UC tightens rules on severance packages

0 Comments | Oakland Tribune, Jan 19, 2006 | by Michelle Maitre, STAFF WRITER

Facing increasing scrutiny over pay practices, University of California regents have voted to tighten the rules on severance packages worth $100,000 or more.

Under a policy approved Wednesday by a regents subcommittee, any severance agreements that hit that mark must be approved by the university's governing Board of Regents.

The board also will approve severance agreements of any amount for high-ranking university officials, including the president, vice presidents, campus chancellors and others.

University officials previously treated the agreements -- which don't originate from a legal claim -- as administrative matters handled internally by executive personnel.

The agreements, also called separation or termination agreements, are typically offered to help employees "transition" out of a position or out of the university's employ, according to university documents. In December, for instance, the university disclosed that UC Davis Vice Chancellor Celeste Rose was given $50,000 and a $205,000-a-year job -- reportedly with no duties -- after she threatened to sue for discrimination when she was forced to resign, according to published reports. The agreement was not approved by the regents.

That account and other reports detailing $871 million in bonuses, moving expenses and other compensation for highly paid employees have raised the ire of lawmakers, who are calling for audits and hearings into UC pay.

Tuesday, the Joint Legislative Audit Committee asked the state auditor to examine UC pay practices, and state Sen. Abel Maldonado, R-Santa Maria, introduced legislation that would require UC and other public universities to disclose more readily all compensation - - including bonuses -- offered employees.

University officials also are working to improve their pay practices. UC Regents Chairman Gerald Parsky has asked PricewaterhouseCoopers to audit executive pay going back 10 years. An internal task force is examining past practices and will make recommendations on ways to make salary issues more transparent to the public, and the regents created a new subcommittee that will focus solely on compensation matters.

Officials said the new policy governing severance is an interim proposal to tighten current procedures while the audits and additional review are under way. The final policy will likely be revised and refined based on new findings. The proposal will be formally adopted pending ratification by the full board today.

In another pay decision, regents also are considering revising their salary structure for top-paid employees.

Currently, regents approve each salary of more than $168,000, which UC officials describe as cumbersome.

Under the new proposal, top employees would be covered by salary ranges and the UC president would have the power to increase pay within those ranges. The highest salary range starts at nearly $500,000 and goes to nearly $800,000.

UC officials note there are restrictions on how much salaries can be boosted in any one year, and they are required to report all executive salaries to regents at least once a year.

Supporters of the new proposal say it is a more efficient system, but critics, including union leaders, say the ranges are too high.

A regents committee was considering the issue in closed session Wednesday and the full board was expected to take it up today.

The Associated Press contributed to this report. Contact Michelle Maitre at mmaitre@angnewspapers.com.