Recently, the University of California Board of Regents put forth a proposal item, RE-61, which endorsed systemwide pay increases within the UC system, and was an attempt to deal with the growing need within the UC to improve the market competitiveness of job offerings. The proposal included three separate sections, the last of which is under much controversy.
‘One [of the items] was to establish goals to achieve market competitive salaries for all employees,’ explained UC spokesperson Noel Van Nyhuis. ‘The second was more of a regental administrative plan to change the way they review senior management salaries. And then the third part was the private funding portion that is getting most of the attention.’
This last section of RE-61 dealt with supplementing the salary increases of the top 42 UC executives with private donations from ‘friends of the university,’ who, according to Nyhuis, would like to see UC maintain its prestigious reputation.
The purpose of this section of the proposal is to reduce the burden of pay increases on the UC system by accepting private donations. As the only section of the proposal not to be sent for approval by the UC Board of Regents (the others were unanimously agreed on), Section 3 of RE-61 has been under a great deal of scrutiny.
One complaint that has been voiced against the proposal is that administrators are paid enough.
As Nyhuis described it, ‘It would put anybody in a kind of awkward situation to justify why somebody making $350,000 is underpaid.’
According to Nyhuis, however, pay increases are a necessity if the UC wishes to maintain its status as a top school.
‘The reality that we’re in is that in order to recruit some great talent and some great candidates for some of these top jobs, UC is having trouble flooring people away from other universities that can offer a lot more,’ Nyhuis said.
Nyhuis cited a study by Mercer, a career consultation group, in which systemwide UC salaries were 10 to 15 percent below comparable market salaries.
Although the Mercer study reported that UC jobs offer health benefits that ‘exceed the market median value by 10 percent overall,’ and retiree benefits ‘exceed the market median value by 63 percent overall,’ Nyhuis explained that these advantages, while bringing UC jobs to competitive levels, are temporary.
‘Looking into the future, we have to plan for the fact that health costs … are rising and will continue to rise,’ Nyhuis said.
Furthermore, Nyhuis said that for the first time since 1990, UC employees may need to contribute to their retirements as a result of a ‘growing numbers of liabilities.’ In other words, more people retiring means less retirement money for each individual.
As far as executive funding is concerned, Nyhuis said, ‘It’s about all UC employees. The number-one goal for this item is to ensure that all UC employees, everybody from service workers to faculty to administration is paid at market-level compensation.’
Some people have objected to the proposal on the basis that corporations may make donations to the UC system in hopes of influencing policies.
‘It’s worth wondering … what is the profit to business, whether they’re looking for influence within the UC system,’ said classics graduate student Ben Curtiss.
In response to such criticisms, Nyhuis said that the UC Board of Regents will need to discuss this fear if the bill does get far. Nyhuis did say, however, ‘They’re being very careful about how this one works. Essentially there would be limitations on how the money can be given.’
Donors would not, for example, have influence over who might fill a position if a candidate that the donor supported vacated his position.
‘People are giving into an endowment to ensure that certain leadership positions will be controlled by great candidates and UC will be able to maintain their top leadership,’ Nyhuis said.
Another fear, as expressed by UC Regent George Marcus, was that legislators in California will use the
proposed supplemental donations as justification to decrease public support for the UC system.
‘That’s definitely something that needs to be discussed,’ Nyhuis said. ‘I would imagine that that would be
a key issue in this particular recommendation.’
Regardless of whether the proposal is passed, state budget deficits will continue to harass UC planners.
‘Our abilities to hire and recruit and retain top leadership and top faculty and all the rest of the staff that UC depends on is really hampered by the state budget roblems,’
According to Nyhuis, we’ll find out what happens next in a month. The section is up for revisiting by the UC finance committee in November, from where it may or may not pass into the hands of the full UC Board of Regents.
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