UC May Streamline Salary-Setting Process

The UC Board of Regents today will consider raises of $20,000 or more for each of its nine chancellors and $40,000 apiece for senior vice presidents, all of whom make more than California’s governor.

Six-figure salaries are always a touchy topic at a public university, which receives an annual infusion of money from state taxpayers.

Even so, the regents will also revisit the question of how much they, as defenders of the public purse, should be concerned about such salaries.

For the most part, regents subscribe to the idea that to maintain a world-class university system, they need to pay people top dollar.

Indeed, the competition can be ferocious for highly sought professors, scientists and researchers. UC’s nine campuses--the most prestigious public university system in the nation--are routinely raided by elite private universities on the hunt for influential scholars or rising stars.

Chairman John Davies says the Board of Regents should no longer waste its time approving salaries below $200,000. He will ask his colleagues on the 26-member board to leave such decisions to UC administrators.

As for salaries above $200,000, Davies says many of them can be dispatched by the board chairman, the chairman of the regents’ finance committee and UC President Richard C. Atkinson.

If Davies’ proposals are adopted, UC administrators could move more quickly with counteroffers of up to $200,000 because they would not have to win regents’ approval before making a deal.

The regents also will be asked to adopt a new compensation plan for the five UC medical schools that would improve the retirement packages for doctors, among the highest-paid employees in the UC system.

Dr. Gerald S. Levey, who runs the UCLA Medical Center and practices medicine there, commands the highest salary of any UC executive: $425,900. Most regents consider his salary a bargain, given how he keeps the center from hemorrhaging red ink, a costly problem afflicting many teaching hospitals.

Levey doesn’t receive the biggest paycheck, though. That honor goes to Frank Hanley, a renowned pediatric heart surgeon at UC San Francisco, who made $1,568,641 in 1998, according to UC documents. Another baker’s dozen of surgeons and medical specialists received $500,000 to $865,000.

Compared to those at other state agencies, UC salaries are generous. Gov. Gray Davis, for instance, makes $157,143 a year. California Chief Justice Ronald M. George earns $145,127, and Assembly Speaker Antonio Villaraigosa makes $99,000.

UC specialists and physicians-turned-executives at the system’s medical schools are in a different league from the usual academician.

“Every one of them could make more money in private practice and if they weren’t so involved in teaching and research,” said Dr. Lee Goldman, chairman of UC San Francisco’s department of medicine. “And there are scores of medical schools around the country that would love to give them more money, if they would go there. I know, I came from Harvard.”

The Columbia Business School recently mounted a successful raid on Berkeley’s Haas School of Business, persuading professor Stephen H. Penman to defect after 22 years there. How? It offered him $262,778 a year, a sizable jump from his $152,000 salary at Berkeley.

UC officials countered, getting the regents to bump his salary to $185,000. But it wasn’t enough.

Penman, an accounting expert admired on Wall Street, said, however, that his decision to leave was not prompted by a balky UC bureaucracy. “The university,” he said, “is having trouble matching the offers from private universities.”

Such faculty raids have prompted some regents to think that the university should lavish fewer dollars on top administrators and more on deans and professors.

“If we should be giving out money, we should be giving it to the assistant professors, not the top executives,” said Regent Velma Montoya. “They are not going anywhere.”

UC professors, excluding the higher-paid teachers of law and medicine, earn an average of $84,120 a year. The UC budget provided money for a 4.4% faculty raise this year.

Most regents defend high salaries for executives who run something as large and complex as UC, with its 173,000 students and 140,000 employees. The system’s budget is $12 billion--the size of the gross national product of North Korea.

“There are very few Fortune 500 companies of that size,” said Stanley O. Ikenberry, president of the American Council on Education and former president of the University of Illinois.

Yet corporate CEOs, he said, are paid “10 times as much as someone running a comparable academic institution.”

The salaries of university presidents and chancellors have climbed in recent years, Ikenberry said, as wealthy institutions have fought over “a shortage of experienced, talented leadership.”

Warren Fox, director of the California Postsecondary Education Commission, found in a study that the average salary of UC chancellors lags behind that of their peers. “Now that the recession is over,” he said, “salaries nationally are increasing.”

As president of the nine-campus UC system, Atkinson makes $310,900 a year. The regents have yet to formally propose whether he should get a raise.

Although UC is a state entity, it was set up in the state Constitution as an independent system to shield it from the politics of Sacramento.

So unlike in other state agencies, the UC regents have the power to set salaries. As a practical matter, though, such independence can be held in check by state lawmakers who hold some of the purse strings: $2.7 billion of the university’s annual budget.

That’s precisely what happened in 1992, when the regents were roundly criticized for permitting some administrators to live “regally” and allowing former UC President David Gardner and others to leave with extremely generous retirement packages.

Stung by critical audits and humiliating public disclosures, Regent Meredith J. Khachigian championed reforms that exposed salaries and benefits to greater scrutiny by the full Board of Regents and the public.

The proposals by Davies would erode one of those reforms, in that fewer salaries would come before the full board: only 28 of the 192 of more than $160,000 a year.

The regents would continue to approve the salaries of the university’s top officials, including the nine chancellors, Atkinson and his staff, and the directors of the three national nuclear weapons laboratories that the university manages.

Coincidentally, the regents today will begin to consider an 8.5% raise for the chancellors, whose salaries range from $229,000 (at UC Santa Cruz) to $323,300 (at UC San Francisco). The final vote is scheduled for September.

UC officials said those raises, ranging from $19,500 to $27,500, are needed on top of last year’s average raise of 18% to close the salary gap between UC chancellors and their counterparts at 26 comparable U.S. universities. Using the same comparison, UC officials are pushing similar or slightly higher raises for vice chancellors.

By extension, they argue that Atkinson’s two senior vice presidents in the systemwide office--Wayne Kennedy and C. Judson King--should be treated like chancellors of a medium-sized UC campus. Therefore, the argument goes, both should receive an 18.5% raise, tacking about $40,000 to their base salaries of about $220,000.

With only a rare exception, regents rubber-stamp such raises, Davies said. He sees little need to tie up staff time on salary proposals or pile on more paperwork for regents who receive briefing packets a foot or two high for each meeting.

If the board can streamline the way it does business, Davies said, it could cut three of its nine meetings every year.

“The meetings will be smoother and quicker, and perhaps we can focus more on policy,” he said.

Khachigian said she is untroubled by the proposals, provided that employees’ full salaries and compensation packages continue to be publicly reported.

“It’s still in keeping with the spirit of the reforms,” she said.

If the regents change their rules, the board would no longer be asked to approve--as they did in May--the $275,000 salary, plus a $50,000 “relocation allowance,” for Dr. Jan R. Radke to become UC San Diego Healthcare’s chief medical officer.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Pay Comparison

The University of California wants to increase the salaries of its top executives to bring them more in line with those of their counterparts at comparable universities. Below are current salaries.

University of California President Richard C. Atkinson: $310,900

UC Berkeley Chancellor Robert M. Berdahl: $271,400

UCLA Chancellor Albert Carnesale: $271,400

Stanford President Gerhard Casper*: $357,735

Yale President Richard C. Levin*: $350,000

University of Virginia President John T. Casteen III: $300,643

University of Michigan President Lee C. Bollinger: $295,996

* 1996-97 salary

Sources: Chronicle of Higher Education,

University of California, University of Michigan, University of Virginia