We were also facing just the beginning of an economic downturn and students were facing decreasing numbers and a double-digit student fee increase.
I raise this recent history, because history repeats. It is now a year later. Instead of the AFSCME service workers embroiled in labor strife, it is the UPTE researchers and lab assistants.
The students once again are facing a 9.3% fee hike UC-system wide. And UC Davis now has a new Chancellor, Linda Katehi. She has an announced salary of over $400,000. That’s about $100,000 more than her predecessor Larry Vanderhoef received.
Davis Enterprise columnist Bob Dunning makes the point in his Tuesday column:
WHATEVER THE MARKET WILL BEAR – showing impeccable timing, the University of California Board of Regents substantially raised the salaries for two new campus chancellors at the same time they raised student fees for the 10-campus system – same day, same meeting – and while the argument is that new UC Davis Chancellor Linda Katehi is so brilliant she could have made millions more than her $400,000 salary in the private sector, it’s still an odd time to be throwing such numbers around –
And never mind that defensive and pre-emptive statement from the office of the UC president that claims Katehi’s salary is substantially below the median of $628,000 for chancellors at a ‘comparison group’ of campuses allegedly comparable to UC Davis – based on my ‘comparison group’ of newspaper columnists whose opinions I respect, I should be making $400,000 a year, too –
I have no doubt Chancellor-to-be Katehi is a superstar who could command a much higher salary at another university or in private enterprise, but we have the compensation formula exactly backward – in times of economic distress, such as those currently faced by our nation, our state and our beloved university, the question is not what Dr. Katehi is worth, but what can we afford – after all, we had 15 truly superb years of leadership and scholarship under Larry Vanderhoef and he topped out at $315,000, clearly far less than what he’s worth as well, but proof that talented folks are available to do the job at well below $400,000.
In my opinion, while Mr. Dunning may have been too nice calling the new Chancellor a superstar given we know very little about her, I think he’s exactly right, it is not what people are worth, it is what we can afford.
During the UPTE presentation on their worker conditions they presented a statistic that still stands out to me.
“A 20% pay cut to UC’s 400 top executives would save $24.4 million…”
Do the math there and you realize that 400 top executives are getting over $120 million, that is nearly three times what the same number of city employees are getting in Davis.
What is UC facing? Student groups are questioning the necessity of the Regents desire to raise tuition while at the same time giving hefty raises to new Chancellors.
As Jelger Kalmijn, statewide President for UPTE and Senator Leland Yee wrote earlier this week:
“Legislators have stepped up calls to reign in the pay of top administrators. Despite public outcry over the compensation of UC executives, the Regents continue to award bonuses, perks and hiring of executives earning in excess of $450,000. Lawmakers intervened two weeks ago when the Senate Education Committee approved Senate Bill 217 (Yee), which will prohibit raises for top executives in years in which the UC receives less state funding.
Furthermore, the scrutiny the Regents expected to face was heightened last week as they approved the appointments, and pay, of new Chancellors in San Francisco and Davis. The pay for both represented dramatic increases over the pay of their predecessors: a 12% pay hike for the San Francisco Chancellor and a 27% pay hike for the Davis Chancellor. The Regents also released their annual report on the compensation of UC executives.
Yet the fiscal mismanagement of the Regents goes beyond the pay increases to executives. The university is facing a budget gap of $437 million over the next two years. This annual gap of $225million represents just 1.2% of the UC budget. However UC’s reserve funds, most recently reported as 6 billion dollars, are enough to fill the gap for the next two decades. Additionally, the University expects to receive hundreds of millions of dollars from the federal stimulus package in increased research spending.”
In a time of budget deficit, why are we filling new Chancellor positions with pay increases over predecessors? During these economic times, is there really a market for University Chancellors that dictates these kind of pay increases? Can they really get more elsewhere right now?
Mr. Dunning’s point reverberates across all of public employee compensation issues. It is not about what people are worth. I think teachers deserve far more than what they are getting. In the abstract it would be nice to continue to pay public safety officials handsomely, the problem is that we simply cannot afford it right now. Teachers across the state have been laid off. And more will be laid off.
But while we are laying off over 5000 state workers, many in the corrections field yesterday, as we are cutting another $21.4 billion after cutting probably $36 billion in February, maybe we ought to be more cognizant before we dish out $400,000 jobs to chancellors at a time when UC is in deficit and increasing the burden on the students.
Maybe we need to understand somehow and someway that we simply cannot continue to do business as we once did. Not now and maybe not ever. The rules of the game have changed and we must stop this brinksmanship. We have to be able to hire quality people at $300,000 to lead a university campus. It is inconceivable to me that we cannot.
There are high stakes here. As I mentioned yesterday, one Governor’s candidate wants to cut 30,000 state employee position jobs as a means to balance the budget. The numbers do not add up, but she makes a point, that state employment is under fire. The problem is that she is lumping in those who get 30,000 with those getting six figures and those getting a very high six figures. We certainly need to reign in the salaries at the top. We need to stop giving out these kinds of raises when we are in fiscal dire straits and until we do that, all state workers are going to be a target.
But we are not going to balance the budget on the backs of state workers–the numbers are not there to support that. Every job we cut is going to harm the economy and our budget deficit anyway. And it is going to close off California to vital services.
We must be smart about how we go about doing this. We can be smart by hiring smart. In the scheme of things, $400,000 is nothing. But in terms of the message it sends about priorities it is loud and clear and if I were still a student, I’d be outraged at this.
Everyone is celebrating the new chancellor, but to me Linda Katehi is already stained with the blood of students in the proverbial sense. You only get one chance to make a first impression and here she is yet to be seated and she has already been Vanguarded. Welcome to Davis.
—David M. Greenwald reporting
I guess that the students are not the priority at UC. The campus status and the employees’ salaries are all that matter. And don’t forget the employees’ pension plans! UC Davis needs to have an incentive of educating students for research and for the ability to get jobs, but that criterion is never mentioned when the salaries are increased. The Chancellor gets a huge salary and the workers get wages without having to do anything. They could sit and do nothing and get paid because there is no reviewing committee; they police themselves.
There is no doubt the new chancellor could easily find savings equal to 100X her salary if she wants to focus on that. There are too many administrative non teaching jobs. I hope the new chancellor takes some positions – the last one spent all of his time trying to be politically correct.
Another thing I have noticed is that very few of the top UCD jobs are being filled with internal candidates – why is that?
Our education process is failing relative to the rest of the world. I hope education gets some attention.
“There are high stakes here. As I mentioned yesterday, one Governor’s candidate wants to cut 30,000 state employee position jobs as a means to balance the budget.”
I would suggest the positions to start cutting are upper management first and foremost. After all, the state will save more money cutting Yudof’s position than cutting some state worker making peanuts! Yudof’s salary represents the salary of about 20 to 25 state workers. Think about it! And I’ll bet we won’t miss Yudof as much as we’ll miss the 20 to 25 state workers.
As I said before, these upper management salary increases add up, and in the aggregate represent a huge amount of money. Take a look at the the city budget, and how much upper management is contributing to the fiscal mess the city is in. This nation cannot sustain the sort of unbridaled “keeping up w the Jones’s” mentality that has been going on all over this nation. The problem is the people are starting to get it – but I’m not sure the politicians do. If they don’t, we need to vote them out, out, out.
Good article David. I am so disgusted by this I am going to write a letter to the incoming chancellor and to legislators. I applaud Senator Yee for his efforts.
“Itoldyouso” got it right about upper management salaries…take a look at all upper administrative salaries throughout the state. They all could be reduced significantly.
But the UC system in particular is partnering with business to the extent that actual academic research is being co-opted by outside influences for money.
Continuing along this road will only weaken education.
“Do the math there and you realize that 400 top executives are getting over $120 million, that is nearly three times what the same number of city employees are getting in Davis.”
And I would gladly have the people who are running one of the nations foremost systems of public universities be paid three times the amount that a similar # of employees are paid here in the city of Davis. The UC contributes more to California than the services provided by 3 city of Davis staffs. Hell, when you put it like that, it looks almost to be a bargain.
Now that we’re done complaining about executive compensation, can we start to look at the real issues of our Republican Governor and the Minority Repbulicans in our State Assembly and Senate, who have consistently refused to accept tax increases and have even attempted to raid dedicated proposition funds with these latest ballot initiatives. We’ve got Nero on Line One, and he has a rather thick Austrian Accent.
Finally, there is a significant amount of internal review and cutting going on, but at least within my arena that means that vital student services are going to be reduced, because the funds just aren’t there. However, lets consider the alternative. Lets look at a situation where the UC decided, “Alright, we have this deficit, but we aren’t going to raise fees one dime, because we care” (all sarcasm aside). This situation would force significant layoffs in all areas of the university, from mental and physical health to classes and even potentially majors being pruned down, with reductions in professors and faculty on all fronts and laying off student employees as well. Yes, it definitely does suck that these fees are increasing significantly, but in all fairness, their hands are tied. The UC even refused to include a fee increase when it voted on its budget several months back b/c they wanted to indicate to Sac that they didn’t want to have one, but since Sac wouldn’t cover the difference, the burden now rests heavily on the backs of students.
Also, one last thing to keep in mind before criticizing Katehi’s pay “increase” is that in comparison, as Provost of the Urbana Champaign campus of the University of Illinois, she was making $356,000. I used a simple web calculator and compared the cost of living in Champaign, IL to Sacramento, CA. The Cost of Living increase? 13.5%, which put the comparable salary at over $400,000. So yeah, if ANYONE was going to be paid Vanderhoefs 315K, it would be a significant pay cut especially since they have to move to a more expensive region. And that is before considering that Linda was already being paid more than the Hoff at her current job.
“Also, one last thing to keep in mind before criticizing Katehi’s pay “increase” is that in comparison, as Provost of the Urbana Champaign campus of the University of Illinois, she was making $356,000. I used a simple web calculator and compared the cost of living in Champaign, IL to Sacramento, CA. The Cost of Living increase? 13.5%, which put the comparable salary at over $400,000. So yeah, if ANYONE was going to be paid Vanderhoefs 315K, it would be a significant pay cut especially since they have to move to a more expensive region. And that is before considering that Linda was already being paid more than the Hoff at her current job.”
Doesn’t the university give the chancellor her own residence in University park (next to the I-House)? What’s that worth? And would that be in addition to salary?
I suggest that above a certain income level it is meaningless to argue about comparable salaries by region. Especially when foreclosures and loss of housing values are greater in the Sacramento area anyway — we are currently on a downward trend. Clearly looking at salary ranges less than $100K merit consideration for cost of living differences. At an extreme end, arguing a salary difference between $3 million and $4 million based on cost of living by region is quite ridiculous. But even at a range of $300K to $400K (especially if you factor a weakening economy) that argument begins to feel really weak to me.
“WHATEVER THE MARKET WILL BEAR – showing impeccable timing, the University of California Board of Regents substantially raised the salaries for two new campus chancellors at the same time they raised student fees for the 10-campus system – same day, same meeting – and while the argument is that new UC Davis Chancellor Linda Katehi is so brilliant she could have made millions more than her $400,000 salary in the private sector, it’s still an odd time to be throwing such numbers around -“
This is low. Accepting this obsene salary while hiking student fees. If the chancellor is getting $400,000 she ought to have a difficult time sleeping at night, but she doesn’t. What she is getting is criminal.
That is where the bulk of the protests would be wise to address.
-DGM
What’s wrong with working hard and then asking for a raise? That’s the way I thought it was supposed to be done.
Looks like we live in the age of entitlement.
Isn’t this what happened to Vanderhoef’s predecessor, Ted Hullar? Saw student fees rise, but kept perks for himself?
Skeptic: A raise from an already obscene salary, paid for by the student. There is no way those people work hard enough to get that kind of $.
I didn’t read Skeptic’s comments as defending the salary.
Curious, You are right.
Davis Enterprise Sunday editorial touches on this same issue. They defend Katehi’s salary.
subscription/password required:
[url]http://www.davisenterprise.com/story.php?id=601.0[/url]
Beginning excerpt:
“A mini French revolution is happening right here in Davis! What, the newly hired chancellor of UC Davis will earn $400,000 annually? That’s an outrage.
ON THE WAY to this revolution, however, let us point out a few facts. The city of Davis budgets $237,754 in total compensation for its city manager. The superintendent of the Davis Joint Unified School District earns $226,250, including benefits and a car allowance. Davis’ police and fire chiefs each earn $176,982 in total compensation.
An amazing 72 employees in the city of Davis earn $100,000-plus in base salary and overtime, including 38 members of the Davis Fire Department. A typist for the city of Davis can retire at 55 with lifetime health benefits.”
I had almost the same discussion yesterday morning at Farmer’s Market, the vacuum argument is basically the competitive wage argument, you need to hire someone at a high price in order to stay competitive and get a top notched candidate. I’ve never seen any kind of empirical study that backs up this argue that there is actually a quantitative difference in performance based on hiring a higher salary. Meanwhile the argument is used to justice a proverbial arms race mentality that drives salary well beyond what we can actually afford. Dunning is right and whomever wrote this for the Enterprise is wrong. When you are forcing early retirements and raising tuition for students, it’s not the time to hire the top dog at huge salaries.
Disappointing but not surprising that the Enterprise would defend this. Two weeks ago they called this a great hire in an op-ed. What was their basis for this declaration? I don’t know but they quoted some of the people that hired her. Did they examine her record and research it? I doubt it. Yet they felt informed enough to call it a great hire. I was tempted to respond to that, but I don’t know if she is or not a great hire. I do know that we are once again sending the wrong message by doling out a huge salary during times of budget cuts.
The Enterprise editorial lacks a solid argument. From my reading of it, it goes in summary,
“sure, lots of public employees around here are earning sizable salaries, but they’re good folks doing a good job, so get over it. Let’s reform the system a different way (without suggesting that different way).”
When you are a UCD parent or student writing checks for fees, books, and living expenses, most of which are rising (definitely the student fees), and possibly your family has faced some cutbacks in income, it leaves a bitter aftertaste to remember that the chancellor’s salary has increased. And that there really isn’t the shared sacrifice one would hope for in these times.
The chancellor is the most visible executive on campus. Her/his actions are scrutinized for signs of leadership and example. The biggest challenge of the career for her and all administrative public servents in these times will be to minimize the impacts of the budget cuts, and to rebuild quickly and effectively when the crisis passes. Maintaining good morale (as is possible) is important.
I have heard that the top DJUSD administrators will take voluntary cuts, to be announced this Thursday. That is a move in the right direction for these times.
The Enterprise shouldn’t have even printed that rediculous non-justification. What were they thinking! They make it appear as if they are friends with these administrators or something.
“sure, lots of public employees around here are earning sizable salaries, but they’re good folks doing a good job, so get over it. Let’s reform the system a different way (without suggesting that different way).”
My god Enterprise! You can’t be serious! Please tell me you did not actually write this! “so get over it!” This is a slap in the face nearly everyone. Then the Enterprise has decided this woman “did a good job.” Define good job enterprise.
Hopefully the enterprise will get some hate mail from its readers for that.
“sure, lots of public employees around here are earning sizable salaries, but they’re good folks doing a good job, so get over it. Let’s reform the system a different way (without suggesting that different way).”
Just to be clear, that was my paraphrasing summary of their editorial.
And the Enterprise wonders why it is in financial difficulties? It is all about defending those in power at all costs. Shame, shame, shame! What, are they going to get a kickback from UCD for this article?
Huh:
They write:
[quote]Yes, Katehi will be paid a huge salary, but how does that compare with those mentioned above? We suggest her impact on the university and the Sacramento region could be enormous. She has a track record of building collaborations between academic researchers and industry representatives, and she’ll undoubtedly attract start-up companies to Davis and the surrounding communities. That means jobs and revenue. [/quote]
Obviously they are homing they bring in new start up companies and force more development in the town to bring in more advertising revenue and subscribers to save them from themselves.
WDF I see what you are saying, nevertheless, I saw the Enterprise garbage it was a lame justification. And yes I do wonder if the Enterprise is getting a kickback for this. Also, I think you should keep in mind the Vanguard uncovered the linkage between TSS and that Enterprise reporter. Jeff Hudson I think was his name. A crooked deal.
I get a $1000 a year increase in my fees. The Chancellor gets a $100,000 raise.
Smart students who cant afford these fee increases are leaving UC Davis. I have seen it first hand. By working close to full time, more students will drop out! Where is the respect from the UC Office of the President to the students?
Could any possibly call this fair?