Home < Human
Resources and Benefits Briefing < July
2006
At its regularly-scheduled meeting in San Francisco on May 16-18, the UC Board of Regents endorsed the recommendations of a key task force and adopted several supporting actions, and UC President Robert C. Dynes unveiled an action plan to reform compensation programs at the University of California.
The board also issued a statement affirming its support for Dynes’ leadership, as well as its intention to hold him accountable for enacting needed reforms and to be more directly involved in the overall management of the university. The regents’ full statement can be found online.
The actions taken this week are intended to improve controls over compensation decisions, enhance public disclosure of compensation actions, and yet allow the University to remain competitive for talented faculty and staff in the challenging higher education marketplace.
The board also received the last of several audits intended to establish the facts of compensation provided to senior managers at the University over the last several years.
UC Board of Regents Chair Gerald L. Parsky said he thought this week’s actions, and those expected in the coming weeks, will address the University’s compensation problems and begin to restore the public trust. "I am satisfied that the combination of these actions will begin to restore the public’s trust in the University that plays such a vital role in the state and its economy," said Parsky.
Dynes echoed Parsky’s sentiments. "We must work together to set this university on a firm course that strengthens the way we operate and regains the public’s confidence in us," Dynes told the board. "We must recruit the best and brightest for California. But we must do it in the context of being a public institution."
Dynes’ announced action plan, which he previewed for the Regents by letter on Tuesday, May 16, consists of the following elements:
- Establish an improved working relationship between the administration and the Board of Regents on compensation matters.
- Align university policies and practices with the 1992-1993 principles on executive compensation -- principles never fully implemented by either the Regents or the administration following the 1993 actions.
- Ensure proper disclosure of compensation matters by disclosing fully to the Regents in advance -- and to the Legislature, the media, and the public immediately after actions are taken -- the total compensation packages for a designated group of top positions using a simple, common template. This action also includes developing mechanisms for keeping the governor and Legislature fully informed of compensation policies and practices through regular reports or annual testimony, and development of a new, public web site showing policies, practices, and decisions regarding UC compensation.
- Invest in a modern, comprehensive human-resources information system in order to quickly examine and analyze compensation data and allow the University to fulfill its obligations to public accountability.
- Change UC’s culture regarding compensation issues by "infusing the culture with renewed commitment to upholding the public trust and a renewed appreciation for the importance of modern management systems," according to Dynes.
Dynes also reported that he has established an implementation committee to help address the issues that have been identified by the previous audits and by the Task Force on UC Compensation, Accountability, and Transparency.
A copy of Dynes’ letter to the board describing these actions is available online.
Meanwhile, the Board of Regents took several actions today to:
- Accept the recommendations of the Task Force, with minor modifications. The Task Force made 23 recommendations to improve disclosure and transparency, governance and accountability, specific policies and practices, and competitive compensation at the University of California. The board’s actions to support these recommendations are detailed online.
- Create the new position of "Chief Compliance Officer" at the Office of the President. This position is intended to function "as an independent and objective office that reviews and evaluates compliance issues and concerns within the University," according to the Regents’ action item. Details are available online.
- Adopt a new policy providing that terms of employment separation negotiated with an employee prior to such separation would be subject to reduction or elimination if the University determined that the employee had violated UC policy or applicable law. Details are online.
- Establish a set of guidelines for resolving compensation and personnel issues resulting from the findings of recent audits and management reviews. The guidelines address how the University will pursue corrective action on compensation issues in various kinds of circumstances – such as where there were unintentional errors, where written agreements were made at the time of hiring, where no written agreement was in place, where an administrator acted beyond his or her authority to approve an element of compensation, and the like. The guidelines are available online.
Consistent with the guidelines, the Regents acted to resolve various errors and policy exceptions associated with more than a dozen of the individual compensation cases noted in the recent audit reports. Because this discussion involved confidential individual personnel matters, Regents discussed the cases first in closed session and then publicly reported their final actions following the discussion. Final resolution of the remaining individual cases will be determined at a future meeting.
"As Regents, we take very seriously the policy violations that have occurred and the need for transparency and accountability," said Judith L. Hopkinson, chair of the Regents' Special Committee on Compensation. "We have a duty and responsibility as Regents to ensure appropriate corrective action is implemented."
The Regents also heard a brief presentation from PricewaterhouseCoopers auditors outlining, to the extent information was available, the UC personnel who authorized the compensation exceptions identified in the firm’s recent audit. Regents also received a presentation from the University’s auditor outlining the findings of his internal audit of UC’s entire senior management group. The UC auditor reported that the findings of the internal audit were largely consistent with those of the PwC and state audits. Copies of both presentations and the full internal audit report are available online.
Finally, the Regents also acted to approve a number of new personnel appointments; salary increases needed to retain UC faculty, staff and managers; and compensation for other individual campus, laboratory and medical center personnel requiring regental approval.
Details on all the compensation-related items approved and other matters covered in the meeting can be found online.
