How the UMN may change compensation policy

Things have been a bit lax, perhaps

The University of Minnesota regents committee on executive pay and transitional leave seems to be sticking to the course it laid out at its last meeting.

The review comes after former President Robert Bruininks gave $2.8 million to outgoing officials in leave and other compensation. In some cases, he waived university policy and allowed some officials to quit the U while on leave and not pay the U back.

(Regents say they wanted to form the committee before the Bruininks flap.)

They now want administrators to take sabbaticals under the same conditions as faculty. They said the U needs to enforce the rule that personnel must pay back the university if they don’t return after paid leave.

The committee wants more transparency in both the hiring and compensation of top leaders, and wants regents to approve major changes in pay.

Committee Chairman Richard Beeson says the U’s new policy appears to be the first of its kind for public universities. He told me:

“There’s a lot of things the university does really well and better than business, but this is an area that I think in general higher ed has been lagging (in). … This is really bringing higher education into a more current, sort of, governance mode that we have in business and we have in the not-for-profit industry.”

Beeson told me he couldn’t say that the new policies would have stopped the Bruininks payouts that caused the public uproar. But he said they at least would have gone in front of regents for approval — or rejection.

(Judging from the committee’s discussion, such approval might come from the chair and vice chair, not the full board.)

Committee members seem to still be trying to find a balance in the amount of involvement regents should have in the compensation process. They want to know what’s going on if they’re ultimately responsible for it, but don’t want to micromanage and get lost in the weeds.

They’re considering moving the areas of separation agreements and pay ranges to board policy from administrative policy.

Beeson told the committee:

“If there’s a change (to a financial agreement) at the time of separation, we don’t have any role in that.”

Regent John Frobenius has a similar concern when it comes to setting pay ranges. He told his colleages:

“Who sets the compensation philosophy for the organization? It’s a board decision. This (new policy) delegates the compensation benchmarking philosophy (to management). …  What’s to give this president that comes 20 years from now the authority to say, ‘We need to be at the 99th percentile, at the very highest end of the market’ — and never tell the board a damn thing about it? I do believe the board has the obligation to have some slight additional oversight over the senior leaders’ compensation.”

Today’s meeting was the last one scheduled before the full board reviews the recommendations next month.