There has been a lot of talk about incoming UC Chancellor Linda Katehi and what seems to get overlooked due to the scandal surrounding her alleged admissions policy shenanigans are the huge pay increases and perks Linda Katehi will be receiving from the UC Regents while student fees climb another 9.3% this year.
Excessive executive compensation has been in the news a lot lately from AIG to the Auto Industry, but when it happens in a public institution like the University California it gets nowhere near the public outcry.
All the while students and taxpayers will be paying for our new, more expensive Chancellor we will still be paying Chancellor Vanderhoef his current salary to take administrative leave on the condition that he comes back and serves one year as a tenured professor. Great, not only do we get to pay out the nose for a new Chancellor, but we get to pay for the old one to go on vacation. One for the price of two!
All these raises happen in spite of the fact UC fees have doubled over the last ten years, excluding the recent 9.3% hike, even though the Regents and the University continue to cut back on services, hand out thousands to executives, and try to find new ways to cover their costs.
None of this is new information. It has been in the news and nothing has happened. Senator Leland Yee recently proposed an amendment that would bring the UC system under the control of the State Legislature. While that would be inadvisable – just take a look at the Legislature during budget season – it highlights the need for more accountability in the UC Board of Regents.
I would like the ability to recall Regents, as they are currently untouchable and far out of the reach of California voters. Eighteen of the twenty-six members of the Board are gubernatorial political appointees riding out a twelve year term. Letting the voters have some say in the system would put a check on some of the more interesting decisions the Regents make.
Everyone wants to blame the Regents and the State Legislature, and although I used to agree with that feeling I have begun to realize that we are very quietly being taken for a ride. It seems to be in poor taste for Chancellor Vanderhoef to take full salary on vacation while students are asked to pay 9% more a year. On that note shouldn’t Chancellor Katehi feel a little guilty about taking slightly more than a 25% pay raise from what her predecessor received?
With Cal Grants and other sources of aid at risk from year to year and costs only increasing maybe they should give a little back to the students who are hurting most from the fee hike. Chancellor Vanderhoef can give back half of his vacation salary and Mrs. Katehi can give back the $85,000 increase she got from the Regents to do the same job Mr. Vanderhoef had been doing. If either of them did that I would feel a lot more respect for both of them.
There are far more solutions to the problem than those I mentioned, and what we need is for more people to think about how to improve our system. What is obvious is that our top tier public education system is in trouble and complaining about the Regents and the Legislature making bad choices just won’t cut it anymore.
All the figures featured in this column are from the sources below:
http://www.universityofcalifornia.edu/news/article/21123
http://latimesblogs.latimes.com/lanow/2009/05/uc-regents-approve-student-fee-increase.html
http://www.dateline.ucdavis.edu/dl_detail.lasso?id=11324
Jack Zwald is a Junior International Relations major, Chinese minor at the University of California, Davis. He currently serves in the Senate of the Associated Students and as the Political Director for Davis College Democrats. He’s always looking for feedback, feel free to shoot him an email at jozwald@ucdavis.edu about the column or anything in general. Egghead is a weekly column for the Vanguard.
You forgot to mention the most recent round of salary increases to two dozen top UC execs! Shameful –
You also forgot to take the ~10% furlough (essentially a pay cut because senior administrators can’t take an equivalent time-off) into account which pretty much wipes out Katehi’s salary increase from her previous position.
Students pay more for less not because of how the Regents run UC, but primarily because the taxpayers are not willing to subsidize UC education as much as they used to. Somebody has to pay to keep the universities running. While there are operational inefficiencies that should be gotten rid of during this budget crisis, UC can’t be blamed for moving to reduce its dependence on the unreliable state funds and become more like a private entity. To achieve that, campus like UC Davis needs a high-profile Chancellor who will most certainly pay for her salary and more by bringing in private and federal monies.
“To achieve that, campus like UC Davis needs a high-profile Chancellor who will most certainly pay for her salary and more by bringing in private and federal monies.”
You have no idea how much money, if any, Katehi will bring in.
“Somebody has to pay to keep the universities running. While there are operational inefficiencies that should be gotten rid of during this budget crisis, UC can’t be blamed for moving to reduce its dependence on the unreliable state funds and become more like a private entity.”
So you have no problem with the most recent round of raises to the top 2 dozen execs, who are already making more than $250,000 a year, at the same time students are being soaked, and faculty/staff are being furloughed and/or are taking paycuts? I find this sort of thing outrageous, and an attempt to reward the wealthy with more wealth at student/faculty expense.
[i]You have no idea how much money, if any, Katehi will bring in.[/i]
Some people may not quite realize it, but what they are really asking for in harping on Katehi’s salary is to have half of a chancellor instead of a whole chancellor. The median salary in the United States for chancellor of a public research university is 5% more than Katehi’s salary. She was already brought in below the market rate, and that’s not counting the extra pay cut for this year.
If the state cuts payment to UC Davis by $100 million, Katehi or any new chancellor had better try to find money elsewhere. We very badly need a chancellor, not just half of one, for that reason among others. Even if she didn’t have a track record in fundraising, she had better try. In fact, Katehi certainly does have a funding track record as Dean at Purdue and as a researcher in engineering. There is no reason to believe that she would stop doing what she’s been doing when she comes to Davis.
The argument has been, why do we need to pay Katehi more than Vanderhoef. The reason is the same: No one wants to poach Vanderhoef because he wants to retire. He has only been half of a chancellor through this entire crisis. Most of the decisions and even most of the announcements have come from Provost Lavernia instead. But a provost will only have less clout than a chancellor with either UCOP, or with the state legislature, or with donors. Again, we desperately need a whole chancellor, not just half.
The other theory has been, maybe we could promote some local professor who would serve as a whole chancellor, but only get paid as half of one. To be sure, he’d still be well paid. Maybe we could pull that off temporarily, but it wouldn’t last. Either he would get a much better job offer in another state, or he’d be a chancellor that other universities wouldn’t touch with a ten-foot pole. It’s true that university management salaries have gone up a lot, but that’s because of their mobility in the job market; that’s a fact that UC can’t change.
I hope that Jack Zwald can understand that his fees are going up by $1,000 because the state cut funding by $4,000 per student. His fees are not going up because Vanderhoef was paid $10 per student and Katehi is paid $12 per student. And I hope that he can see the need for Davis to have a whole chancellor and not just half of one.
[i]So you have no problem with the most recent round of raises to the top 2 dozen execs[/i]
Except for the facts, I might agree with you. Nanette Asimov scanned a list of hundreds of managers on all 10 UC campuses, and found a couple dozen who got raises. This is not “the top 2 dozen execs”, and she only mentioned one who is at Davis.
Should UC tell the entire roster of managers, “You’re all losers because of this crisis, not one of you gets a raise”? Asimov wasn’t satisfied that most of them didn’t get raises; she really wanted it to be none. But announcing that nobody gets promoted and nobody gets a raise is not the way to keep things running. Yes, all of the faculty got furloughs including me, but thankfully they didn’t tell us that no one will be promoted.
“Some people may not quite realize it, but what they are really asking for in harping on Katehi’s salary is to have half of a chancellor instead of a whole chancellor. The median salary in the United States for chancellor of a public research university is 5% more than Katehi’s salary. She was already brought in below the market rate, and that’s not counting the extra pay cut for this year.”
Isn’t this the same problem as the police and fireman compensation? Doesn’t comparing/matching pay to like jobs in other locals in a public or partial-public business cause an artificail ratcheting up? UC and CSU compensation has increased far more that the rate of average wage inflation.
The problem here is the lack of a compensation contraction mechanism that exist in most non-union competitive private-sector markets. For private-sector executives, the trend for the last couple decades has been to increase the at-risk portion of the total compensation. When the company is less profitable the executives pay tied to performance bonus is less. In hyper competitive markets, profitability comes from either being successful in a niche market, or otherwise providing a higher quality product or service at a lower price.
UC education costs have skyrocketed and I don’t think the quality has improved. I would like to see the UC regents get progressive on compensation and tie a large chuck of Katehi’s and other highly-compensated UC employees’ pay to measurable performance goals. For example, how about reducing the cost of tuition by 5% in 12 months.
[i]Isn’t this the same problem as the police and fireman compensation? Doesn’t comparing/matching pay to like jobs in other locals in a public or partial-public business cause an artificial ratcheting up?[/i]
It’s only the same problem if firemen or police are leaving Davis for those other localities. If they have the mobility, then there’s nothing artificial about the problem, it’s a real market rate.
[i]The problem here is the lack of a compensation contraction mechanism that exist in most non-union competitive private-sector markets.[/i]
If you think that executives at private research universities are paid less than executives at public research universities, it’s not true. They’re paid more.
[i]When the company is less profitable the executives pay tied to performance bonus is less.[/i]
That’s partly true, but it is very far from the whole truth. If you look only at the CEOs of those Fortune 500 companies that declared bankruptcy last year, they were paid more than the CEOs of Fortune 500 companies 30 years ago that were profitable. A lot more, even after you adjust for inflation and economic expansion. Many CEOs of bankrupt companies still get big performance bonuses.
The truth is that CEOs have a lot more mobility than they used to, and a lot more control to set their own salaries. That is why private-sector CEOs get paid many times more than university presidents, even for the same size of institution. University presidents have more mobility and more leverage than they used to, but not nearly as much as in for-profit companies.
[i]UC education costs have skyrocketed[/i]
If you have in mind the last 10 years, it’s just not true. Fees plus state money per student have gone down in the past 10 years in constant dollars, not up. This year is an extreme example of that. The state cut its support by $4,000 per student, and fees went up by about 1/4 of that.
Tying Katehi’s pay to performance goals is an interesting proposal, although I’m not really in favor it. Rich Rifkin suggested something similar. She would be paid much more if you did this. For instance if you gave her a 2% commission for fundraising, she could be paid millions.