Monday, November 14, 2005

Leadership Living Large at the University of California

The San Francisco Chronicle published a series on how the leaders of the University of California (UC) system are compensated. (Links to the multiple articles are below).

In general, the proportion of system employees who made the largest salaries grew faster than total system employment. Total employment grew about 1% a year for the last two years. The number of employees with salaries greater than $200,000 grew 14.4% in 2004 (compared to the previous year), and 13.4% in 2005. Meanwhile, employees with the lowest salaries endured a pay freeze.

A report by Mercer Human Resource Consulting showed that UC pay for administrators was 15% lower than that at peer organizations. A University regent used the Mercer report to argue that "the senior folks at UC are under market, and there are a lot of bad things that can happen from that. You don't get a look at the best people in the market. It is almost like there is a Marxist notion that it is bad that we give raises to people to bring people to market rate."

However, the Mercer comparison only took into account salaries, not other monetary and non-monetary compensation. Yet, the Chronicle reporters noted that some top officials got more than even what UC dubbed their total compensation. A total of $871 million in bonuses, administrative stipends, relocation, and other payments went to 105,482 employees, with the bulk, about $599 million going to 8500 employees who got at least $20,000 more than their regular salaries.

These payments included special incentives for employees who took on extra work, e.g. an Associate Vice Chancellor at UCLA who got $37,000 as an "incentive award" in addition to a $183,400 salary; relocation allowances, e.g., the Dean of the UCLA Law School got a $270,000 housing allowance in addition to his $290,000 salary and payment of his moving expenses; housing and car allowances, e.g., the acting human resources director at Los Alamos National Laboratory got $83,383 for rent, car lease, and living expenses in addition to a salary of $161,000; administrative stipends, apparently yet another term for extra payments for some special administrative work; and revenue sharing, referring mainly to physicians who get a cut of the clinical revenue they bring in.

The article noted that ordinary faculty do not get extra money for taking on additional teaching duties.

Furthemore, some of these extra payments apparently were never subject to oversight. "Even UC regents typically don't find out about the extra pay. Although UC policy generally requires regents to approve salaries above $168,000 at public meetings, UC administrators are usually free to give employees other compensation on their own."

Some administrators also generated considerable "outside income," while they ostensibly worked full-time for the university. For example, the Dean of the UC - San Francisco Medical School, David Kessler, not only recieved $540,ooo in "total compensation," a relocation allowance of $125,000, and $30,000 for rent, but also earned "tens of thousands of dollars for serving on advisory boards for several firms, including Fleishman-Hillar, the public relations firm." In addition, the Chancellor of UCSF, Michael Bishop, "had more than a dozen sources of moonlighting income - including lectures, research, and consulting - in addition to his annual salry of $358,899."

Many officials had additional non-cash benefits. These included: free or subsidized housing, some of it palatial; jobs for spouses or significant others; and free entertainment, travel, and parties.

Top leaders live in university owned mansions, with all expenses paid and services provided by UC. At the very top, UC President Robert Dynes and his wife live in a 13,000 plus square foot mansion on 10 acres, with an extensive staff. The upkeep of the estate, including landscaping, cleaning, and hired help, cost $294,559 in 2003. Landscaping alone cost more than $19,000.

Although commonly justified by the need for these officials to entertain, the reporters noted that many of the lavish homes that house top UC officials are the site of only a few events a year.

During a time when the UC system sustained a 15% cut in state funding, increased student fees by 79% ($3429 to $6141) in the last four years, and froze salaries of lower level employees, these increasingly lavish salaries, other financial compensation, and perks suggest an organization more attuned to benefiting its top leaders than maintaining the morale of its other employees, and fulfilling its mission to its students and other stake-holders (including patients of its teaching hospitals and clinics). Furthermore, leaders splendidly isolated in their fully-staffed dachas may rapidly forget what the interests of ordinary students, patients, faculty, and employees might be.
Services cut for students as high-pay jobs boom 2,275 university employees earned more than $200,000 during the last fiscal year
Free mansions for people of means UC system spends about $1 million yearly on upkeep

UC piling extra cash on top of pay 8,500 top staffers pulling down at least $20,000 each in bonuses, compensation

Other perks include parties, gifts, travel

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