The University of California on Wednesday announced a merit increase plan for non-unionized employees that seeks to fend off faculty hiring raids while mollifying critics of high executive salaries during the state's budget crisis.
Under the plan, all faculty with good performance reviews will receive 3% raises this year, and nonacademic staff, who have received no increases since 2007, could be in line for larger raises.
About 78,000 UC employees will be eligible under the plan, officials said. But nearly 400 employees — senior administrators and non-teaching staffers who earn more than $200,000 a year — will not be included.
In a letter released Wednesday, UC President Mark G. Yudof said he took the action out of concern over UC's ability to recruit and retain faculty, "who increasingly are being courted by competing institutions."
UC San Diego recently was rocked by the loss of three top scientists hired away by Rice University, a private institution in Texas, and UC administrators fear a further exodus of talent.
Yudof also noted that many non-teaching employees are working longer hours since the budget-related layoffs of co-workers, and said they also face higher costs than before for pension and health plans.
"Fairness dictates that we take this step," he wrote, noting that most faculty and non-unionized staff took one-year pay cuts in the 2009-10 school year. Two-thirds of those staff members earn less than $80,000 a year, officials said. (Although some UC union contracts are under negotiation, many unionized workers received modest raises in recent years.)
The increases and extra costs for pensions and health benefits will total about $164 million and will be paid for by state funds, student tuition, hospital revenue and research grants, UC spokesman Steve Montiel said. Facing steep cuts in state funding, the UC regents last month approved the second of two tuition hikes for this fall.
In excluding UC's most highly paid administrators from the increases, Yudof was almost certainly influenced by recent controversies about executive compensation at his own and other public universities. For example, last month critics blasted Cal State officials for paying the new San Diego State president an annual salary of $400,000, which is $100,000 more than his predecessor got.
State Sen. Leland Yee (D-San Francisco) has been a frequent critic of UC's executive salaries. On Wednesday, Yee's chief of staff, Adam Keigwin, said the senator was pleased to see the university concentrate on more moderately paid employees instead of the top echelon. Although it may not be the best time for any raises, excluding those at the top "seems to make sense in light of our current budget situation, " Keigwin said.