The California State University Employee Update

Jan 26, 2012
New Policy Set Forth for Presidential Compensation

The California State University Board of Trustees this week adopted a new policy that caps compensation for newly-hired presidents to no more than 10 percent above the outgoing president’s base pay.

The new policy was recommended by the board’s Special Committee on Presidential Selection and Compensation that has been reviewing the system’s selection process and executive compensation structure since last summer.

The new policy also includes a list of five tiers of institutions that compare with CSU campuses on location, enrollment, budget, six-year graduation rates and research funding. The comparison list will be used as a reference for presidential compensation along with an individual candidates’ reputation for national policy leadership, length and depth of executive experience, and consistent with other uses of resources within the annual budget.

In the past, presidential compensation was determined with reference to the compensation of presidents at 20 institutions throughout the country identified by the California Postsecondary Education Commission (CPEC) as appropriate comparators. The CPEC comparator list included public and private institutions such as USC, Tufts and Rutgers and presidents with salaries as high as $2 million which created a salary market “gap” of more than 40 percent for the CSU’s presidents. That gap has been reduced with the new comparators.

The new policy language states “…when a presidential vacancy occurs, the initial base salary, paid with public funds to the successor president, shall not exceed 10 percent of the previous incumbent’s pay.”

“The new compensation limits, and the more relevant tiered list of comparator institutions, will give stakeholders a good benchmark of where presidential compensation will be set as we move forward,” said CSU Board Chair Herbert Carter. “Our continued goal is to recruit and compete for the best leadership possible, but also within articulated budget guidelines.”

The CSU is in the process of presidential searches at Northridge, San Bernardino, San Francisco and the Maritime Academy. The adopted compensation policy will be implemented as the board makes presidential selections and determines the salary levels of newly hired presidents.

Donors Increase Giving to CSU

Private support to the CSU in 2010-11 far exceeded 2009-10 and returned to a level near pre-recession records, according to the 2010-11 Philanthropic Annual Report presented to the CSU Board of Trustees this week.

In 2010-11, the CSU received more than $344 million in gift commitments, nearly a one-third increase from the $265 million committed in 2009-10. Further, gift receipts, new gifts and pledge payments totaled more than $240 million, a significant increase from the prior year’s $228 million.

Much of the success is credited to a $42 million gift to Cal Poly Pomona from the W. K. Kellogg Foundation.
CSU endowments also continued to recover in 2010-2011, with an increase in market value surpassing 20 percent and pushing the funds above $1 billion. Donors also contributed $54.5 million in new gifts toward university endowments.

“Generous supporters are helping the university excel in countless areas including teaching, research, athletics and arts,” said Garrett P. Ashley, CSU vice chancellor for University Relations and Advancement. “However, these gifts cannot fully replace what the state has cut,” Ashley said, referring to the fact that 97 percent of all charitable gifts received are designated by the donors to support specific interests.

Budget Outlook Grim

The CSU’s sobering budget challenges for the current and next fiscal years were laid out for the Board of Trustees this week.

The CSU’s current state appropriations are $2 billion—almost the same as in 1998-99—but the university has 58,000 more students. This means more reliance on student fees, since the state now contributes almost $4,500 less per student than in 1998-99.

Despite increases in tuition fee revenues and the CSU’s extensive cost-cutting measures over the last several years, including reducing its workforce by approximately 5,000, the CSU cannot make up the loss in state support. Reductions in state funding combined with increases in mandatory costs (such as energy and health care) since 2007-08 have resulted in the CSU having $510 million less in annual resources to serve students.

Rather than restoring funding to the CSU, Gov. Jerry Brown’s proposed 2012-13 state budget calls for the same level of state support as this year, provided that voters pass a November tax initiative to raise income taxes on high-income earners and increase the state sales tax. If that measure fails, the CSU could face an additional $200 million cut which would drop the university’s level of state support to $1.8 billion—the lowest level since 1996-97—but the CSU is now serving 90,000 more students. More information.

Trustees Appoint Garcia as Fullerton President, Morishita at East Bay
The CSU Board of Trustees this week named CSU Dominquez Hills President Mildred Garcia as president of CSU Fullerton, succeeding retired President Milton Gordon. Garcia, who is the first Latina president in the CSU system, has been president at Dominguez Hills since 2007. She was appointed by President Obama in July 2011 to the President’s Advisory Commission on Educational Excellence of Hispanic Americans. More information.

The trustees also appointed Leroy M. Morishita president of CSU East Bay. Morishita has served as the interim president of Cal State East Bay since July 1, 2011. Prior to East Bay, Morishita served for 29 years in various senior administrative positions including chief financial officer at San Francisco State University. More information.

Provided by the California State University Chancellor’s Office.