Extra pay, perks continue to flow despite scandal
Officials override rules to give more than $1 million to 70 execs
Tanya Schevitz, SF Chronicle Staff Writer, May 25, 2007
In the 15 months following the University of California's executive compensation scandal, UC President Robert Dynes and the governing Board of Regents have handed out more than $1 million in extra pay and perks to about 70 top executives.
The extra compensation was allowed under rules that let Dynes and the regents grant exceptions to policy -- in effect overriding regulations that otherwise would not allow the payouts.
The extras included stipends and bonuses, auto allowances, relocation incentives, below-market home loans, and extended temporary housing for new hires.
University officials say the exceptions are needed to attract and retain the best employees. "The continuing need for exceptions suggests that our policies have not kept up with competitive demands,'' said UC spokesman Michael Reese.
UC administrators came under fire last year for extensively granting exceptions, prompting some state legislators to observe that exceptions had become the rule. At a February 2006 hearing before the state Senate Education Committee, Dynes promised lawmakers that he would personally approve all future exceptions in consultation with the regents and that his aides would no longer have that authority.
Such exceptions were a part of the compensation abuses disclosed by The Chronicle in 2005 and 2006 when it was revealed that millions of dollars in extra pay and questionable perks had been shared by a host of top executives, frequently without public disclosure.
While the extra compensation is no longer approved in secret, UC officials have continued to routinely grant exceptions to policy since then. In the 15 months since Dynes made his promise, he and the regents have approved 100 exceptions to policy benefiting about 70 executives.
The exceptions did not apply to any faculty members, except those serving as administrators.
State Senate Majority Leader Gloria Romero, a Los Angeles Democrat and member of the Senate Education Committee who was harshly critical of Dynes and the exceptions last year, said she plans to seek new hearings on "these egregious 'exceptions' which we know now are no exception at all."
"This is pathetic. I have no confidence in the honesty of President Dynes. I hate to say it, but this sort of feels like an 'I told you so,' " Romero said. "Legislators, students and taxpayers should heed that old saying, 'Fool me once, shame on you, fool me twice, shame on me.' These are shameful, arrogant acts of defiance which should not be tolerated -- especially as students and parents face a 10 percent increase in tuition. How do we explain further inaction to them?"
The university has hired Mercer Consulting to review all of its compensation policies to identify problems but also to advise the regents on whether the policies should be revised to "meet the realities of recruiting qualified faculty and administrators to a public university," Reese said.
One example, Reese said, is UC's relocation policy. "(It was) designed long before competitor institutions routinely offered such things as paying the costs associated with selling old homes or reimbursing for closing costs,'' Reese said. "UC offers none of these things, so to remain competitive we have to offer other things -- longer temporary housing, for instance."
The latest exceptions were all recommended by Dynes and forwarded for final approval to the Board of Regents.
In March 2006, just weeks after Dynes' appearance before lawmakers, he recommended that the regents approve 12 exceptions for seven people. The exceptions included 13 round-trip airline tickets to the East Coast and up to $21,000 for six months of temporary housing for Alphonso Diaz, the new vice chancellor of administration at UC Riverside. Policy allows for one house-hunting trip and one month of temporary housing. Reese said the campus needed Diaz to start immediately and the additional trips were provided to help him prepare his house for the move, wrap up family affairs and tend to other personal business back east.
Dynes also recommended a retroactive retention increase of $20,000 and a retroactive merit raise of $6,475 for Cheryl Brown Lohse, associate vice chancellor for development at UC Davis, bringing her salary to $191,475.
In July 2006, Dynes recommended the regents approve 31 exceptions for 21 people, including a $100,000 relocation allowance (in addition to actual moving expenses) and two house-hunting trips for Peter Siegel, who moved from Illinois to become the new vice provost for information and educational technology at UC Davis.
Dynes also recommended a below-market housing loan of up to $850,000 for Marcia Smith, assistant vice chancellor for research administration and compliance at UC Berkeley even though her position did not qualify for the perk. The regents also approved payment to Smith for several other perks not provided for under the policy: 30 days of temporary living expenses, full moving costs and one round-trip house-hunting trip.
Between meetings in October 2006, Dynes recommended to the chairman of the regents and the chair of the regents compensation committee that they approve exceptions for three of the five people whose compensation packages were being considered, including a $49,875 relocation allowance (on top of actual moving expenses) and a below-market loan for Joseph Castro, associate vice chancellor for student academic affairs at UCSF who was moving from UC Santa Barbara, and a $50,000 annual bonus for F. Scott Biddy, vice chancellor of university relations at UC Berkeley.
In January, there were 10 exceptions approved in the 23 compensation packages considered. One was a 10 percent bonus of $22,270 for John Plotts, assistant vice president of finance at the president's office.
During the latest regents meeting in May, seven of the 17 people whose compensation packages were approved by the board were granted exceptions, including an administrative stipend of $20,000 annually for four years for Wendell Brase, vice chancellor of administrative and business services at UC Irvine for his role as project manager in overseeing the replacement of the hospital. The regents also approved a $16,800 stipend annually for four years for Rebekah Gladson, associate vice chancellor and campus architect at UC Irvine for her work on the hospital project.
Reese said exceptions for things such as stipends are the result of significant recent turnover.
E-mail Tanya Schevitz at .
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/05/25/BAG9CPEL5C139.DTL
SF Chronicle 5/25/07 pg 2