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CSU Trustee Accuses Chancellor White of “Reverse-Robin-Hood Scheme”

Under-the-Radar Attempt to Give Campus Presidents Annual Salary Increases Averaging $43,000 Fails

08/02/2018

At the most recent meeting of the CSU Board of Trustees on July 24, 2018, Chancellor Timothy P. White attempted but failed to push through annual salary increases for all twenty-three campus presidents that would have cost the system close to a million dollars and averaged approximately $43,000 per president per year, ranging from several tens of thousands to a hundred thousand dollars for individual presidents.  These increases, which were proposed with little notice to the Trustees and less notice to the public, would have come on top of a 3% across-the-board salary increase for the presidents.  However, the Trustees refused to go along with what one of them called a “reverse-Robin-Hood scheme.”  After vocal opposition from Governor Jerry Brown and Assembly Speaker Anthony Rendon, the proposal for now appears dead on arrival. (Watch the video of the 10:00 a.m. meeting of the Committee on University and Faculty Personnel.)  

Trying to Fix a Problem that Doesn’t Exist

The administration justified its proposal by claiming that the increases were needed to be able to recruit and retain presidents from the “national market.”  However, Trustee Rebecca D. Eisen pointed out that over the last six years, only two of the fourteen new presidents came from outside California.  Trustee Douglas Faigin added that all but three presidents who left the system during roughly the same period did so to retire, and the three who reportedly left for compensation reasons received salaries from their new employers that were “far, far beyond” anything the CSU “is or could be considering,” including if Chancellor White’s proposal were adopted.  Trustee Faigin concluded:  “We may be trying to fix a problem that . . . doesn’t exist.”

Flawed Compensation Study Based on Bogus Comparisons Yields the Desired “Evidence”

In support for Chancellor White’s proposal, the administration pointed to a compensation study it commissioned that predictably showed that campus presidents were underpaid whereas other CSU employees were adequately compensated.  However, that study was deeply flawed because it was based on bogus comparisons.  (Read the handout of the compensation study presentation given at the Board of Trustees meeting.)

For starters, the “comparator” schools were selected from around the nation based on their size.  This ignores important differences between these schools and the CSU campuses.  For example, whereas sixteen (80%) of the twenty comparator schools are listed in the influential U.S. News & World Report college rankings as “national schools” and only four (20%) of them are listed there as “regional schools,” the reverse is true for the CSU:  Only four (17%) of the twenty-three CSU campuses are listed as “national schools” and the remaining nineteen (83%) are listed as regional schools.  A related difference is that almost all of the “comparator” schools offer a full range of graduate programs, whereas the CSU campuses are mainly undergraduate schools:  Only a handful of the twenty-three CSU campuses offer any Ph.D. programs at all, and of these, all but one offer only a single Ph.D. program, in each case in conjunction with a non-CSU “national” college or university, such as UC Berkeley, UCLA, or Claremont.  (See list of graduate programs offered by CSU.)

In addition, the study compared the salaries of the CSU presidents to the median of the salaries of the top executives at the “comparator” schools.  The average would have been up to $30,000.00 lower.  The study also ignored the car and housing allowances that add tens of thousands of dollars to the salary of each CSU president, as well as the very generous retirement benefits enjoyed by them.  The consultants who were commissioned to conduct the study explained that they had been instructed to look at base salary only, but acknowledged that “you have to look at total compensation also,” which they didn’t.  

By contrast, in claiming that other CSU employees were adequately compensated, the study looked to regional “comparators” schools, rather than national ones, as it had done for presidents.  This was true even in the case of faculty, which the administration surely would agree are competitive on a national level.  This prompted Trustee Faigin to comment:

"So . . . each time you look at different things [in the study], you use different schools. . . .  He who sets the rules sets the outcome.  So when you pick those comparator schools, you basically pick how the outcomes [of the study] are going to occur.”

Even then, the administration had to acknowledge that CSU’s clerical and administrative support staff salaries average only 81% of the “comparator” salaries.  Not to worry.  In what surely qualified as the quote of the day, Board Chair Adam Day opined:

"We have work to do on clerical . . . but I do think leadership starts at the top, and whatever actions we take, I am glad to know that at a minimum our executives, they have skin in the game . . . and we are setting that example." 

In other words, raise the salaries of your highest paid employees, and the salaries of your lowest paid employees will follow.  Or not.

A Rush to Judgment and a Lack of Transparency

Trustee Faigin expressed his failure to understand the “rush to judgment” with which the administration asked the Trustees to act on the proposal.  He also expressed his concern about the fact that the process had been marred by a “lack of transparency.”  Thus only “one little paragraph” in a different agenda item suggested that the Trustees might be voting on (unspecified) increases in addition to the 3% increase for campus presidents.  That paragraph read:  “These amounts may be adjusted further based on the Trustees decision regarding adopting an Executive Compensation Policy (UFP Agenda Item 2).”  (Read page 3 of Item 3 on the Agenda of the Committee on University and Faculty Personnel.)  The agenda item entitled "Executive Compensation Policy" itself offered few details:  "Based on the results of the study, four models will be presented to establish new executive compensation practices at the CSU [that] recommend salary adjustments targeted to differing percentages of the market midpoint."  (Read page 2 of Item 2 on the Agenda of the Committee.)  Trustee Faigin commented:  “Nobody realizes when they read that agenda item what we are going to be talking about.”  Indeed, no public speakers—neither faculty, nor staff, nor students—had asked to be heard on this issue.  The CSU press release to the media about the meeting was silent on the issue.  As a result, press was virtually absent from the meeting, and of the major California newspapers, only the San Francisco Chronicle briefly reported on the issue, having been alerted by a non-management CSU employee.  All Chancellor White had to offer by way of a response was that he took “deep umbrage” to the claim he had tried to push through these increases under the radar of the public.

Earlier during the meeting, the Trustees gratefully acknowledged the increase of $282.9 million for the CSU in the final State budget.  (Read Item 4 on the Agenda of the Committee on Finance.)  Trustee Faigin again expressed his concern about the reaction by the Legislature if, after that increase, “the very first thing out of the box” done by the Trustees were to “dramatically increase the salaries of our highest paid people in a reverse-Robin-Hood scheme.”  A letter from Governor Brown criticizing the “opaquely worded proposal,” which Trustee Faigin read into the record, reflected that concern.  Governor Brown wrote in that letter:  “I urge you to reject the proposal[].”  Assembly Speaker Rendon made time in his undoubtedly busy schedule to attend the meeting in person and was even more blunt:

"I must say that this idea was never part of our calculus when we considered the budget. . . .  I must say that from knowing my colleagues, from having served in the legislature for six years, if this had been brought up, I am sure that the conversations in our caucus [and] our body would have been different, [and] I am certain that the results of our final vote on the budget would have been very different as well."

After a long pause of stunned silence, the Trustees then tabled the proposal for possible further discussion at a future time.  For now, the proposal appears dead on arrival.  That it was brought up at all, and in this manner, however illustrates the tone-deafness of Chancellor White and the administration when it comes to issues of equity.  The campus presidents, whose salary they sought dramatically to increase, already earn base salaries of between $274,601 and $428,645.  By comparison, the average full-time Unit 4 academic support staff employee makes  $54,192.  Thus, already the lowest paid president makes five times more than the average Unit 4 employee and the highest paid president makes eight times more.  Chancellor White’s proposal would have added to that inequity.  But, in the words of Board Chair Day, “leadership starts at the top,” which the administration apparently understands to mean, “serve yourself first and worry about what’s left over for others later."