Cal State trustees OK new policy on executive compensation

Faced with mounting public and legislative pressure to rein in presidential pay packages, California State University trustees Wednesday adopted a new policy that limits executive compensation.

The policy will cap the salary of newly hired presidents at 10% above that of their predecessor, with a ceiling of $325,000 in public funds. The measure was approved unanimously by the Board of Trustees at a meeting in Long Beach.

The action followed a public outcry over the decision in July to pay the new president of San Diego State University an annual salary of $400,000 — $350,000 in public funds and $50,000 from a campus foundation — which was $100,000 more than his predecessor.

The new policy does not limit foundation contributions, but board Chairman Herb Carter, who proposed the cap, said that foundations at most campuses would not have the resources to supplement executive salaries.

It is the first time Cal State has moved to set parameters for compensation of campus presidents. Salaries range from $258,680 to $400,000.

“This is an important moment for the board and an important time in the history of the institution,” said Lt. Gov. Gavin Newsom, a trustee.

Several lawmakers, however, said they would continue to push legislation that curbs the trustees’ ability to set compensation.

“I’m glad that the board took a step in the right direction,” said state Sen. Elaine K. Alquist (D-Santa Clara) whose bill, SB 952, would cap new salary increases at 10% in any year there is a tuition increase. “Nonetheless, I still feel strongly that something this important should be codified in statute, not just in a board policy that can be changed at any time. This is the only way to really protect our students.”

State Sen. Leland Yee (D-San Francisco), who has proposed prohibiting pay raises for top administrators during budget crises or when student fees increase, said the new policy doesn’t go far enough. Pay should be limited for incoming executives to 5% above their predecessor’s, he said.

Lawmakers also said they will continue to scrutinize a list of comparison institutions that, under the new policy, will help guide compensation decisions. A special committee recommended that Cal State’s 23 campuses be sorted into categories, depending on enrollment, research funding and other criteria and that the mean salary of presidents at the comparison schools be used as a reference.

State Sen. Ted Lieu (D-Torrance), among others, has criticized the list as flawed for excluding the fact that, unlike Cal State campuses, many of the comparison institutions have medical and law schools that might warrant higher salaries.

The legislative analyst’s office also took issue with the comparison schools. It noted, for example, that six Cal State campuses with average research expenditures of $40 million, are compared with institutions that average $68 million in such expenditures.

Including such schools as Wayne State University, with research funding of $250 million in the same category appears “to unduly raise the corresponding average executive salary,” Legislative Analyst Mac Taylor wrote.

The controversy over presidential compensation has erupted at a time when Cal State is facing unprecedented reordering in top campus positions. Presidents at Northridge, San Francisco, Fullerton, San Bernardino and the California Maritime Academy retired or announced retirement last year, and two or three more vacancies are expected this year. On Wednesday, Leroy M. Morishita, who had been serving as interim president of Cal State East Bay, was appointed as permanent president and Mildred Garcia, current president of Cal State Dominguez Hills, was appointed to the top job at Fullerton, effective June 1.

As interim president, Morishita was paid $276,055, plus a $60,000 housing allowance. Garcia is paid $295,000 at Dominguez Hills, the same as her predecessor at Fullerton. Housing at both campuses is provided. New salaries for Garcia and Morishita will be set by trustees in March.

carla.rivera@latimes.com