The University Record, January 10, 1994

CESF urges attention to salary improvement program; president details salary program policies for Regents

By Jane R. Elgass

While the Committee on the Economic Status of the Faculty (CESF) “appreciates this year’s salary program,” it urges that “all possible effort be given to continuing, and enhancing, a salary improvement program in the coming year,” John E. Tropman told the Regents at their December meeting. He also said that the faculty’s recent discussions of executive officers’ salaries should receive attention.

Following public release of salary information in November, a number of faculty members decried double-digit percentage increases for some of the University’s top administrators.

Tropman noted that while the Senate Advisory Committee on University Affairs encouraged CESF “to pass along a 10 percent salary increase request,” Senate Assembly declined to name a specific amount. He added that a thorough analysis of peer institutions’ salary programs should be conducted before any specific figure is recommended.

“There is some tumult” on this issue,” Tropman noted, and CESF “has received a lot of ‘traffic’ on the executive officers’ packages. The faculty perceive a difference greater than there is and their discussion should be noted.”

Tropman also noted that CESF encourages the administration to think about “an innovative pay philosophy and a policy that could be derived from that philosophy.”

President James J. Duderstadt took the opportunity afforded by the CESF discussion to brief the Regents on current faculty and executive officer compensation policies (see accompanying material) and present an assessment of the status of compensation for faculty, deans and executive officers as compared with peer institutions.

Duderstadt noted that compensation of associate and assistant professors “is at the top of public universities and competitive with private universities.” In addition, he said that while “compensation of full professors is comparable to that of leading universities, it is significantly behind that of peer private universities. We continue to have a difficult time competing with the compensation offers used to lure away our very best faculty.”

Deans and directors salaries are at the top of public universities and comparable to many privates.

With respect to salaries for selected executive officers, Duderstadt said that independent studies by external compensation consultants and private studies showed that salaries for those individuals “are roughly 15 percent to 20 percent below those of leading public universities. Furthermore, total compensation for these officers falls 35 percent to 40 percent behind that provided at leading public universities.”

The president then outlined the strategies the University uses to address these issues: salary adjustment and flexible compensation schemes.

Salary adjustments take three forms:

  • Merit increases.

  • Equity or market adjustments.

  • Promotion increases.

    “We intend to distinguish more clearly among these by separating our equity, market and promotion adjustments from the normal annual merit program,” Duderstadt explained.

    Use of more flexible compensation schemes might include:

  • Administrative differentials.

  • Incentive compensation.

  • Deferred compensation.

    Activities in this area, Duderstadt explained “have a goal of rewarding strong performance with one-time compensation rather than ratcheting up the base salary.”

    Tropman noted that the president’s presentation on compensation policies “is a great step in terms of laying it out. We make lots of comparisons using percentages, but dollars also are a driver,” he said. “We need more focus on a ‘mix-and-match’ program for some employees.”

    Tropman also noted that many units do not have articulated salary programs, “so it is not clear to faculty what is going on.”

    Units “should be invited to develop a policy in writing,” Tropman said, adding that attention also must be given to administering policy. “Policy doesn’t matter if it is administered poorly.”