UC Hospital Administrators Get Big Raises : Regents: The controversial action follows an acrimonious board meeting. Coming after faculty pay cuts and hikes in student fees, ‘it looks terrible,’ one dissenter says.

Despite warnings that it would look terrible, a sharply divided UC Board of Regents voted in closed session Friday to approve hefty pay increases for some of the system’s best-paid administrators at the UCLA Medical Center and four other campus teaching hospitals.

The board voted 13 to 5 to boost the salaries of 13 top executives, while UC President Jack Peltason announced that he would give raises to another 14 lower-echelon administrators whose lesser salaries do not require board review.

In all, the 27 administrators--some of whom already get $150,000 to $200,000 a year--will receive raises averaging 21% over the next two years. At least two UCLA officials will be getting boosts of 45%.

The timing and magnitude of the raise package touched off more than an hour of agonizing and sometimes acrimonious closed-door debate among the normally staid board members. Dissenters said the increases were inappropriate because faculty members have been forced to take salary cuts, and the regents had just concluded meetings here Friday in which they publicly lamented state budget cuts and heard impassioned pleas from students not to raise fees again in 1994.

“It looks terrible,” said Regent Glenn Campbell, who voted against the increases. “The students will be furious. The faculty will be furious. And the alumni will be furious.”

Campbell dubbed the raises “David Gardner revisited,” a pointed reference to last year’s controversy in which the regents were roundly criticized for secretly awarding former UC President David Pierpont Gardner a $737,000 severance package.

Lashing out at his colleagues, Campbell, who holds a Ph.D. in economics and is the former director of Stanford University’s Hoover Institution, said more regents would have voted against Friday’s salary increases but “lost their nerve” after university administrators “filibustered” them during closed session.

“They want to be good fellows,” he said.

But regents and UC officials in favor of the raises stressed that the extra money--$734,000 a year--will come out of profits at the campus hospitals, not from state funds or student fees. The pay hikes, they said, are crucial to retaining the hospital officials in light of a 1992 salary survey that showed their counterparts at 218 comparable institutions were paid 22% more.

Clearly worried about a public relations backlash, Peltason, some regents and other top UC officials implored reporters at a news conference to put the raises in the “proper context” by saying campus hospitals are essentially private businesses that need top-flight administrators.

“This is a time of intense competition and our people are being offered, daily, the opportunity to go elsewhere, where their salaries could be doubled overnight,” said UC San Francisco Chancellor Joseph B. Martin, a physician himself.

UC officials, however, said none of the hospital directors have left in recent years because of pay issues.

Medical centers and teaching hospitals at UCLA, UC San Francisco, UC Irvine, UC Davis and UC San Diego employ 21,000 people and treat nearly 2 million patients a year. They are the second-largest provider of Medi-Cal services, behind Los Angeles County, and receive $60.2 million--or 4% of their budget--in state funds.

In the past, UC officials have kept hospital revenues separate from the system’s operating budget, which is fed by state funds, student fees and other sources of revenue. But last year, the regents agreed to divert $42.5 million from hospital coffers to pay off a loan that was needed to keep the university running.

Among the top-echelon administrators receiving raises is UCLA Medical Center director Raymond G. Schultze, whose current $212,000 salary will increase to $270,000 over the next two years. He remains the highest-paid director among the five campuses.

Two other UCLA officials, however, came away with the largest increases of the group. Finance director Ron King’s salary will jump nearly 45%, to $165,000, and marketing and planning director Mark Laret’s pay will increase nearly 47%, to $170,000. Four other officials, including Don A. Rockwell, director of the Neuropsychiatric Institute, are also receiving raises.

The 14 lesser-paid hospital administrators whose salaries Peltason said he will raise earn less than $130,000 a year, the threshold that automatically triggers board review.