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Faculty denounce administrator salaries and AST in letter to Regents

By Allana Akhtar, Summer News Editor
and Shoham Geva, Summer Managing News Editor
Published April 25, 2014

In an open letter to the University's Board of Regents dated April 20, a group of about a dozen University faculty took aim at administrative salaries at the University, publishing an extensive report that claimed spending on select salaries is heavily out of line with peer institutions, and that the University has moved away from its core mission of “teaching, research, and service.”

The 40 page letter asked the Regents to work with President-elect Mark Schlissel to freeze the salaries of upper level administrators until the discrepancies are resolved, to make all payments and salary information public and to freeze or conduct audits to review benefit programs. In connection with the University's proposed shared services plan, the letter also asked for an external audit to investigate the relationship between the University and Accenture, the company which recommended the University adopt the plan and in which Rowen Miranda, associate vice president for finance and original leader of the initiative, previously held a position.

“The faculty and staff of the University of Michigan are as alarmed as all members of our community by the rising costs of tuition and the proliferation of ‘image-building’ nonacademic programs and activities,” the letter read. “The University is in desperate and urgent need of fiscal reform.”

Data in the report was compiled mostly from publicly available salary data as well as information through FOIA and leaked documents. The report asserted that there is a 27- to 41-percent difference in base pay between University administrators and individuals with similar positions at four peer institutions — University of California, Los Angeles; University of California, Berkeley; the University of Texas, Austin; and the University of Virginia. Letter writers wrote while there were understandable cost-of-living differences to be accounted for, the difference was still alarming. Faculty salaries were reported to have a much smaller discrepancy between the University and the four peer institutions, at an average of about 1 percent.

Though the report compares data to solely these four public universities, University spokesman Rick Fitzgerald said the University uses 17 other peer institutions when benchmarking pay, including private institutions such as Harvard, Columbia and Yale. The list of peer institutions is compiled based on the similar field of faculty members that the universities attract.

“We are absolutely convinced that our pay is paid at market and very competitive with those other peer institutions,” Fitzgerald said.

University president Mary Sue Coleman has previously defended high administrator pay several times, most recently in January at a Senate Assembly meeting. At the time, she cited differences in total expenditure — noting the University’s annual $6.7 billion in comparison to $2.1 billion at UC Berkeley — to explain the discrepancies in pay between the University and its peer institutions, as well as growth in research and hospital activity to explain overall administrator salary increases.

The report specifically singles out several administrators — University President Mary Sue Coleman, former provost Phil Hanlon, outgoing chief financial officer Timothy Slottow, and several unnamed deans — as responsible for the differences, citing primarily the usage of bonus money in their respective areas.

The report stated that Stephen Forrest, former vice president for research, and E. Royster Harper, vice president for student affairs, have neither practiced or benefited from the alleged increases, and Lisa Rudgers, vice president for global and strategic communications, Cynthia Wilbanks, vice president for governmental relations, Jerry Mays, vice president for development and general counsel Timothy Lynch have benefited in some ways, but have not practiced it within the units under their purview.

Coleman also addressed bonuses at the Senate Assembly meeting in January. She told the Assembly at the time that bonuses and salary supplements are used by administrators to compensate individuals who take on additional duties.

Because Michigan law does not require that universities disclose bonuses or any other supplemental pay that employees receive, the report drew their allegations mostly from overall expenditure numbers from several categories of bonus pay which was received through FOIA and the leaked documents. These categories included the Administrative Differential, the Salary Supplement, given to particularly successful faculty or staff, the Services Unrelated to Appointment benefit and the Added Duties Differential. The letter noted growths in the funds of each of the programs, yet stated that many academic departments rarely receive such grants.

Fitzgerald said, of the four benefit programs mentioned, in fiscal year 2013 three-quarters of the total benefit money were paid to faculty members, not administrators or staff.

The report noted that many administrators also hold faculty appointments.

The University’s controversial Administrative Services Transformation program was also mentioned as another example of imbalances between faculty and administration. Letter writers stated that following the faculty outcry over AST in November, after which the University announced a delay in the implementation of several facets of the program, many faculty members came under the belief that staff whose main purpose was to assist with teaching or research would not be transferred.

The letter, however, stated these staff are still identified for transfer under the program under the Accounts Receivable/Accounts Payable distinction. The report asserted that these staff members are necessary to assist faculty in performing education and research functions, and that relocating significant numbers could lead to a loss of research funding and other potential downfalls.

“It is the staff most critical to teaching and research and who work most closely with the faculty that got selected to go to AST,” the letter stated.

It noted that in the past 30 years, staff in several dean's offices has quadrupled.

History prof. Anthony Mora, one of the writers of the letter, said it was meant to start a conversation between faculty and administration over why they found such discrepancies in the data compared to similar public universities. He said the letter did not mean to ask administrators to raise professor salaries.

“The letter is focused on administrative pay, and the upper level pay,” Mora said. “I think professor pay is where it should be in terms of compared institutions. The letter is not about increasing professional pay.”

Several University Regents were not available for comment Friday afternoon.

Fitzgerald said the University is still looking through the report, and it's currently too early to discuss potential action it may take.