MnSCU chancellor, trustees eliminate executive bonuses

Watch those payments go bye-bye

Top executives at the Minnesota State Colleges and Universities (MnSCU) system will no longer get the performance-based “bonuses” that have caused so much controversy in the past few years.

Trustee Phil Krinkie confirmed that the board this week eliminated the performance-based payments as part of a compensation proposal for administrators.

The elimination affects the chancellor, vice chancellors and presidents of the system’s colleges and universities — about three dozen people — and applies to all future contracts for those types of executives.

MnSCU awarded a total of $548,000 in bonuses in 2012, system spokesman Doug Anderson said. The average payment was $15,000.

Krinkie said the elimination had been proposed by Chancellor Steven Rosenstone, who he said was being “proactive.”

Krinkie told me:

“Chancellor Rosenstone saw this as a point of contention with legislators and the public, and therefore set out to change the administrative compensation package.”

(Both the House omnibus higher-education bill — which has yet to be passed on the floor — and the Senate bill prohibit such bonuses. Commenting on the House bill, MnSCU Chief Financial Officer Laura King told me Monday that MnSCU officials were “fine” with such legislation, saying the chancellor had mentioned three months ago that he would change the compensation plan for administrators.)

Anderson said lawmakers still have to approve the board’s decision.

Krinkie

Krinkie called the decision “a good step forward,” but said lawmakers and the public misunderstood the payments. He said performance-based pay is common in the business world.

I’m trying to find out whether the new compensation plan is boosting executive pay on other areas to make up for the lost incentives. According to board documents, executives would see no increases in their salary ranges for at least this year.

I asked Krinkie whether MnSCU executives might simply demand in their base pay what they used to get as incentive pay. Krinkie said he didn’t know, and did not have details about how expiring contracts with current execs would be renegotiated in the future.

But he told me:

“If you’d made with your base pay and performance pay $235,000, the likelihood is you don’t want to sign a contract for $200,000 again.”