For Wake Tech leader Stephen Scott, the perks add up

dkane@newsobserver.comNovember 18, 2013 

  • The series

    Sunday: Among public employees, a salary gap.

    Today: Working around a salary cap.

    Wednesday: Bonuses for the lucky few.

When Stephen Scott took over as Wake Technical Community College’s president a decade ago, the board agreed to pay him salary and perks totaling about $169,000. More than $156,000 of that was salary, with the rest covering a car allowance and longevity pay.

As the years went by, Scott’s salary grew at a good clip, to more than $248,000 today. But his perks grew much faster.

That car allowance is now worth $20,160 a year, while the longevity payment costs taxpayers more than $8,000 a year. In the years since, the board has added supplemental retirement payments that now cost $22,000 a year, family health insurance now worth $7,555 a year and a housing allowance that now provides him $45,815 a year.

All told, Scott’s benefits are now worth more than $103,000 a year, eight times what they cost when the board hired him. The benefits, combined with his salary, make Scott the best-paid community college president in the state at nearly $352,000 a year, according to a News & Observer survey.

Four other community college presidents who also were receiving tens of thousands of dollars’ worth of perks have been allowed to convert that money into salary. Scott said he is interested in the same move as he approaches retirement. That would provide a big boost to his pension.

“Any president close to retirement would want just exactly that done,” Scott said.

Scott has not made a request of the board, but if he persuaded it to convert the perks to salary and then retired in four years at that same salary, his annual pension could grow by at least $50,000. It would reflect the difference between a $135,000 pension and a $185,000 pension.

Scott, 64, said he doesn’t plan to retire for eight to 10 years.

Scott and the chairman of the Wake Tech board, Jim Perry, say Scott is worth every dollar he is paid. He oversees the state’s biggest community college, a fast-growing institution with a full-time enrollment of nearly 19,500 students. He has been working in community colleges for more than 40 years, including leading three North Carolina colleges and serving as a system executive vice president. He was honored as the state’s top community college president in 2008.

“If you put it all in perspective – what he does, the number of people he impacts, the scope of his duties, the size of his budget, all of the things you have to look at – the $352,000 is, in my opinion, right in the window of where it ought to be,” said Perry, chairman of the board of Waste Industries.

Comparing pay

Scott and Perry acknowledged that much of the pay for perks was intended to get around a salary cap the state had in place until 2010. As a result, the supplemental pay is subject to income taxes. The law still caps how much the state provides to the colleges for presidents’ pay, but it allows the colleges’ boards to contribute as much county money as they see fit.

Many of the state’s 58 community colleges offer no such perks. They pay salaries and provide a car. Some of the larger schools offer a housing allowance, while one has a president’s house on campus. Several more offer a car allowance, but none as generous as Scott’s.

Scott owns a 4,400-square-foot home valued at $553,000 just a few miles from Wake Tech’s main campus near Fuquay-Varina. He drives a 2011 Chevy Tahoe valued at $44,260.

Wake Tech board member Ron Wainwright Jr. leads a compensation subcommittee that recommends how much Scott should be paid. Wainwright, a certified public accountant, said the committee tries to compile pay data from other North Carolina community colleges but has difficulty getting it. He noted the system office hasn’t compiled information on total pay in eight years.

He said his panel took note when the Wilmington StarNews reported in 2011 that Cape Fear Community College President Eric McKeithan’s pay was $334,000 a year. Much of that pay was the result of converted perks, records show. Cape Fear has roughly half the enrollment of Wake Tech.

The compensation subcommittee also relied on a 2011 compensation survey done by the Yaffe & Company consulting firm. But that survey is of presidents at private colleges and universities, whose pay tends to be higher. The median salary was just under $273,000. It listed the median car allowance at $7,356 a year, roughly a third of what Scott receives.

Two years earlier, Yaffe did a survey of community college pay that showed Scott’s salary of $227,532 put him just below the top 25 percent of salaries of presidents at community colleges nationwide with full-time enrollments between 5,000 and 36,000 students. The top salary was $321,000. It is unclear whether Wake Tech relied on the survey; a request for pay comparison records from the college did not produce the information.

A pension boost

Wainwright said Scott’s pay is justified, given the college’s size, growth and success.

“When it comes to Wake Tech, we don’t want to be average,” he said.

Scott said he did not see a problem with converting the perks to pay. Both he and Wake Tech would pay more toward his pension if he converted the perks to salary.

But most perks are not eligible to be considered part of an employee’s pay for pension purposes, so no money was paid in on those benefits during the five years he was receiving a housing allowance, car allowance, extra health insurance and supplemental retirement pay. As a result, other employees and taxpayers would be subsidizing a larger portion of Scott’s pension.

Scott paused when that was pointed out to him. He drew a hand over his chin.

“I hadn’t thought of it that way,” he said.

Kane: 919-829-4861; Twitter: @dankanenando

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