UC Regents vs. ACA 24
Since California is in serious budget crisis mode, the UC system is bracing itself for a huge cut in funds ($1 Billion cut to UC/CSU over 3 years). Every once in a while I get an email from Mark Yudolf and the UC Office of the President. In one of those emails, the following was said:
“Salaries for senior managers have been frozen, and the highest-level leaders, including myself, are taking a 5 percent pay cut.”
Mark Yudof and Arnold Shwartzenagger
One would think that Yudof is trying to share the pain of the UC by taking this pay cut. Of course one needs to understand that when Yudof was hired last year, his total compensation package was double that of his predecessor. By my calculations, Yudof’s salary is down from $591,084 to $561,529.8. This means that his salary is still up from his previous job at the University of Texas ($528,860). Of course he is only taking a 5% PAY cut, not a 5% reduction in compensation…so his total compensation package will go down by a percentage less than 5%. Yudof’s total compensation includes:
* an annual base salary of $591,084 (compared to current annual cash compensation of $528,860 at the University of Texas). The UC salary falls below the midpoint salary ($606,200) set for this position by the Board of Regents and below the median salary ($644,900) of leaders of similar public and private universities used by the California Postsecondary Education Commission for comparison purposes.
* as an exception to policy, supplemental pension funding amounting to $228,000 in 2008-09 and varying somewhat each year thereafter. This funding, in combination with normal UC Retirement Plan benefits, is intended to produce a UC retirement benefit comparable to what Yudof would have expected to receive at his present employer. (The University of Texas presently provides Yudof $250,000 per year in supplemental deferred compensation in addition to his base salary and normal retirement benefits.)
* an automobile allowance of $743 per month or $8,916 per year;
* university-provided housing, as a condition of employment;
* reasonable lodging, transportation and other business-related expenses associated with university business prior to his relocation, along with reimbursement of actual costs for packing and relocation of household effects and library;
* consistent with past practice, if Yudof assumes a UC faculty position immediately after his tenure as UC president, the university will arrange for the relocation of his personal belongings, and he will be eligible for a Mortgage Origination Program loan in order to purchase a primary residence;
* use of administrative funds for official entertainment and other purposes allowed by policy; and standard health, pension and senior management benefits, and standard sabbatical, sick leave and vacation accrual.
All of the above is directly from the office of the president. As you can see, Yudof will take a 5% cut in his half a million base salary, but will retain his entertainment funds, UC paid pension funds, UC paid house, UC paid car etc.
Many people have noticed the self awarded large salaries of the regents and the office of the president with no oversight and nothing to stop runaway spending. Of course if you ask the office of the president about it, they will start blathering on about market forces and the need to recruit top talent. Some legislators have noticed the lack of government oversight in the board of regents and have introduced a bill, ACA 24, to bring the board of regents under stricter legislative control. I couldn’t get a good sense of the full impact of the bill from just reading it, but the office of the president (UCOP) has a statement about it. UCOP is pissed that the legislature wants to control their salaries and compensation, calling it a power grab, and their argument is basically that the UC has a better credit rating than that of the state government. The UC got a good rating, AA1, from Moody’s, the credit rating agency that gave mortgage backed securities their top rating, AAA (and many blame these ratings for a large part of the current economic downturn). UCOP then compares their rating to the rating of all of California. The bill would place the UC system under a similar oversight structure as the CSU system. If the office of the president wants to get into a pissing match about credit ratings, the closer and proper credit rating comparison would be between the UC system and the CSU system. Of course moody’s wants to charge you money just to see their ratings (which is a load of BS), but one can get articles that cite the rating of CSU bonds. The linked article states that cal state bonds are rated AA3 instead of the UC AA1 (see here for how to compare the ratings). California state general bonds are currently rated A1 according to the linked article. Basically the UCOP wants you to compare their best rating with California’s lower rating instead of with the in between CSU rating.
Of course the top brass at CSU have instigated pay raises for themselves while instigating pay freezes for professors. If this legislation would put the UC under a similar regulatory regime then I don’t see why Yudof is unhappy. I guess the head of the CSU system is paid a base salary $140,000 less than his current salary and oversees more higher education Institutions.
More on the legislation:
http://www.sbsun.com/ci_12489653
http://blogs.pe.com/ballotwatch/2009/05/nestande-takes-on-uc-autonomy.html
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