UNC chancellors could reap financial rewards if campus goals met

Chancellors of the state’s public universities could get incentive compensation, with payments tied to campus performance goals, according to a plan under preliminary consideration by the UNC Board of Governors.

Several options were presented to the board’s personnel and tenure committee Thursday by a representative of Buck Consultants, a firm hired to explore different types of compensation. Under one scenario, a chancellor could earn deferred compensation of $350,000 if he or she achieves success related to the university’s stated strategic goals, the consultant said. A chancellor would have to stay at least five years to be eligible.

Only one chancellor has that kind of compensation package now – N.C. State University Chancellor Randy Woodson. Last year, Woodson, who has been sought by other universities, received a four-year contract with $520,000 in annual salary and an annual stipend of $200,000 paid by private funds through an entity called the University Leadership Fund established at NCSU. He can also receive up to $1.5 million in performance-based incentives to be paid with non-state funds in 2021.

Another option suggested by the consultant would offer short-term payments tied to specific performance goals. According to an example provided Thursday, a chancellor could get $5,000 to $15,000 per $100,000 of salary based on success with factors such as increasing graduation rates, decreasing student debt or research dollars flowing to the campus.

Gabriel Lugo, UNC Wilmington professor and chairman of the UNC system’s Faculty Assembly, said the idea of awarding bonuses to one leader based on campus performance was “disconcerting.”

“When chancellors are rewarded for student success, research, teaching and so on, it’s not the chancellors who are getting this done, it’s the faculty and the staff who are getting this done,” Lugo said.

The committee also looked at severance pay for chancellors and senior administrators. The idea is not to have term contracts but to have policies that would spell out what happens when an administrator is terminated without cause. Under one proposal, severance for chancellors would range from three-to-nine months pay depending on how long the leader had been employed in the UNC system. If a leader chooses to return to the faculty, however, the severance would not apply. Chancellors now have the right to a six-month research leave before becoming a faculty member at a reduced salary.

Proposed policies would provide for a minimum notice before an administrator was let go. Severance could be as much as six months when the university terminates senior administrators, such as vice presidents, associate and assistant vice presidents, vice chancellors, provosts and deans.

Board member Steven Long said it is “outrageous” to give someone six months of severance pay at a time when higher education costs are a big concern.

“These are high-paying positions,” he said. “So I don’t think there’s a need to change the policy we have now. ... What does it say to the public that we’re talking about cost control and here we are mandating this generous, very generous, severance benefit for high-paid university administrators? I mean, it sends a bad signal.”

As it stands now, if top administrators are let go without cause, there is little protection for them.

UNC Senior Vice President of Legal Affairs and General Counsel Tom Shanahan said having clear, standard severance policies would be prudent to prevent lawsuits. Others said such policies could help with recruiting top talent because some other universities do have contracts for administrators.

UNC President Margaret Spellings said there is a perceived randomness to the current policy, which leaves such decisions up to the discretion of the president. A new policy would solve that issue, she said.

“I think the important part here is that we have certainty,” said board member Joan MacNeill. “People know what they are expecting, what to expect, if there is a separation.”

No vote was taken on the proposals, which are preliminary and under development.

This story was originally published December 1, 2016 at 6:12 PM with the headline "UNC chancellors could reap financial rewards if campus goals met."