Cal State panel OKs presidential pay freeze, letting groups chip in

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Once again addressing the controversial issue of executive pay, a panel of the California State University Board of Trustees voted Tuesday to freeze state-funded pay for new campus presidents but allow individual college foundations to raise funds to boost those salaries.

The nonprofit campus foundations would be able to augment taxpayer-funded pay for new executives up to 10% above that of their predecessor.

The policy would be reviewed in 2014.

Four members of the Special Committee on Presidential Selection and Compensation meeting in Long Beach voted for the change, with one member absent. The full board is expected to vote on the new policy Wednesday.

Chancellor Charles Reed argues that Cal State’s 23 campuses must offer competitive salaries to attract the most qualified candidates. Officials insist that the campus foundations will not divert money meant for scholarships, academic programs or other student services to supplement executive pay.

Trustee Lou Monville, chairman of the committee, said the new plan is a response to unprecedented state funding cuts, which have reduced annual support to the system by nearly $1 billion since 2007, as well as to an unprecedented turnover of seven campus presidents in the last year. Trustees still have three more positions to fill.

Trustees are also seeking to allay criticism over boosting executive pay at a time when they have raised tuition and cut enrollment. The issue sparked heated debate last July when the new president of San Diego State was awarded a salary of $400,000 — $50,000 of it from a campus foundation — at the same meeting when trustees approved a 12% tuition increase.

In March, two incoming presidents were awarded 10% hikes over their predecessors’ pay.

“I think this is a reasonable step,” said Monville. “The board has always tried to be responsive to concerns of the public and cognizant that we are a public trust.”

But Lt. Gov. Gavin Newsom, a trustee, said the policy sends the wrong message.

“It’s a de facto 10% raise, regardless of where it comes from, and it’s going to come from someone who could target that money somewhere else,” said Newsom.

Many faculty and students also questioned the move.

“They are trying to run it like a for-profit business, but we’re a public university, so it’s the citizens that are really paying,” said Liz Cara, a professor of occupational therapy at San Jose State.

She was among about 60 to 70 members of the California Faculty Assn. who protested outside the meeting over stalled contract negotiations. Last week, the group announced that 95% of its members approved a two-day rolling strike if bargaining fails.

Meanwhile, students at six campuses last week began a hunger strike, demanding that university leaders freeze tuition, roll back executive salaries and guarantee free speech on campuses. They and other students are expected to address trustees at Wednesday’s session.

At Tuesday’s session, trustees were briefed on several cost reduction and revenue generating strategies in case a tax initiative on the November ballot fails — triggering another $200-million budget cut. Among the options, although unlikely, are closing a campus, chartering one or more of the campuses to be independent of state funding by setting tuition high enough to cover the costs of education, and increasing student-faculty ratios.

Trustees said they would consider other ideas, such as adjusting contributions to employee health benefits and increasing fees for students taking more than 16 units, after they have gathered more input from students, faculty, staff and other stakeholders.