U's executive pay is scrutinized by special Regents panel

  • Article by: JENNA ROSS , Star Tribune
  • Updated: April 27, 2012 - 6:17 AM

A special regents' committee wants compensation packages for departing administrators to be "competitive but also prudent."

Leaders of the University of Minnesota took a first look Thursday at toughening their handling of how executives get paid.

In the first of three meetings, a special committee of the Board of Regents reviewed policies for executive compensation and paid leaves, which have become the subject of controversy after departing administrators received packages that U President Eric Kaler has called "generous." The group wants to ensure that such packages are "competitive but also prudent."

Students and taxpayers are "hoping and expecting that we would define, redefine, put some teeth into our policy," said Regent Dean Johnson. "The question before us is: What is fair compensation and severance in view of who is paying the bill?"

Much of the regents' discussion Thursday focused on "administrative transitional leaves," meant to help executives make the transition back to the faculty.

"I am, quite frankly, less troubled by the severance agreements than I am the transitional agreements," said Regent John Frobenius. He said that he has to be "much more convinced" that similar leaves are typical -- something the U's current and former human resources vice presidents have argued.

"It's one of those things that if education is the only place in the world that's doing this," Frobenius said, "we've really got to justify why we're doing it."

The committee's chairman, Regent Richard Beeson, said the group will look at how the leaves are structured, including their length. At Thursday's meeting, he asked Kaler's administration to draft a scaled approach, in which someone who works as an executive for a year would get shorter leave than one who worked for 10 years.

Next, administrators, with the help of at least one outside consultant, will survey "best practices," review current policies and suggest revisions. The committee will consider that work at meetings May 14 and 25, then draft recommendations for the full board to weigh in June. The regents could enact changes by the fall.

Right now, the 12-member board reviews executives' initial compensation but doesn't monitor pay increases or severance agreements. The governing board does approve general compensation for all employees as part of the annual budget.

The Star Tribune reported that former president Robert Bruininks signed compensation agreements that routinely allowed departing executives paid leaves at their administrative salaries, rather than a lower rate recommended by university policy. In negotiating the deals, Bruininks often waived a requirement that they repay their stipends if they did not return to the faculty.

Right now, the policy states that "salary and benefits are typically paid at the level of the assumed, or resumed, faculty or professional position rather than at the administrative salary level." But it allows leeway, and Bruininks generally paid his administrators at the higher salary.

Kaler told legislators last month that he would propose that board approval be required for "substantial deviations from policy."

Regents on Thursday noted that the board must allow the president the flexibility to pay competitive salaries and change his leadership team. But more board oversight could also provide "greater policy support of the president who, in many ways, has his neck out a little further than he should under the current system we have in place," Frobenius said.

Jenna Ross • 612-673-7168

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