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UC Regents Address Compensation Issue By J. DOUGLAS ALLEN-TAYLOR

Tuesday December 20, 2005

The UC Board of Regents moved this week to try to stem the bleeding in public confidence over its secret employee compensation packages. 

The board announced Monday the creation of a permanent Regents’ committee on compensation, initiating an independent audit going back 10 years and releasing the names of business, government, media, and education community members of a task force previously recommended by UC President Robert Dynes to look into the compensation issue. 

Both the task force and the auditors will report directly to the regents. 

“The regents recognize the University of California’s unique public trust,” Regents’ Chair Gerald Parsky said in a released statement. “While UC must maintain its ability to compete with top universities across the nation for outstanding researchers, teachers and administrators, we must do so in ways that are transparent and understandable to the public. These actions set us on the road to achieving those objectives.” 

The crisis began in mid-November after a series of articles appeared in the San Francisco Chronicle charging that many highly paid university employees were getting additional compensation packages not publicly reported by the university. 

The Chronicle reported that UC employees “received a total of $871 million in bonuses, administrative stipends, relocation packages and other forms of cash compensation last fiscal year,” with $599 million in such “extra compensation” going to 8,500 employees last year “who each got at least $20,000 over their regular salaries.” 

In response, a coalition of UC Berkeley and UCLA professors began circulating petitions calling for an independent investigation into the high-end compensation packages. 

In a telephone press conference Monday, Parsky said that the regents were “committed to public access to and awareness of all of the regents’ decision-making actions.” 

Parsky said the regents’ actions were designed to look both backwards and forwards, with the independent audit looking to see if the university has followed policy in compensation matters over the last 10 years, the task force reviewing present compensation policies and making recommendations for proposed changes, and the permanent regents compensation committee providing ongoing oversight. 

UC President Dynes said that he was “in full concurrence” with the regents’ actions, saying that while the university “must remain competitive” on the issue of salaries and compensation, “we are a public institution and a public trust. When there is less than total public confidence, we must regain total public confidence.” 

Dynes has already initiated an internal review by the university auditor of university academic hiring practices. 

As a first step in addressing the compensation problem, the regents have authorized a task force co-chaired by former California state Assembly Speaker Robert Hertzberg and Regent Joanne Kozberg to “review the current regents’ compensation policies and practices for faculty and senior managers, and recommend appropriate changes, if needed,” as well as to “review current disclosure policies and practices, and recommend appropriate changes to achieve the university’s responsibilities as a public institution while also protecting the personal privacy rights of university employees as required by law.” 

The task force was recommended last month by President Dynes. 

Named as additional task force members were former California State Senate and Assembly member Dede Alpert, UC Academic Council Chair Clifford Brunk, University of Michigan president emeritus James J. Duderstadt, Apple Oaks Partners, LLC managing partner B. Kipling (Kip) Hagopian, former San Jose Mercury News publisher Jay T. Harris, UC Regent Monica C. Lozano, and National Association of College and University Business Officers CEO and former Cornell University senior vice president James E. Morley, Jr. 

Last month, UC Berkeley Education and Public Policy Professor Bruce Fuller, one of the leaders of the professors’ petition movement calling for an independent investigation into the secret compensation packages, had said that task force co-chair Robert Hertzberg had asked the protesting professors to make recommendations to the task force, though Fuller said Hertzberg had not committed himself to placing any of those recommended names on the panel. 

Asked during this week’s press conference if the professors had made any recommendations or if any of those recommendations were named, task force co-chair Joanne Kozberg said that regents had held conversations with Fuller to “discuss the qualities of the persons that should appear on the task force,” and specifically noted that Academic Council Chair Brunk had been named to represent the professors’ interests. 

Fuller could not be reached for comment for this article. 

Parsky said that the independent audit of the university’s compensation practices over the past ten years will be handled by a special team from the university’s existing auditors, Price Waterhouse. 

In announcing the creation of a permanent regents compensation committee, Parsky said, “Committees on compensation issues are standard practice on most corporate and non-profit boards. It is our fiduciary responsibility to provide the same level of scrutiny and oversight over compensation matters at the University of California.”