait until the presidential search concluded.

Once the Searchlight story broke, Shepard reasoned that the trips were needed to boost recruitment of international students and the furniture would please donors, but the president soon faced questions from lawmakers about his spending. State Auditor Joe Maestas uncovered more than $360,000 for 402 instances of 鈥渆xtravagant鈥� travel and 91 instances of purchasing. He turned over his findings to the State Ethics Commission, which is reviewing the information.

On Dec. 12, the regents got an earful from members of the public calling on Shepard and the entire board to resign. In response, Hotvedt issued a prepared statement saying that despite complying with all audits as well as making policy reforms, Shepard and board members are being treated unfairly in the court of public opinion.

During Friday鈥檚 meeting, Shepard said the trips were elective and he notified the board; he paid for all expenses for the wedding and Plame鈥檚 university-issued credit card was approved by the board. Further, Shepard argued he was being defamed and he and his wife had not been afforded due process in the investigations. He even likened Plame鈥檚 situation of being in 鈥渢he uninvited spotlight鈥� to the time President George W. Bush鈥檚 administration outed her identity as a CIA agent.

Speaking virtually against the backdrop of campus, Shepard said he concluded the path forward is to 鈥渞emove myself from the equation and resign.鈥� It was not an 鈥渆asy decision,鈥� he added.

鈥淚 leave my post not in defeat, but with a deep understanding that it is the right thing to do, to advance that which I dearly love,鈥� Shepard said.

He thanked his supporters and said to his detractors, 鈥淚 hope you find peace.鈥� Shepard added he wanted to move beyond 鈥渢oxic鈥� feelings and move 鈥渂ack to compassion.鈥�

During Friday鈥檚 closed-door meeting, the board heard an update on possible personnel actions and discussed the contract. The board voted unanimously in public session to approve the separation and faculty appointment agreement between it and Shepard.

Shepard鈥檚 previous contract, provided to the Journal by the university, was signed in October 2022 and expired in June 2027. He earned a base salary of $365,000 per year, with a retention bonus of $50,000 beginning fiscal year 2022-23.

The new agreement, which the university provided Friday, said Shepard will receive a payment of $1.9 million when he resigns. As a faculty member, Shepard will earn a base salary of $200,000 a year for five years, with his salary increasing at the same rate as his future counterparts.

Shepard鈥檚 appointment as full professor to the business school will begin once his presidential term ends. He will teach two courses per semester. He could also take an eight-month sabbatical. At the end of five years, Shepard鈥檚 appointment will be subject to a post-tenure review.

Hotvedt said during the meeting that 鈥渘one of us were excited鈥� to enter into a separation agreement with Shepard. She said to the president directly, 鈥淚 can鈥檛 say enough good things about you.鈥�

But Brenda Findley, a former vice president of business affairs who later settled a whistleblower settlement with the university after she called out Shepard for spending, disagreed in an interview following the meeting, saying Shepard was bad for the institution and needed to go. She said she attended the board meeting because 鈥渋t鈥檚 fundamental to me鈥� to 鈥渇ollow through鈥� on these university developments, however long after her termination in December 2016.

鈥淭here鈥檚 no way he could continue in that role and be legitimate 鈥� and he knows it,鈥� Findley said. 鈥淭he only thing he could do at all was to resign and negotiate this (agreement).

She added, 鈥淚鈥檓 cautiously optimistic鈥� about the university鈥檚 future.