Friday, August 22, 2014

Board of Regents Give U of Alaska President $320K Retention Bonus - Part I

[I wrote this post two weeks ago and then decided I should probably get more information from the Board of Regents.  I got their response yesterday (my mailbox was too full for their first try).  This post is already fairly long, so I've decided to post this pretty much as is.  Part 2 will look[s] at the questions I sent the Board and their response, including the President's new contract.  There may be a Part 3 which [posts the salary survey the Board commissioned and looks in detail at why organizations do salary surveys] would probably analyze their response and the contract.] [To check all the posts on this topic, go to University President Bonus page.]

A bunch of issues here:

1.  How much should the president of a public university get paid?
2.  What other options are there?
3.  Why would the Board of Regents do this?

First, the facts. 

From the Alaska Dispatch News:
Amid budget cuts and campus layoffs, the top executive of Alaska’s public university system has been offered a $320,000 retention bonus.
The University of Alaska Board of Regents in June voted to offer a contract extension to president Pat Gamble that includes the bonus.
Gamble will receive the money, equal to one year of his salary, if he stays at the helm of Alaska’s public universities until 2016.

From the University of Alaska website:
Patrick K. Gamble became the University of Alaska's 13th president on June 1, 2010.
Prior to joining the university, he served Alaska for over 9 years as president and chief executive officer of the Alaska Railroad Corporation. He currently serves as chair of the Alaska Aerospace Corporation Board of Directors.
Gamble served as a fighter pilot in the U.S. Air Force, retiring as a four-star general in command of U.S. air forces throughout the Pacific Region.

How much should the president of a public university get paid?

There are two basic approaches to salary:
  • Pay is related to the value of the work to the organization
  • Pay must be competitive to other organizations employing similar positions
And then there are all the people who work simply because they love the work - some in this group get paid well; others almost nothing
From what I can tell, the Board of Regents is mostly using the second criterion.  Again from the ADN article:
  • "Six-figure retention or performance bonuses are increasingly standard for university presidents, said McConnell."
  • "Gamble’s pay package is modest compared to his peers, said Kate Ripley, a university spokeswoman."
But there is some comment about performance:
  • "Ripley, the university spokeswoman, said the Board of Regents 'strongly supports his leadership and the work he's doing, specifically with the Shaping Alaska's Future initiative, improved graduation rates, mandatory student advising, better service to students and working more closely and effectively with the state, the K-12 system, and all of Alaska's employers.;”
I don't know if there are any measures that compare his salary to his contribution to the university.  It was easier to determine that with the former President Hamilton because he clearly got large budget increases from the legislature while under President Gamble the budget has been cut and programs are being cut.  

What alternatives are there?

There have been a couple of different perspectives on the rising salaries of university presidents.

In Canada, four faculty members applied as a group, for the $400K president position at their university. One of the four asks:
". . . should university boards be spending $400,000 and more on any one person, when so many faculty lines are frozen, and earning well below one-fourth of such a salary?"
In their application, they wrote:
"As you can see, four people can manage this job far more effectively than any one single person, however qualified that person might be for a half-a-million in compensation. We can spell off the dreary business of Convocation, with one person attending/presiding while the other three continue on with the much-needed work of the president/vice chancellor's office, rather than having to take a week's hiatus every April. Sick days will be irrelevant, since three other people will be available to fill in if one person is ill or on leave. Most importantly, we each pledge to teach one undergraduate class per year - which we would bet none of your other candidates are proposing to do! - both as a way of "walking the talk" about the "importance of higher education" and our "world class students," and as a means of contributing to the current climate of austerity at the University of Alberta, in which everyone - even in the highest levels of administration! - is called to pitch in and do their bit."

Another approach was recently offered by Kentucky State University interim president Raymond Burse, who is giving back some of his salary.  From
Raymond Burse, interim president of Kentucky State University, has given up more than $90,000 of his salary so university workers earning minimum wage could have their earnings increased to $10.25 an hour.
"My whole thing is I don't need to work," Burse said. "This is not a hobby, but in terms of the people who do the hard work and heavy lifting, they are at the lower pay scale."

So, what about here in Alaska?

"I don't need to work" is true of President Gamble as well.  He retired as a four star general after 34 years.  According to USA today in 2011:
"Now, a four-star officer retiring in 2011 with 38 years' experience would get a yearly pension of about $219,600, a jump of $84,000, or 63% beyond what was once allowed. A three-star officer with 35 years' experience would get about $169,200 a year, up about $39,000, or 30%."
So let's assume he's getting somewhere between $150,000 and $200,000 a year from his military pension.  And with nine years as president of the Alaska Railroad he's surely got some pension coming in there too.  With his UA salary of $320,000 it's a good possibility he's got half a million dollars coming in each year.   So, President Gamble, by most people's standards, doesn't need an extra $320,000 to stay on as president. [Just after I originally wrote this, but before I posted it, Marcelle McDannel had an opinion piece in the ADN pointing out that Gamble's salary puts him into the 1% and raises questions about the spirit of public service.]

My belief is that someone serious about improving the University of Alaska - or any public university - should be embarrassed by making so much more money than most of his employees.  I know that my years teaching at the university were not in pursuit of a high wage, but because I had a job I believed was important and I worked hard to do the very best I could at it.  I personally don't see how anyone really dedicated to his work would just drop it midstream because someone offered more money to start anew in a different organization.  Especially at a time when the university's budget is being cut.  I'm not even asking him to give up a quarter of his salary like President Burse, though that would be nice too.

Sure, there will be many who say that he earned his military pension - and I agree.   I'm distinguishing between what is legal, reasonable, and decent.  He's not hurting financially in any way, but the institution he's leading is.  Someone who is truly dedicated to the University and was already earning about half a million a year, wouldn't accept taking that extra $320,000 for himself.  It makes me think of the time when women were paid much less than men because it was felt, their husbands were supporting them and this 'second' job was just gravy anyway.  One could argue that this second job is just gravy anyway here too, without the residue of gender discrimination.  He could use it to support improving the university. Perhaps ask the Regents to put it into a fund he can use at his discretion for programs or students.   But different people see the world differently.  That's my take on it. 

Why did the Board of Regents do this?

Let's look at who is on the Board.  I've taken information on their education and work experience from their bios on the University website

Regent Dale Anderson:
  • currently works in the financial services industry and owns Auke Lake Bed & Breakfast. He brings to the board extensive life experiences from both the private and public sector. He has owned and operated numerous enterprises as well as served as a member of the City and Borough of Juneau Assembly, legislative aide for the House Finance Committee in the Alaska State Legislature and as commissioner of the Commercial Fisheries Entry Commission. 
  • holds a certificate of judicial development in administrative law from the University of Nevada and a bachelor’s degree in Business Administration from Oral Roberts University. He is a member of the Aircraft Owners and Pilots Association, Alaska Travel Industry Association, Juneau Chamber of Commerce and the Juneau Convention and Visitors Bureau

Regent Timothy Brady:
  • president of Ken Brady Construction Company, where he has worked in various positions over the past 30 years. 
  • holds a bachelor of science degree from Arizona State University's School of Engineering, Division of Construction.

Regent Fuller Cowell:
  • He completed his bachelors of business administration with an emphasis in marketing at National University, Sacramento, California graduating Summa Cum Laude. Cowell completed the Advanced Executive Program at the Kellogg Business School, Northwestern University, in Chicago, Illinois.
  • Cowell’s newspaper career took him from a newspaper carrier at the Fairbanks Daily News-Miner to director of operations of the McClatchy Company and ultimately publisher of Alaska’s largest newspaper, the Anchorage Daily News. He spent ten years commercial fishing in Area E, which includes Prince William Sound and the Copper River Delta. 
Student Regent Courtney Enright:
  • working toward a bachelor’s degree in mechanical engineering and master’s in business administration at the University of Alaska Fairbanks.
  • currently is interning for Baker Hughes Inc. In the past she has worked as a research lab technician for the Alaska Space Grant Program and as an intern for Alaska U.S. Senator Lisa Murkowski

Regent Kenneth Fisher:
  • is an Engineer Officer with the U.S. Public Health Service currently working with the U.S. Environmental Protection Agency Region 10 in Juneau, Alaska, where he serves as the Senior Representative to the State of Alaska. 
  • graduated from Michigan Technological University in 1982 with a Bachelor of Science in engineering. In 1998, he completed a Legislative Fellowship with the Brookings Institution in Washington D.C.
Regent Jyotsna Heckman:
  • earned a bachelor's and master's degrees in Business from the University of Alaska Fairbanks and has also attended graduate school for financial studies at Georgetown University and Southern Methodist University
  • retired as the President & CEO of Denali State bank in December 2011 after twenty six years of service with the bank. She currently serves as a director on the bank's board
Regent Mary Hughes
  • graduated from the University of Alaska with a BBA in Management in 1971 and earned her juris doctorate from Willamette University College of Law in 1974.
  • A partner in the law firm of Hughes, Thorsness, Gantz, Powell & Brundin until 1994, she served as the Anchorage Municipal Attorney from 1995-2000 and Of Counsel with the firm until May 2005 when she became Alaska State Director for the Office of U.S. Senator Lisa Murkowski, a position she held until January 2008
Regent Pat Jacobson:
  • graduated in 1969 from the University of Arizona with a BA in Elementary Education, and from the University of Alaska in 1972 with an MA in Elementary Education. Regent Jacobson taught various elementary grades, primarily gifted classes, for 26 years, 25 of which were in Kodiak. 
Regent Gloria O'Neil:
  • President and CEO of Cook Inlet Tribal Council (CITC) since 1998, Gloria has led the organization’s growth in becoming one of the major social service providers in Alaska, currently offering more than 50 essential programs that serve more than 14,000 Alaska Native and American Indian people each year.
  • earned her Master of Business Administration degree from Alaska Pacific University, and received her Bachelor of Arts degree in Sociology, with a minor in Business Administration from the University of Alaska Anchorage.
Regent Michael Powers:
  • Chief Executive Officer for Fairbanks Memorial Hospital and Denali Center in Fairbanks, Alaska.   He first served at Fairbanks Memorial as its Chief Financial Officer in 1986 and was named CEO in 1995. 
  • earned a master's degree in Healthcare Services Administration from University of Wisconsin/Madison, and a bachelor's degree in English Literature from Lawrence University.  He earned a higher diploma in Anglo-Irish Literature at Trinity College – Dublin, as a Rotary International Graduate Fellow.
Regent Kirk Wickersham:
  • is an actively retired attorney and real estate broker. He is the developer and owner of FSBO System, Inc. a company that provides professional coaching to home sellers, and a former chair of the Alaska Real Estate Commission.
  • a graduate of the University of Alaska, Yale Law School, and has a master’s degree from the University of Colorado.  
There are a number of folks here who look like they should be interesting and thoughtful.  It's probably a little unbalanced in terms of educational and professional diversity.  And I suspect political diversity. 
  • Sixty percent work in high level private sector positions and five have business degrees.  These might be expected to be comfortable with high corporate salaries. 
  • Five were appointed by Sarah Palin (one of those had originally been appointed by Tony Knowles.) 
  • Five were appointed by Sean Parnell  
But we shouldn't jump to conclusions based on such little data.  Though we know that the Board did make this offer.  They all have email addresses and phone numbers at the linked bios if you want to ask.  I suggest you email them and ask them to explain the decision.

I went to the Board of Regents' page that has minutes of their meetings.  The latest they had was a Summary of Actions for the June 5-6, 2014 meeting.  So they're two months behind

Part II will cover my questions to the Chair of the Board of Regents and her response along with a copy of the President's contract. 
[UPDATE:  You can see a list of all the posts on the President's bonus here.]

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