Regents study higher pay for officials

Jennifer Knight

Monday, April 28, 2003 | 11:01 a.m.

University officials began struggling last week with the question of how to attract -- and pay -- top-notch university administrators.

A university system Board of Regents committee last week questioned whether to allow school foundations to pay part of a president's salary as a way to up the ante for potential hires.

The problem, some said, is the potential for a conflict of interest.

"If a foundation is supplementing the president's salary, who would they answer to?" asked Regent Thalia Dondero Thursday during a meeting of the committee to evaluate presidential compensation.

Private influence over a public figure was one issue raised at Thursday's meeting. How to be competitive in an increasingly expensive market for top-level university leaders was another.

But if Nevada isn't willing to pay for the rising cost of public university and college presidents, it will fall farther behind, Chancellor Jane Nichols said.

"The key issue that is driving this discussion is that we are falling behind the national average when it comes to presidential salaries and compensation," Nichols said. "The question is: Are we able to continue paying these higher salaries with state funds?"

The practice of adding private money to state pay to spice up a presidential incentive package isn't unique. About 20 percent of college and universities throughout the country do that. While committee members voted to study the issue, allowing the practice would mean the public would not have the right to know how much a president earned from private donors or even which donors were bankrolling them.

"There is not only the issue of accountability ... but also there is the issue of appearance of a lack of full disclosure," Regent Jill Derby said.

Keith Lee, a University of Nevada, Reno Foundation board member, said he had similar concerns.

"I think this is a sensitive issue and one that deserves a lot of thought," Lee said.

Don Snyder, a board member of the University of Nevada, Las Vegas Foundation, was more receptive to the idea.

"We certainly would be willing to entertain that idea if we felt it would be a way to be competitive," Snyder said. "It's extremely important from the foundation's perspective to have the ability to attract and retain a high quality of president."

About 25 out of 167 universities surveyed offer private salaries on top of public pay, according to a study presented at Thursday's meetings.

Institutions such as the University of Alabama-Birmingham offer a $100,000 private salary on top of the president's $300,000 state salary. The president at Louisiana State University, Baton Rouge earns $480,000 a year, with half of that coming from private sources. An additional $100,000 a year is placed in the president's account by the foundation if he completes his contract.

State law mandates that a president's salary must be disclosed to the public if he or she is paid by public funds, but private money received through a university foundation is not subject to such rules. Therefore, anyone wanting to pad a president's salary could do so, without the public knowing the details.

This happened here in the 1990s, said Tom Ray, the general counsel for the university system. Private donors set up an annuity account for Bob Maxson, then president of the University of Nevada, Las Vegas.

At the time Maxson was drawing his state-funded salary and receiving a subsidy from that account, without approval from the Board of Regents, Ray said.

After learning of the account, regents created a policy that requires any such agreements to be cleared by the board.

When it comes to public pay only, Nevada ranks in the 50th percentile, or right in the middle, of the list of university president salaries, Nichols said.

But, Nichols said, "we discovered this does not tell us the whole story."

One question that needed to be answered was whether presidents at institutions in Nevada are well compensated compared to other institutions their size. The board will commission a study of salary compensation packages at peer institutions across the nation to see how Nevada stacks up. Further action is expected in June.