April 29, 2014

HIGHER EDUCATION BUBBLE UPDATE: University of Michigan faculty question administrator pay in letter to Board of Regents.

An open letter to University of Michigan’s Board of Regents from about a dozen of the school’s faculty criticizes the school’s administrative pay and bonus system.

“The University is in desperate and urgent need of fiscal reform,” the letter, dated April 20, states. Reform, it continues, should include: “arresting the steep increases in salaries to top administrators, reforming the secretive bonus culture of the Fleming administration building.”

In the 40-page letter, the authors ask regents to freeze the salaries of upper administrators, begin releasing the full salary information of employees, instead of just releasing the base salaries that are required by law, and review supplemental pay practices at the school.

The letter’s authors suggest that faculty pay has been increasing modestly in the last decade, while administrator pay at the school has increased substantially, both through hikes in base salaries and through supplemental pay. . . .

The letter uses information obtained through leaked documents and a Freedom of Information Act request to determine that supplemental pay — in the form of administrative differentials, salary supplements, compensation for services unrelated to appointments and added duties differentials — grew by $33 million between 2004 and 2013, reaching $46 million.

“The growth of it, quite frankly, is what they need to explain,” Gaggio said. . . .

Data obtained by the professors show that some administrators received salary supplements in excess of $50,000.

For example, Rowan A. Miranda, an associate vice president for finance, earned a base salary of $330,000 in 2012, and that year also received $130,000 in additional compensation; vice president of government relations Cynthia Wilbanks received $58,007 in supplement compensation in 2013, in addition to her salary of $296,324; and chief information officer Laura Patterson earned a base salary of $279,545 in 2010, and that year also earned $70,585 in additional compensation, according to data obtained by the faculty members.

Administrators control the money, so naturally they wind up with more of it. This is, of course, a national problem.

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