Our Strong Reservations About the Approach in SB 217 — Updated!

After CUCFA sent the following letter to Senator Yee, SB 217 was updated. The proposed legislation no longer ties executive compensation to student fee levels. The current bill (as of April 20) restricts executive compensation in years when the state does not increase general fund appropriations for UC.

April 13, 2009

Senator Leland Yee
State Capitol, Room 4074
Sacramento, CA 94248-0001
Fax: 916-327-2186

Re: SB 217

Dear Senator Yee,

We have long supported your efforts in repairing UC’s executive compensation practices. For example, we supported your bill, SB 190 of 2007, now known as the Higher Education Governance Accountability Act of 2007, which required UC executive compensation be debated in open meetings. Unfortunately, this issue has continued to be a source of concern and frustration.

Nevertheless, we have strong reservations about the approach in SB 217. It punishes UC executives if student fees rise, whether those increases are appropriate or not. It is the Regents who raise the fees and they may decide to do so as a result of a long term compact with the Governor or as a last resort to maintain the quality of a University in the face of inadequate state contributions among other possible reasons. Indeed, recent alarming and very regrettable increases in fees have been needed to cover declines in state support for UC’s core budget.

An additional concern is that this approach could create a conflict of interest in which UC officials could benefit individually from opposing fee increases even when the larger good of the University makes them necessary. In that case, UC quality would then suffer.

Given the unpredictability of future developments in UC funding, we think that even further openness in UC executive compensation practices could be helpful and provide additional motivation for restraint. One approach would be to require the University to post on a readily accessible public website a history of the total compensation for each executive officer position and the number of such positions in the University. Going forward, the rationale for each change in compensation would have to be explained on the website. The present posting of Regents meeting minutes falls far short of such requirements.

We share your commitment to the educational mission of the University of California and believe that even greater transparency, openness, and accountability can encourage restraint in executive compensation without unduly undermining the ability to make decisions on fees that best balance the goals of quality, access, and affordability.

Respectfully yours,
Joe Kiskis
CUCFA Vice President for External Relations,
and Professor of Physics, UC Davis

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