Regents to Overhaul President’s Office

University of California regents, scrambling to get on top of a months-long controversy over executive compensation, announced plans Thursday for a major reorganization of the UC president’s office, aimed at bolstering its business practices.

The overhaul will begin immediately and, for the first time at the university, may include the creation of positions for a chief financial or chief operating officer, or both, said board Chairman Gerald L. Parsky as the regents wrapped up a two-day meeting at UCLA.

UC leaders are facing strong criticism from legislators, faculty members and the public after reports that the public university system has given millions in bonuses, housing allowances and other perks to highly paid top administrators in recent years while repeatedly raising student fees. The disclosures have prompted legislative hearings, with more planned for the spring, as well as a state audit and other investigations.

Since the controversy began in November, UC officials have largely defended the salaries and perks, saying they are comparable to those at similar institutions and are necessary to attract and keep the best administrators.

But UC President Robert C. Dynes and others have acknowledged that the university has done a poor job of explaining and disclosing compensation packages, and conceded errors in several high-profile cases.

On Thursday, Parsky said details of the plan to increase financial oversight of Dynes’ office are still taking shape. The regents will also hire an independent compliance officer to report directly to the board, he said.

The board chairman, who heads a Los Angeles investment firm, said the changes are needed to bring the university’s problematic business practices in line with its well-regarded academics. “Going forward, the regents have full confidence that President Dynes understands that concern and shares with us a commitment to addressing the problems that face the university,” Parsky said.

The regents were also briefed on the status of several investigations into the compensation issue, including the state audit authorized by legislators and a separate, 10-year audit by PriceWaterhouseCoopers at the request of the board. Both are expected to be completed by spring or early summer.

Regent Joanne Kozberg, co-chairwoman of a task force that is also examining the pay practices, said the group expects to return to the regents in a few weeks with recommendations for policy changes. Kozberg said she expects those to include limits on the number of outside boards on which UC administrators can serve, as well as clarification of the university’s policies on sabbaticals.

In addition Thursday, the board approved a plan for formal, yearly evaluations of the performance of four top UC officers: the president, the general counsel, the treasurer and the secretary of the regents.

But the regents put off a vote that had been expected Thursday on Dynes’ proposal to place restrictions on severance agreements, saying the measure’s wording needed to be refined.

The proposal, which is now likely to be taken up in May, would allow the university to back out of extras promised administrators at the time of hiring, if an employee violates UC policy or breaks the law.

Dynes has been criticized for allowing former UC Provost M.R.C. Greenwood, who resigned in November under scrutiny for alleged conflict of interest, to take a 15-month leave at her $301,000 administrator’s salary before she begins a new, lower-paying job on the faculty.