California State University Board of Trustees Adopts Policy
Limiting Presidential Compensation
(January 25, 2012) – The California State University Board of Trustees today adopted a new policy limiting the amount of compensation paid by state general funds for newly-hired CSU presidents to no more than 10 percent above the previous incumbent's base pay. The new policy was adopted as part of the recommendations made by the board's Special Committee on Presidential Selection and Compensation that has been reviewing the system's selection process and executive compensation structure since last summer.
CSU Board Chair Herbert Carter said the new policy will provide presidential campus candidates, policymakers, the public and others with a reasonable expectation of salary levels for newly hired presidents.
"The new compensation limits and more relevant tiered list of comparator institutions will give stakeholders a good benchmark of where presidential compensation will be set as we move forward," said Carter. "Our continued goal is to recruit and compete for the best leadership possible, but also within articulated budget guidelines."
Under the newly adopted compensation policy, presidential compensation will be guided with reference to the mean of the appropriate tier of comparison institutions, together with an individual candidates' reputation for national policy leadership, length and depth of executive experience, and consistent with other uses of resources within the annual budget.
The newly added policy language states that "….when a presidential vacancy occurs, the initial base salary, paid with public funds to the successor president, shall not exceed ten percent of the previous incumbent's pay."
In the past, CSU presidential compensation was determined with reference to the compensation of presidents at 20 institutions throughout the country identified by the California Postsecondary Education Commission as appropriate comparators. The CPEC comparator list was used for 20 years and included public and private institutions such as USC, Tufts and Rutgers. The CPEC comparators included presidents with salaries as high as $2 million, and created a salary market "gap" with CSU presidents of more than 40 percent. Under the new comparators, the salary gap for CSU presidential compensation has been reduced.
Enrollment and budget were the primary drivers for the development of the new comparison list that groups campuses by tiers against institutions that have similar missions and student profiles. Other criteria used include the number of Pell students and the 6-year graduation rate. The list will be updated annually.
CSU is currently in the process of four presidential searches for leaders at campuses including Northridge, San Bernardino, San Francisco and the Maritime Academy. The adopted compensation policy will be implemented as the board makes presidential selections and determines the salary levels of newly hired presidents.
About the California State University
The California State University is the largest system of senior higher education in the country, with 23 campuses, approximately 427,000 students and 44,000 faculty and staff. The CSU awards about 99,000 degrees annually and since its creation in 1961 has conferred nearly 2.6 million. The CSU is renowned for the quality of its teaching and for the job-ready graduates it produces. The mission of the CSU is to provide high-quality, affordable education to meet the ever changing needs of the people of California. With its commitment to excellence, diversity and innovation, the CSU is the university system that is working for California.
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