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Panel Calls for UC Pay Overhaul

Calling the situation `wholly unacceptable,' a task force cites poor record-keeping, lax oversight and confusing policies, often ignored.

April 14, 2006|Rebecca Trounson | Times Staff Writer

If the University of California is to regain public trust, it must immediately launch sweeping reforms to overhaul how it compensates its senior executives, according to a highly critical report released Thursday.

In the strongly worded document, a task force of business, academic and media leaders described the public university's current approach to compensation matters as "wholly unacceptable."

The report urged UC administrators and regents toward a "sea change" in policy and practice, as well as toward reforming a university culture long accustomed, it said, to using exceptions to circumvent policies.

There also must be consequences for recent problems and findings of apparent wrongdoing -- and those "must be consequential" -- the panel wrote. The 48-page report was presented to UC's governing board in a special meeting held by teleconference, with regents gathered at various sites, including half a dozen at UCLA.

For the last six months, UC leaders have been under fire from legislators, faculty members and the public after media reports that the university system has given millions in bonuses, housing allowances and other perks in recent years to top administrators, even as it raised student fees and cut other costs. Many of the benefits were not initially disclosed, to the regents or the public.

The disclosures have prompted legislative hearings and numerous investigations, including two audits expected in May and a separate, 10-year audit requested by the regents. That report, by PricewaterhouseCoopers, is expected to examine compensation and benefits for about 60 current and former UC executives and will be delivered to the regents at a special April 24 meeting.

The regents could take action on the task force report at their next regular meeting in May, according to regents Chairman Gerald L. Parsky, who appointed the panel in December.

Former Assembly Speaker Bob Hertzberg, co-chairman of the nine-member task force, said Thursday that its findings were especially troubling in light of a similar controversy in the early 1990s, when UC was criticized for excessive compensation of departing executives.

"At least some of the current problems would not have occurred, we believe, if the university had followed policies" developed then, Hertzberg said.

At UCLA, UC President Robert C. Dynes listened quietly Thursday, his face sober, as Hertzberg and his co-chairwoman, Regent Joanne C. Kozberg, outlined the report's findings and recommendations over a speakerphone.

Dynes left the meeting without comment but later issued a statement saying he considered the report a "good road map" for overhauling UC's troubled compensation system.

Overall, the task force criticized UC leaders for long-standing inadequate oversight of compensation, and it found that the university historically has granted so many exceptions to its own policies as to render them largely ineffective.

The report detailed frequent failures by UC administrators to follow existing rules related to compensation, including failing repeatedly to inform regents about the total compensation packages provided to senior managers. But it also found that the relevant policies were confusing, overlapping and sometimes conflicting, making them difficult to follow even for those so inclined.

It found an antiquated, decentralized system of keeping records related to compensation, with UC's 10 campuses, five medical centers and three national laboratories often using different terms to describe stipends, for instance.

That kind of confusion, according to the report, "contributed to an impression that rules and regulations are being deliberately manipulated."

The task force made 21 recommendations, calling for clearer lines of authority for compensation decisions and exceptions, and for stronger enforcement mechanisms, including policies that include specific consequences for violations, ranging from reprimands to dismissals.

The report also urged the regents to adopt tighter limits on senior administrators' service on outside boards and on paid administrative leaves for departing chancellors and others. Among the cases that have drawn criticism is the decision by Dynes to grant former UC provost M.R.C. Greenwood a year's leave at her $300,000-a-year salary after she resigned during a conflict-ofinterest investigation.

Most regents who spoke during the meeting praised the report, but at least one was not satisfied. Regent Frederick Ruiz said the language was not strong enough. "People need to understand that in the business world, people go to jail over this kind of stuff," he said. "It's serious."

The panel's other members are former state Sen. Dede Alpert of San Diego; former University of Michigan President James J. Duderstadt; B. Kipling Hagopian, managing partner of Apple Oaks Partners, an investment firm; Jay T. Harris, USC professor and former San Jose Mercury News publisher; Regent Monica C. Lozano, publisher of La Opinion newspaper; James E. Morley Jr., president and chief executive of the National Assn. of College and University Business Officers; and John B. Oakley, a UC Davis law professor and chairman of UC's systemwide Academic Senate.

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