As University of California officials were preparing to name a successor to retiring system President David P. Gardner, controversy over the outgoing leader's retirement package flared in Sacramento on Thursday.
UC Regent Jeremiah F. Hallisey released copies of a letter he sent March 23 to Gov. Pete Wilson criticizing the size of a retirement package approved for Gardner. Hallisey estimated that it was worth nearly $2.4 million over an 18-year period. Hallisey accused university officials of attempting to keep the regents and the public in the dark about the potential cost of the package.
Hallisey, a Bay Area attorney appointed to the board in 1982 by Gov. Edmund G. (Jerry) Brown Jr., said he released the letter out of concern the regents would be "following the same course of action" today when they meet in San Francisco to consider the nomination of UC Irvine Chancellor Jack W. Peltason to succeed Gardner.
University officials angrily denied that they attempted to hide the amount of the retirement package. They also said Hallisey's calculations are inflated. They put the cost to the university at just over $700,000 in three one-time deferred compensation and supplemental retirement programs, plus $130,000 a year under the university's regular retirement system. Gardner's annual salary is $243,500.
Hallisey's letter prompted swift, angry reactions from two state legislators. Sen. Quentin L. Kopp (I-San Francisco) called a Capitol news conference to denounce the secrecy of the proceedings and the amount for Gardner, who will leave the prestigious public university system's top post later this year to head the William and Flora Hewlett Foundation in Menlo Park. Kopp asked the regents to reconsider their action.
Assemblyman Tom Hayden (D-Santa Monica), chairman of the Assembly Higher Education Committee, blasted the package as "an unfair giveaway at a time when UC students are facing 24% fee increases." Hayden said he will try to reduce the retirement package during state budget deliberations next week. With the state facing a projected deficit of $3 billion this year, the regents approved raising student fees next fall by $550 to $2,824 annually.
"I think Dave Gardner is a great man, but I don't think retiring him is worth ($2.4 million)," Hayden said. "And the fact that it was done in secrecy makes it all the worse."
Hallisey said that regents were warned not to disclose the actions they took March 19 and March 20 until October, when Gardner, 58, will begin a three-month administrative leave. The UC chief will officially end his 20-year tenure with the system on Dec. 31, but has not yet disclosed when he will file for retirement. He will be available to consult with university officials at no additional compensation through June 30, 1995.
Ronald W. Brady, UC senior vice president for administration, said the decisions to provide Gardner with what will amount to $737,757 in pretax compensation were made much earlier. Last month's actions were only taken to align the effective dates to match Gardner's official departure day. Brady said the staff recommendation to release the information in October, when Gardner's leave begins, was quickly overruled by the regent committee that took the initial action March 19.
The actions were taken legally in closed sessions because they involved a personnel matter, university officials said.
Nor was there any attempt to hide the amount, according to UC officials. A news release summarizing the regents' meeting--which was criticized by Hallisey and Hayden for not including details of the retirement package--was meant as a brief summary of the meeting, said Brady, adding that reporters or others who wanted more information could have called to obtain it.
Hallisey estimated that Gardner stands to receive $1.38 million generated by the three special compensation programs. He added another $1 million in regular pension benefits, assuming Gardner would get $80,000 a year if he lives another 18 1/2 years after filing for retirement.
But Brady said Hallisey's calculations inflated the amount the special programs would generate. Further, Gardner is entitled to more than Hallisey calculated under regular pension benefits--$130,000 a year, including $80,000 from the university's public funds and the rest from monies raised from other sources, such as alumni donations. He said it is inappropriate to lump the annual payments into a total retirement package because it is impossible to know when Gardner will begin drawing them and how long he will live.
The special compensation programs were instituted as a recruitment tool for top university officials, Brady said.
Gardner announced last November that he would step down, citing the grief he felt over the death of his wife the previous year.