The San Francisco Chronicle has published several critical stories on UC compensation issues, with a particular focus on senior management. This Web site provides UC’s response to these stories, and relevant background and context regarding the University’s compensation needs and practices.
Critical issues: While we take issue with some of the Chronicle’s characterization of UC compensation issues, the story underscores two very important concerns for the University:
- Adequate funding for market-competitive salaries and benefits for everyone
- UC’s accountability to the public
Marketplace demands: UC’s quality is built and sustained by many people and UC is operating in a very competitive market for talent. As the Chronicle itself writes, such compensation packages are “not uncommon in higher education or private enterprise. Like big companies, elite universities around the country give top employees bonuses and other compensation.”
UC must be able to offer competitive compensation packages in order to recruit and retain the caliber of talent we need to keep UC and its contributions to society strong. While compensation or benefits for certain employees may look high or inappropriate to some, they reflect very real marketplace demands, and still continue to lag the market in many instances, which the Chronicle failed to adequately explain.
Public accountability: As an institution established by and for Californians, UC takes seriously its accountability to the public and we believe we must work continually to ensure transparency and openness about how we conduct our business. While we are very public about much of our activities, some of the issues raised by the Chronicle story suggest that some of our policies and practices deserve review. We welcome that input and we have already begun to examine many of our practices.
Thwarting salary erosion and improving compensation for all employees: UC has been working hard toward stopping salary erosion and ensuring competitive compensation and benefits for all employees, and we will continue to do so. For instance:
- The Regents this month will be acting on a proposal to establish a Regental objective of bringing all employees up to market-competitive compensation within 10 years.
- Thanks to the support of the governor and Legislature, UC employees this year are receiving average 3.5% salary increases, and UC is proposing a 4% average increase for 2006-07 (subject to collective bargaining).
- UC several years ago introduced an income-indexed approach to health care premiums, in which those who earn less also pay less for their health care. There are now four bands of rates for health insurance premiums: for those with $40,000 annual earnings or less, $40,000-$80,000, $80,000-$120,000, and $120,000 and above.
- In 2002 and 2003, when State funding for general salary increases faltered, UC allocated additional retirement funds to each employee through a “Capital Accumulation Provision” account. In 2002, 3% of an employee’s covered compensation was credited to the employee’s retirement accounts, and in 2003 the figure was 5%.