UA President's Bonus Rescinded And Fuller Cowell, The Regent Who Voted No

This is old news, but I want to complete the story I started on this topic and also get people to start paying attention to who is on the Board of Regents.

At their September 8, 2014 meeting, the Board of Regents voted, at the President's request, to rescind the $320,000 retention bonus.  I'm hoping this is the end of this particular series of posts, but I would note that the president's request did say that the bonus was inappropriate at this time.  Leaving open, perhaps, a more appropriate time.  But I want to give the president the benefit of the doubt.  As I've indicated in previous posts on this topic, he's already earning - with pensions from the Air Force and the Alaska Railroad - and his UA salary, in the ballpark of half a million a year.  Anyone could find something to do with $320,000, but at his income level, surely he can live well without it.

One of the regents voted against rescinding the bonus.  KFQD reported:

"[Cowell] says the university wants to attract high-quality leaders and the vote sets a bad precedent. Gamble says he appreciates the support of the board."

It seems that the rest of the regents thought giving the bonus sends an even worse message to students, faculty, and staff of the university system, not to mention potential donors, the legislature, and the general public.  And I'm not sure what bad precedent it sets.  That the Board listens to the president?  That it is sensitive to public opinion?  That it can correct a mistake?  Or that if you want to be president of the Alaska system, your salary won't be unlimited?

I emailed Regent Cowell right after the vote to ask some questions, but I never got a response.  He's also the only regent who doesn't list his phone number on the University pages for the regents.

So I took to the internet to try to figure out who he might be.  I'll warn you, I've been doing this long enough to know that figuring out someone's values and motives from scraps of bio information is a risky business.  At best it can let you speculate and raise questions to ask.

So let's look at Cowell's online shadow.

First, from the University of Alaska's bio of the regent.

Fuller A. Cowell of Anchorage was appointed in 2007 by Governor Palin. Regent Cowell was raised on a homestead in Fairbanks, attended Lathrop High School and studied biology at UAF. 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. In 1995, he was awarded the UAF Alumni Achievement Award for Community Achievement. The award was established to recognize outstanding UAF alumni.

If you just read this you might think Cowell was born in Alaska, but a McClatchy article from 1993  says he didn't come until he was seven. 

He has an extensive background in Alaska, moving to the state with his family when he was seven years old. 

That's no big deal.  I didn't get to Alaska until I was in my 30s. It's not so much how long you've been here, but a) whether your story matches what really happened, and b) whether your time here was spent getting to know the state, particularly the people.    

Probably much more relevant to his position as a regent is his educational background.  From the official bio we can infer that he studied at, but did not graduate from UAF.  Then, apparently he switched from biology to business.  National University is today a big online university. How good it is, I can't tell.  Students often go to online universities because it's easier to get in, class times are more flexible, and they want a degree.  While you can get a good education online (and a bad one in person), my guess is that most people going to online programs want the degree more than they want an education.  That's a generalization and there are lots of exceptions.  Does it apply to Cowell?  First, I don't know when he went and whether it was even online at the time.  But it's not a traditional university.  I'm guessing he went there because after dropping out (?) of UAF, he just wanted to get his diploma.  But I don't know.  We just gather clues and make hypotheses and try to test them.  His next educational experience seems to point in the same direction. 

"Cowell completed the Advanced Executive Program at the Kellogg Business School, Northwestern University, in Chicago, Illinois."

First, I'd mention that Northwestern is in Evanston, Illinois, a suburb of Chicago.  But maybe they have a Chicago branch, or maybe he thought people wouldn't know where Evanston was, or maybe he's not a stickler for details.  It's probably not important, but just another clue that may or may not prove useful.

The Kellog School has one of the best business programs in the country.  An advanced executive program sounds pretty substantial.  But the Advanced Management Program - Intensive today is just under three weeks long and costs $36,000! (In comparison, a Harvard Business School Program For Leadership Development costs $45,000, but goes from December to June with two (12 day) on-campus and two off-campus modules.)

Again, this is a program for someone who wants to get things done quickly, who can't or doesn't want to spend the time for a longer, more traditional program.  I'm sure it was a stimulating experience, but there's only so much you can learn and retain in such a short program. 

Is this the best person that Sarah Palin could find to be on the board?  Of course, each appointee should be considered in the context of the other members.  If they all have more traditional educations, then he might add a useful perspective. 
 

Back to the official bio. 

Cowell serves as co-chair of the Providence Foundation Steering Committee, is on the board of St. Elias (long term acute care) Hospital and on the C.W. Snedden Chair of Journalism Selection Committee at UAF. He has served on the Journalism Advisory Board at UAA, the boards of Commonwealth North, Anchorage Chamber of Commerce, and the Anchorage Performing Arts Center and co-chaired the United Way of Anchorage campaign.

The Juneau Empire adds this:

He also co-chaired the Providence Foundation Steering Committee and was a founding member of the Alaska Cancer Research and Education Center.

The cancer research makes more sense if you look at Evangeline Atwood's Bent Pins to Chains:  Alaska and Its Newspapers:

"He returned to Alaska in 1993 as publisher of the Daily News but had to retire in 1999 to concentrate on a successful fight against leukemia."

Back to the official bio:

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.

Cowell is married to the former Christmas Tripp of Fairbanks. Their daughter Alexis lives and works in Anchorage where she was born.

Much of his career has  been spent working for the McClatchy newspaper chain. Including time with some of its California papers.   He seems to have been in the management rather than the journalism side.  The McClatchy newspaper chain published information about Cowell when he took over as the publisher of the Anchorage Daily News, in 1993.


He's also, it seems, the owner of Cowell's Heliport Service in Big Lake.  The only date I could find on the site was a 7/2004 activation date; there's a July 2014 reference at 123 Jets. Or maybe he has a son with the same name.


OK, as I said, this is just a bunch of facts about his education and his work experience.  It doesn't tell us who he is, what he knows, what he values, and whether he's a good choice for the Board of Regents.

The University plays a critical role for Alaska.  If it does its job well, more Alaskans will get a good education and make important contributions to a sustainable Alaska, an Alaska that uses its resources wisely and has both  physical and social infrastructures that support a good life for this and future generations.

With a FY15 budget of over $1 billion, it's also an institution whose leaders should be closely followed and kept accountable.  But I dare say few Alaskans could name even one or two regents, let alone have any idea of what they do or how well.  (I did post abbreviated bios of the regents in an earlier post.)

I hope to explore this topic further in future posts. 

Gamble Asks Board To Review $360K Retention Bonus

UA Outreach sent a heads-up email (see the whole email below) yesterday to "Dear University Employee" about a press release entitled "UA’s Gamble requests board to review retention incentive."

This is a positive development.  There's been a lot of backlash both inside and outside the university to the $320,000 retention bonus the board of regents voted to give the president.  The board president has strongly defended the bonus as the right thing to do, making it hard for her to back down now.  So the president's asking them to review it is a way for them to do so and save face.  But it sounds so half-hearted.

As I read the release, I noticed that the president danced around the issue.  He doesn't ask the board to withdraw the bonus.  He doesn't say he won't take the bonus.  And most importantly, he doesn't assure that board that he will stay to finish the Shaping Alaska's Future project that board president Jacobson touted as key evidence of the exemplary work the president was doing. 

“I very much appreciate the board’s support, but this issue will remain the elephant in the room every time we meet with faculty, staff, a donor or a legislator,” Gamble said. “The decision ultimately is up to the board, but the timing isn’t right and I think the board is very sensitive to that now.”
Gamble made the remarks during a noon presentation of the Greater Fairbanks Chamber of Commerce today. He said he couldn’t predict what the board will do, but feels certain the board will consider the situation with the public sentiment in mind."

 "The decision ultimately is up to the board."   As I see it, it is ultimately up to President Gamble.  He can refuse it.  He can return it to one of the various funds and foundations at the university. In an earlier post, I cited the example of Raymond Burse, interim president of Kentucky State University who gave $90,000 of his salary to raise the salary of minimum wage employees at KSU.

One could argue this phrasing is simply a reflection of the president's long military career and he's following the university chain of command, deferring to the board at the top. (And his wording suggests the board was out of touch when he says, "the board is very sensitive to that now.") 

But that's one of the problems many at the university have with the president.  The university isn't a military organization with a rigid chain of command.  It's a collaborative organization where governance is democratic and collegial.

Most vexing to me is the lack of assurance from the president that he will stay to finish the work he's begun, at least until June 2016.  I understand the board's concern that they might have to conduct a search for a new president.  Searches can be expensive and finding a good candidate who will accept the position is not assured.

This retention bonus covers three years, starting in June 2013 when the last contract ended.  There's no explanation of why it took a year to renew the contract, but the practical consequence is that over one-third of the retention bonus time has already passed, and as of today, there are only 22 months left in the new contract.  Surely the president could assure the board, for the sake of a smooth and well planned transition, that he will stay until then.   That would give the board the security of knowing he plans to stay and remove the need for such a bonus.  Does he not plan to stay?  Is that why he doesn't say it?

Instead, he says "the timing isn't right."  Does that mean they should wait for a better time? 

OK, as someone who writes every day, I know that it is easy to misinterpret what someone says. Every reader reads the words differently.   I'm just saying that as a retired faculty member with 30 years at UAA, I felt that the president could have made a statement that was more in tune with the university culture.  He needed to send several messages to several constituencies (the regents, the university community, the state), both with what he said and how he said it:

1. I've learned about the university culture, I've learned your language and values
2. I assure you I'll finish the work I started and stay until June 2016, and so there's no need for a retention bonus
3. Given the state's and university's budget problems, giving me a bonus big enough to pay for three senior faculty is inappropriate.  
4. I urge the board to rescind the bonus and use that money to save programs we have had to cut instead.  [I'd note though, that this is future money, not current money.]

Of the four statements above, the only one he made was #3, and that was supported this way:

"The retention incentive has become a negative distraction at a time when there is a great need for all levels of the university community to pull together."

The problem, he says, is that the bonus is a distraction.  He doesn't say it was wrong.  It seems he still doesn't get it. 



Here's the whole email sent out:

Dear University of Alaska Employee:

Please be aware that the following media release is being issued this afternoon. We wanted you to know about this prior to reading it in the press:
________________________________________________

For Immediate Release
Tuesday, Sept. 2, 2014

UA’s Gamble requests board to review retention incentive

University of Alaska President Pat Gamble has requested the 11-member Board of Regents revisit the issue of a $320,000 retention incentive approved in June.

The board is scheduled to gather in a special meeting Sept. 8 in Anchorage, largely to meet in executive session to discuss financial and budgetary issues. However, Gamble said he anticipates the regents will take another look at the retention incentive, which would be payable at the end of his current three-year contract in May 2016.

The timing of the retention incentive, while offered with good intentions, has been difficult to justify in the public eye as UA works to meet current and expected budgetary and enrollment challenges, Gamble said. It comes at a time when higher education nationally is undergoing rapid change, as students and parents expect greater results, more efficiency and more accountability from public colleges and universities. The retention incentive has become a negative distraction at a time when there is a great need for all levels of the university community to pull together, Gamble said.

“I very much appreciate the board’s support, but this issue will remain the elephant in the room every time we meet with faculty, staff, a donor or a legislator,” Gamble said. “The decision ultimately is up to the board, but the timing isn’t right and I think the board is very sensitive to that now.”

Gamble made the remarks during a noon presentation of the Greater Fairbanks Chamber of Commerce today. He said he couldn’t predict what the board will do, but feels certain the board will consider the situation with the public sentiment in mind.

The regents approved the retention incentive at the June 5-6, 2014 meeting. It was intended to reward performance, with a powerful inducement for Gamble to remain on the job through the end of his contract in May 2016 and to continue forward momentum on the Shaping Alaska’s Future initiative.

“I’d like to put this issue to rest, and for myself, my administration, all of our campus leaders and the regents to focus on the tough tasks ahead, moving the University of Alaska into a stronger, more efficient and highly effective student-centered institution that is worthy of the highest expectations of Alaskans,” Gamble said.
 

University of Alaska President Retention Bonus Part 3: The Salary Survey

In response to my request the other day to Board of Regents Chair Jacobson, the UA Public Affairs  office sent me a page from the salary survey the Board used to determine President Gamble's salary.  I'm adding it at the bottom of this post, so people have more information with which to understand the Regents' decision.  I haven't had time to do research on the comparable universities, but I thought I should put it up so others could review it.

First, though, let me preface the data with a discussion of salary surveys and executive pay in general.

Salary surveys are routinely used by organizations to determine the 'market value' of  various positions.  This is then used to set the pay for the positions in the organization.

A"pay philosophy" is what the organization uses as a standard to determine how to use the salary survey to set pay for their positions.  These usually relate to how close to the prevailing wage they want to set their salaries.  Some want to be known as paying above the average, others below.  In the email to me, Kate Ripley wrote:

"The regents' goal for some time now has been to pay at 10 percent below the market median. "

For some job categories, where there are large numbers of incumbents who do relatively the same functions - like different categories of nurses -  surveys are pretty easy to do.  In cases like nurses, geographic area may be a key factor.

For job categories where the population is much smaller - like university president - nationwide salary surveys are more likely.  For executive jobs that are more unique, the trick is to compare institutions that are similar in important ways, where the job has more or less the same challenges.  For CEO's things get pretty tricky trying to identify comparable organizations with comparable CEO roles.

Even in one sector, like education, picking comparable institutions is not easy.  Some factors to consider:

• Private versus public institutions.
• Size of the student body and the makeup of the student body.
• Institutional mission:  research or teaching or combo;  urban, rural; undergraduate, graduate;  fields (science, medical school, law school, etc.)
• Role of the president:  external or internal;  importance of fund raising; etc. 

 Another question, that I think is worth considering, and seems to play a role in the criticisms the Regents are receiving, is the explosion of executive salaries in recent years that is self perpetuating when you use salary surveys to find an appropriate salary.  There's been a lot of media coverage of the wealth gap in the US and the growing economic power of the "1 percent."

From a 2010 Economic Policy Institute study:

The wages and compensation of executives, including CEOs, and of workers in finance reveal much about the rise in income inequality:

• The significant income growth at the very top of the income distribution over the last few decades was largely driven by households headed by someone who was either an executive or was employed in the financial sector. Executives, and workers in finance, accounted for 58 percent of the expansion of income for the top 1 percent and 67 percent of the increase in income for the top 0.1 percent from 1979 to 2005. These estimates understate the role of executive compensation and the financial sector in fueling income growth at the top because the increasing presence of working spouses who are executives or in finance is not included.
• From 1978 to 2011, CEO compensation increased more than 725 percent, a rise substantially greater than stock market growth and the painfully slow 5.7 percent growth in worker compensation over the same period.
• Using a measure of CEO compensation that includes the value of stock options granted to an executive, the CEO-to-worker compensation ratio was 18.3-to-1 in 1965, peaked at 411.3-to-1 in 2000, and sits at 209.4-to-1 in 2011.
• Using an alternative measure of CEO compensation that includes the value of stock options exercised in a given year, CEOs earned 20.1 times more than typical workers in 1965, 383.4 times more in 2000, and 231.0 times more in 2011.

Now, private sector CEO's get a significant amount of their pay in stock options, which is not the case for public sector CEO's.  However, the inflation of private CEO salaries surely has impacted public sector and non-profit CEO salaries as well.


Edward E. Lawler III , distinguished professor of business at the University of Southern California (USC) Marshall School of Business writes at Forbes:

"The standard justification for the high pay of CEOs and other top executives is that the market demands it. It is argued that if you do not pay CEOs at or above the market, they will leave and go to a competitor.

Which is exactly the argument that Board Chair Jacobson makes.  From the letter she sent to the faculty and staff Thursday:

Pat Gamble is an accomplished, nationally known and exceptional leader, who could readily take his skills elsewhere or simply decide to retire. The retention incentive approach addresses market issues while creating a powerful incentive for President Gamble to stay on board.

But Lawler continues:

There are a number of problems with this argument. Perhaps the most important one is that numerous studies have shown that CEOs rarely move from one company to another, and when they do, they are usually less successful than internal candidates. In short, at least at the CEO level, there is little evidence that an efficient market for talent exists that is based on compensation levels.

Market data are a constantly escalating and flawed indicator of what executives should be paid. Few boards are willing to pay their executives below market. There are several reasons for this. Board members typically want to be looked upon positively by the CEO and other senior executives in order to get on and remain on corporate boards. A board member who argues for paying individuals below the market is not likely to be a respected or valued board member, at least in the eyes of the executive team of the company."

Private sector and public sector CEO's are a bit different and the board dynamics are a little different.  Lawler argues that many board members are CEOs of other corporations.  As CEO's, they benefit when other CEO salaries rise.  That's not the case for the Board of Regents.  However, these other dynamics he mentions in the previous paragraph. apply to public boards, like the Board of Regents, as well.

Enough context.  But it helps explain why I'm just giving you the raw data they sent me.  And why I'm not analyzing it.  Because at this point I don't have enough information about the comparable institutions to evaluate how comparable they are.  The information they sent me did not explain how they chose these institutions or what their characteristics are that make them 'comparable.'  But maybe others reading this will have more information about the institutions they compared UA with.

It's a little small, but if you download it, you should be able to read it easily. And you can enlarge it, but it seems to be a little bigger where I uploaded it at Scribd.

U of Alaska President Salary Survey Spreadsheet by Steve

Ripley's email said:

"Attached is a copy of UA peers for presidential compensation purposes. This salary information is collected in house on an annual basis by Human Resources and Institutional Research."  

 The colors indicate:

green - "Quatt identified presidential peers"  (Quatt is a DC based management consulting firm which lists the University of Alaska as a client on their website.)

blue - IR identified UA peers  (IR is University of Alaska Institutional Research)

orange - Quatt and IR identified

Other abbreviations:

Chronicle = Chronicle of Higher Education, the basic trade journal of higher education
CUPA = College and University Professional Association for Human Relations
SHEEO = State Higher Education Executive Organization
OSU = Oregon State University

All the organizations do salary surveys in higher education. 

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? 

Answer:

• 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 (www.alaska.edu/shapingalaskasfuture), 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?  

Answer:

"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:


  

Questions on Retention Incentive Response Letter by Steve

(2)  The President's 2013 Employment Agreement

President Gamble's Contract 6-1-2013!5!31-2016 by Steve

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.]

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 Kentucky.com:

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.]