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FOR IMMEDIATE RELEASE

UW System Contact: Sharyn Wisniewski (608) 262-6448

March 10, 2000

UW SYSTEM BOARD OF REGENTS APPROVE SALARY ADJUSTMENTS
FOR SYSTEM PRESIDENT, VICE PRESIDENTS AND CAMPUS LEADERSHIP

MADISON -- The University of Wisconsin System Board of Regents Friday approved salary adjustments for chancellors and provosts of 15 UW System institutions, four UW System officers and President Katharine C. Lyall.

"While the salaries we approved fall short of what peer institutions in other states are paying their executives, we have taken a step toward investing in the kind of leadership we need to keep the university strong," said UW Regent President San W. Orr. The salary adjustments are for the 1999-00 pay period, and were delayed due to late passage of the 1999-01 biennial state budget. Salaries will be retroactive to July 1, 1999. (See attached salary schedule.)

In June 1998 the legislature's Joint Committee on Employment Relations established new pay ranges for UW executives, based on an analysis and evaluation process of UW System senior executive salaries conducted by the Wisconsin Department of Employment Relations. The DER report noted that the UW System was at a disadvantage nationally in recruiting and retaining its top leaders.

"The information gathered indicates that salaries for senior executives at the UW, on average, lag the median salaries of the peer institutions, placing the University at a disadvantage in recruiting and retaining senior executives," former DER Secretary Jon Litscher reported to the Governor.

"If anything, the competition for executives in higher education has gotten worse," said Orr. "The same tight labor market that is affecting businesses is being felt in higher education leadership as well."

Orr said that the shifting trend to a knowledge based economy in Wisconsin and other states makes the need to preserve the quality of UW institutions even more critical.

"The UW System is key to the economic vitality of Wisconsin. We can't afford to let that quality erode," said Orr.

The UW System's administrative costs are the lowest in the nation-5.8 percent of its overall budget, compared with an average of 10.8 percent for the other major public university systems in the U.S. This is reflected in comparing salaries of UW leaders with their national peers.

  • UW-Milwaukee Chancellor Nancy Zimpher was hired in 1998 at the salary range maximum of $175,000-at just 85 percent of what her peers are receiving.

  • Madison Chancellor David Ward, who leads an institution ranked eighth best of all top tier public universities, had a 1998-99 salary of $165,025, more than $100,000 below the median for his national peer group

  • UW System President Katharine Lyall's 1998-99 salary was $181,527. The median for her peers nationally was $263,500.

"The duties of a university chancellor or system executive are diverse and complicated," said Orr. "In addition to being excellent administrators they must be fund raisers, ambassadors of their institutions to the larger communities, and have the skills to manage complicated budgets," said Orr.

UW executive salaries approved by the Board of Regents will be funded by existing pay plan dollars and budget reallocation. Tuition will remain unaffected.

(The Board of Regents midpoint reflects the midpoint of salary for peer positions nationwide, less 5 percent.)


BACKGROUND: UW SYSTEM LEADERSHIP SALARIES

  • Former DER Secretary Jon Litscher, in a study (completed in January 1998) requested by Governor Thompson on competitiveness of UW salaries, found that "salaries for senior executives at the UW, on average, lag the median salaries of the peer institutions, placing the University at a disadvantage in recruiting and retaining senior executives."

  • The 1997-99 budget adjustment bill enacted in 1998 included a new salary range program for university senior executives (System President, chancellors, and vice chancellors at UW-Madison and UW-Milwaukee). It was the legislature's intention by establishing a separate (from the state salary groups) salary plan for some of the senior executives to begin to correct the competitive disadvantage.

  • In response to intense competition for faculty nationwide, Wisconsin is taking steps to bring faculty salaries more in line with their peers. We need to put the same effort into retaining and attracting leadership for our institutions. We ought not assess a loyalty tax on our current university leaders.

  • Our UW System president should not be valued at 69 percent of her peers, which she is currently, based on peer salary levels.

  • The accreditation team from the North Central Association, in reviewing UW-Madison, and commenting on the tradition of constraining salaries for senior UW-Madison and UW System officials, said "That the University had managed to recruit and retain leaders of nationally recognized quality and distinction that it has seems near miraculous."

  • Chancellor retention is becoming a problem. Two UW campus chancellors were finalists for other positions: Tom George of UW-Stevens Point and Charles Sorenson of UW Stout. A search will be conducted for the UW-Oshkosh chancellor position. Without competitive pay, competing institutions may lure our best, and prevent us from hiring the best.

  • Tuition will remain unaffected by the salary increases.

  • The executive pay ranges are frozen for next year, effectively capping the salaries below the market rates at a time when competition for higher educational administrators is becoming keener. Several UW leaders will experience a salary freeze in year two of the biennium.

Following are quotes from newspaper editorials in support of UW executive salaries:

To get the most out of a big organization, public or private, you must hire and retain good people at the top. That means paying the market rate for comparable jobs, not measuring professional salaries against pay for political appointees.

--Wisconsin State Journal, October 18, 1999

While the heart has a hard time empathizing with the officials, the head should ponder this: The wages are low by comparison with what similar institutions around the country pay-which seems to be hurting UW's ability to attract and retain high-caliber administrators.

--Milwaukee Journal Sentinel, Dec. 16, 1997

Paying competitive salaries for UW top administrators, while not at the top of anyone's populist agenda, is an investment in the kind of leadership needed to keep the university strong and vibrant. It's an investment the state needs to make.

--Wisconsin State Journal, Nov. 17, 1997

The danger to the university is not imminent poverty to its executives; it's impoverished leadership if it does not stay competitive in the national arena where it must operate both to recruit and retain chancellors, provosts and presidents. UW administrators don't need to set the pace for the nation in salaries. But they have fallen too far behind for the university to be competitive-and weak leadership ultimately will hurt the quality of this state resource.

--The Capital Times, November 17, 1997