At its July meeting, the University of Minnesota’s Board of Regents approved revisions to its policy on administrative compensation. The policy, which provides a standard procedure for compensation, is unique among peer institutions, according to University officials.
Board policies typically follow a standard review cycle, but circumstances required this policy to be discussed earlier than planned. The decision to do so followed former President Robert Bruininks’ controversial 2009 decision to award $2.8 million in administrative leave packages.
The process of updating the policy — which was unique among board policies in its accelerated timeline and use of an ad hoc committee — began this past winter, said Chair Linda Cohen.
When the public became aware of the issue, the board decided it was necessary to accelerate the process.
“Once there was a lot of publicity around it, we wanted to be responsive to that and have people feel confident that the board was having appropriate oversight,” Cohen said.
Administrators and staff members involved in the discussion and research of the board policy on administrative compensation included Amy Phenix, President Eric Kaler’s chief of staff, Kathryn Brown, vice president for Human Resources and Brian Steeves, then the board’s acting executive director.
They worked closely to strategize a way to address board members’ concerns, Phenix said, a process that led to the formation of an ad hoc committee.
The ad hoc committee
Three volunteers from the board were chosen to form a special committee. Chair Linda Cohen decided the committee would meet publicly in order to provide transparency — a process that differed from typical board initiatives.
Regent Richard Beeson, who chaired the committee, said he volunteered, in part, because of the challenge the issue presented.
“I knew it would be a difficult task because of the publicity that preceded it,” he said, “but my pattern has been more to jump into those situations than to stay away from them.”
Examining existing policies
The committee met three times between April 26 and May 25. Attendance ranged from 10 to 20 people, including staff and members of the public, Beeson said. Other board members — with the exception of Regent Thomas Devine — did not attend.
The first meeting focused on examining the University’s existing policies on administrative compensation. Committee members and staff were surprised by what they found, Beeson said.
“Clearly, the policies hadn’t been scrutinized for a number of years, and they hadn’t been critiqued in the way that we would under the ‘new normal’ of governance,” he said.
Looking for best practices
The second meeting focused on identifying how the University’s peer institutions approached administrative compensation.
This was a challenging process, Brown said. The University has an identified peer group that is regularly used for comparisons, but institutions often define administrative positions differently. This makes it difficult to compare salaries, for example.
They also found peer institutions dealt with the issue on an individual basis rather than implementing a standard policy, Beeson said.
The University’s Office of Human Resources is currently looking for ways to find better comparative data on this issue, Brown said, and modifications to the newly adopted process will be made if necessary.
By the third meeting, the committee was prepared to make recommendations for policy changes.
This new process required the board to exert control without micromanaging, Beeson said.
Ultimately, the committee settled on three “guiding principles”:
Presentation to the board
The committee presented its findings and recommendations for the first time at the board’s June meeting.
The regents were presented with extensive information on the appointments of Pam Wheelock as vice president for University Services and Brian Steeves as the board’s executive director and corporate secretary.
Following the committee’s presentation, the regents were able to offer comments and suggestions.
Regent Patricia Simmons asked for the policy to be assessed in one year, a suggestion that will be implemented.
The recommendations were approved without any additional changes at the board’s July meeting.
The policy will now move into the board’s standard rotation for policy review, but its planned one-year rotation is sooner than most.
This will allow the board to “watch how the policy plays out in the real world,” Beeson said.
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