Spellings will receive $90,000 performance bonus after first year

10 questions with UNC president Margaret Spellings

News & Observer education reporter Jane Stancill sits down for 10 questions in 10 minutes with UNC system president Margaret Spellings on the anniversary of her first year on the job.
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News & Observer education reporter Jane Stancill sits down for 10 questions in 10 minutes with UNC system president Margaret Spellings on the anniversary of her first year on the job.

UNC President Margaret Spellings will receive a $90,000 performance bonus after her first year, with provisions of future incentive pay of up to $125,000 annually.

The action Friday by the UNC Board of Governors came after a closed-door evaluation of Spellings as she completed her first year on the job leading the 17-campus public university system. Future bonuses will be contingent on specific annual performance goals, to be approved by the board in the coming months, said Lou Bissette, chairman of the board.

“They’re going to be based, basically, on our strategic plan,” Bissette said, adding, “It could be things like increasing the graduation rate by X percent, increasing the retention rate by X percent.”

The $90,000 bonus will be awarded by May 31, with $45,000 in cash and $45,000 in a retirement plan deferred until Spellings leaves the university, Bissette said. The deferred portion is contingent on Spellings serving through the end of her five-year contract.

When Spellings was named president a year ago, her salary was at the high end for public university leaders in the United States. Her base salary is $775,000 and was described by the university system then as “highly competitive.”

Tom Ross, Spellings’ predecessor, had a $600,000 salary and no bonus structure, but a consultant told the board in 2015 that the executive compensation at UNC needed to be higher to attract top talent.

Spellings has a five-year contract that runs from March 1 of last year to Feb. 28, 2021. If the board decides not to renew her contract after five years, she will receive a one-year research leave at full salary.

The incentive pay plan represents a philosophical shift in the way the university system compensates its leader. Most previous presidents served as “at will” employees with no contract and no incentives.

“We would like to pay more for the performance, instead of having, you know, annual increases of X percent, just based on longevity,” Bissette said. “We think it’s much more productive for our senior management to have incentive goals.”

Bissette praised Spellings for navigating big challenges, including protests early on and the turmoil around HB2, the transgender bathroom bill. Spellings has overseen the creation of a new strategic plan, dealt with hurricane damage on eastern campuses, hired two chancellors and worked through legislative mandates on tuition designed to lower the cost of education.

Spellings left Friday’s meeting early before the compensation was announced. Bissette said she was headed out of town to a wedding.

But earlier, she discussed goals for the year ahead. She said the focus will be on carrying out the recently adopted strategic plan, which calls for enrolling more low-income and rural students, and improving graduation rates and efficiency, while keeping the price of education affordable. In the legislature this year, the UNC system is seeking new money for analytic data systems and pared down regulations at the university.

“The capacity of this university is really extraordinary,” said Spellings, the former U.S. education secretary under President George W. Bush. “I came to North Carolina because I knew this was a place eager to tackle the biggest challenges in higher education, and that’s exactly what we’re doing together.”

Jane Stancill: 919-829-4559, @janestancill