Thursday, September 16, 2010

UC Regents Set to Hike Pay for Executives, Again

Administrators to receive millions in bonuses, while students and low-wage workers suffer
SAN FRANCISCO – Once again, the University of California Board of Regents are set to hike salaries for top executives despite the university’s budget situation which has resulted in significant student fee increases and thousands of low-wage workers living in poverty.

“Sadly, the UC administration is grossly violating the public trust again” said Senator Leland Yee, a UC alumnus who has authored several bills attempting to curtail UC’s executive pay practices. “It is egregious that while they continue to line the pockets of executives, they take away benefits from low-wage workers who are already living in poverty. Students and taxpayers deserve better.”

Today, the Regents are considering executive salary increases and bonuses that will cost UC almost $6 million annually. In addition, they will consider hiring new executives which will cost the university an additional $2.4 million annually. This brings the total executive salary increases and bonuses in fiscal year 2010 to an additional annual commitment of $11.5 million.

The grossest example of UC excess to be considered today is a “retention salary adjustment” for UCLA Medical Center CEO David Feinberg. Feinberg’s salary is set to increase by an additional $160,300 per year to $900,000. The Regents will also vote to award him an additional $250,000 annual retention bonus. With his annual Medical Center incentive payment, Feinberg's annual compensation will be $1,330,000 per year.

The executive pay hikes come at a time when the university is also considering a cut to retirement income for only low- and middle-income UC employees.

Today, Senator Yee reiterated a call for the UC Regents to give current and retired UC employees a greater voice in the governance of their own pension plan.

UC Regents are considering a far inferior response to a bipartisan resolution passed in 2007 by both houses of the California Legislature (Senate Concurrent Resolution 52 authored by Yee) urging UC to create a new pension board of trustees with equal numbers of plan participants and Regent appointees.

“UC’s failure to give employees who pay into the pension a seat at the table may result in retirement benefit increases for highly compensated executives while retired custodians and food servers will rely on state public assistance programs to pay the rent,” said Yee.

Despite all other California public employees receiving representation on CalPERS, CalSTRS and other public pension boards, UC employees have no representation since the UC Board of Regents act alone as trustees of the UC Retirement Plan. UC unions, faculty associations and student organizations supported the legislature’s SCR 52.

UC Regents Committees on Governance and Investments today will discuss a proposal from the Office of the President to add a UC employee with investment expertise to the Investment Advisory Group, a group of outside investment professionals who advise the UC Board of Regents.

Lakesha Harrison, President of AFSCME Local 3299 which represents UC patient care and service workers, responded that the proposal fell far short of reforming the current insufficient governance structure.

The UC pension plan has a history of conflicts of interest, poor governance, and lack of transparency.

The Regent’s meeting comes while the UC and California State University administrations are attempting to get Governor Arnold Schwarzenegger (R-Los Angeles) to veto legislation that would bring greater transparency to their campus subsidiary organizations.

Yee’s SB 330 will result in greater accountability regarding how student fees and private donations are used at the CSU, UC, and California Community Colleges by placing the institutions’ subsidiary organizations – known as “auxiliaries” – under the scope of the California Public Records Act (CPRA). The bill will also further the priorities enacted by Proposition 59 – approved by 83% of voters in 2004 – granting the public a constitutional right to access public records.

Under existing law, these public institutions are able to hide billions of dollars within their auxiliary organizations and foundations, which are often staffed by public employees. This secrecy has encouraged colleges and universities to create an increasing number of auxiliaries to run campus operations such as food services, parking facilities, housing and bookstores – all of which would be subject to public oversight if they were administered by the agency and not an auxiliary.



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