In 1984 a plan by which the president, vice presidents, chancellors, UT Knoxville athletics director and UT Knoxville football coach were allowed to defer part of their salary, have the deferred funds matched dollar for dollar, and have the deferred account managed for them by the State was initiated. Vice presidents and chancellors were allowed to defer as much as 10 percent of their salaries. Athletics Director Dickey was allowed to defer up to $10,000, and Football Coach Johnny Majors was allowed to defer up to $30,000. The plan for the president, vice presidents, and chancellors was set up by a $1.5 million gift from Allied Signal Corporation (upon whose board of directors then-president Edward Boling sat). Funds for the matches for Athletics Department personnel were supplied by gifts to the Athletics Department. UT Knoxville Chancellor Jack Reese did not participate in the plan.
In 1989 Finance Commissioner David Manning indicated that state officials knew nothing about the plan and requested an explanation. The Tennessee attorney general issued an opinion that the plan was prohibited by state law, since the State had a deferred compensation plan for all employees that differed from the one for top UT administrators. Bill Johnson, chair of the UT Board of Trustees’ Executive Committee and Ben Kimbrough, chair of the board’s Finance and Business Committee, recommended to the board at its June 1989 meeting that the plan be ended. The board ended the plan and recommended that additional salary increases should be considered. In October the board increased the salaries of President Alexander, Chancellor Quinn, Executive Vice President Joe Johnson, and Senior Vice President Homer Fisher, using earnings from the Signal Gift Endowment.