Monday, August 25, 2014

UA President's Retention Bonus Part 2: My Questions, Their Answers, And The Contract

After writing my earlier post on the president's retention bonus, but before posting it, I decided I should check with the Board of Regents, so I sent this set of questions.  The response letter did not address the questions one by one.  Instead it was one long answer.  Below I attempted to find the answers to each of my questions in their response and in the contract and put them after my questions.   You can judge for yourself if I've accurately and fully done this task by looking at their response letter at (1) near the bottom of the post.  The contract itself - "the Agreement" - is at (2) below.)
Q1.  Can you explain to me what the logic behind this was? 
  • President's salary is 25-28% under market for systems presidents at comparable universities
  • Board believes President's leadership has been exceptional
    • Evidence includes the Shaping Alaska’s Future initiative (, a collection of 23 different effects or outcomes the university intends to achieve within five thematic areas. Agreement on this important strategic direction for the entire UA System represents unprecedented collaboration between multiple stakeholders. Quite simply, it has never been done before at UA. 
    • The board has also seen first-hand strong evidence that Pat Gamble understands and anticipates national and state trends and has learned the
      details of university operations and educational processes in the State of Alaska.
Q2.  Was there a threat that President Gamble would leave if you didn't do this?
Answer:  It appears the answer is 'no.'
  • "Pat Gamble is an accomplished nationally known and exceptional leader, who could readily take his skills elsewhere or simply decide to retire."
  • Salary is "already 25-28% under market for system presidents at comparable universities.  . . . "  Rather than increase his salary, which would give him no incentive to stay, they decided to use a retention bonus, which "addresses the market issues while creating a powerful incentive for President Gamble to stay on board."
Q3.  Was there any discussion about other ways this money could be used - like hiring faculty or other direct program benefits?
Answer:  Response letter did not address this question.
Q4.  Was there any opposition to this proposal? Can you tell me what the discussion was about?
Answer:  Not really addressed.  See Q5.

Q5.  Was the vote unanimous? If not, who voted for and who voted against this item?
Answer (from the email, not the attached Response Letter):  "The vote tally for approval
of the presidential contract during the June 2014 meeting was 10-1 ."
  The letter did not say who voted against.  I learned through other channels the no vote was Kenneth Fisher.
Q6.  Was there any sort of review packet of his work, say as faculty are required to turn in each year?  Was there any sort of quantification of the benefits the President brought to the university that could be tied to the amount of bonus?
Answer:  This was not answered directly. It appears the answer is no.   Some of the reasons they listed for finding the president exceptional are listed in the answer to Q1.  The letter also included:
"President Gamble also has worked with governance and the board to make real progress on longstanding academic issues that will facilitate student access and success. Those include improved graduation rates, 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.  President Gamble also has maintained good working relationships and open communication with the legislature and governor. The funding of the UAF heat and power plant and the continued progress on the UAA and UAF Engineering buildings is evidence of that relationship."
Q7.  Was there any discussion of faculty or staff bonuses and the propriety of paying the President a bonus when others, not only aren't getting bonuses, but instead are being cut? 
Answer:  The letter did not address this directly.  Perhaps this was intended to address it:
"We understand some people will disagree with our approach. We cannot always agree on every issue. Ultimately, however, I believe the board’s decision was in the best interests of the University and the state, and we stand by our decision to offer the performance- based retention incentive in lieu of a market adjustment."

Q8.  In the Summary of the June 4-5, 2014 meeting, it says: "The Board of Regents approves an extension of Patrick K. Gamble's contract of employment as president of the University of Alaska System at an annual salary of $320,000 per year, retroactive to June 1, 2013, and continuing through May 31, 2016, with terms as authorized by the board."
a.  Why was it made retroactive? 
Answer:  Because he has been working without a contract since June 2013.

b.  What was his annual salary prior to the June meeting? (Presumably, since the pay increase was made retroactive, it was lower than $320,000. If it was already $320,000, why was it made retroactive?)
Answer:  It was $320,000.  Retroactive, as mentioned, because he was working without a contract since June 2013.
c.  What are the "terms as authorized by the board."  I assume this is the $320,000 bonus, but are there other terms besides that one?  
"With the incentive approach, if the president voluntarily departs the university before the end of his contract term, he does not get a dime of the incentive.  The president also remains an at-will employee, so the board may terminate his employment for no reason or any reason at any time.  If the Board terminates the president's contract at-will, the incentive amount would be reduced proportionately."
There are also provisions in the contract - copy at bottom of this post -that provide for proportional payment if the president gets sick and can't work for three months, gets disabled, or dies.

Additionally, the contract includes a number of perks:
  • the president is required to reside in provided residence which "is to be used for official business and entertainment associated with your position.  The University provides for maintenance, utilities, and domestic assistance . . "
  • "an allowance for a vehicle appropriate for University business, entertainment and other purposes."  This includes "maintenance, repairs, fuel, insurance, and other costs."  However, personal use has to be reported to the IRS as additional compensation.
  • 240 hours a year annual leave plus sick leave at 4.62 hours/pay period (two weeks)
  • relocation expenses up to $27,000 on termination
Q9. Can you please send me a copy of the contract between the President and the Board of Regents?
Answer:  The contract that was also sent along with the "2013 Retention Addendum" contains all the details.  I've posted the contract at (2) below.

(1) The University's letter in response to my list of questions:


(2)  The President's 2013 Employment Agreement

There's a lot to digest here.

In the abstract, there are good reasons for retention bonuses, the question is whether they apply in this case.
Part of the answer depends on how a)  how good a job the president has done and is expected to do in the future and b) the likelihood he would leave before the end of the contract.
Another question the Board seems to not have addressed is the appropriateness of high salaries for public university presidents.  The Alaska governor makes $145,000 a year (compared to President Gamble's $320,000) and the governor turned down the additional $6,000 a year recommended by the Alaska State Officers Compensation Commission.  Although a governor's spokesperson had said the governor approved the increase, 
"His office says he changed course  'in light of budget constraints and upon further reflection.'"
In a follow up post I will try to assess the Board's decision.
[UPDATE Aug 31 - The follow up post (#3)  has the list of schools used in the salary survey.]

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