Regents propose privately funding NU administrators’ salaries

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By MELISSA LEE / Lincoln Journal Star

A group of University of Nebraska regents wants to tap private dollars to help boost top administrators’ salaries, saying NU must pay its leaders well to remain a top institution.

The regents’ proposal, to be considered by the full board at its meeting Friday, calls for a 14.9 percent salary increase for University of Nebraska-Lincoln Chancellor Harvey Perlman and a 19.3 percent increase for NU President J.B. Milliken for the 2008-2009 fiscal year — much of which would be funded by unrestricted money from the NU Foundation.

The regents also are calling for 7 percent, 8.7 percent and 19.9 percent salary increases for the chancellors of the Omaha, Kearney and Medical Center campuses, respectively.

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Members of the University of Nebraska's board of regents (from left) Chuck Wilson, Chuck Hassebrook, Randy Ferlic and Jim McClurg in a 2007 file photo. (LJS File)

Members of the University of Nebraska's board of regents (from left) Chuck Wilson, Chuck Hassebrook, Randy Ferlic and Jim McClurg in a 2007 file photo. (LJS File)

Similar increases also would be implemented for the 2009-2010 year.

“We’ll never be a place where people come to get rich. But at the same time, we don’t want to lose people,” said Regent Jim McClurg of Lincoln, who’s leading the so-called “executive salary equity initiative.”

“We feel the need to do something.”

While the increases appear eye-popping, they’re necessary to help NU keep pace with its peer institutions, where administrators earn far higher salaries, regents said.

And given the high demand for state money for other important initiatives at NU — faculty salaries, financial aid, physical facilities and more — requesting taxpayer dollars for double-digit administrative salary increases isn’t the right option, the regents said.

That’s where the NU Foundation and its $1.6 billion in assets can be of help.

“We recognize that donors want to give to institutions with strong leadership,” said NU Foundation CEO Clarey Castner.

Perlman’s base salary for 2007-2008 is $266,136, all state-funded. He lags 20.6 percent behind chancellors at UNL peer institutions chosen by the regents, such as Texas Tech University, the University of Illinois Urbana-Champaign and the University of Missouri-Columbia.

If the regents’ proposal is approved, Perlman will receive a privately funded salary increase of $27,447 to bolster his state-funded pay raise of $12,242. That would bring his total base salary for the 2008-2009 year to $305,825.

Milliken’s 2007-2008 state-funded base salary is $307,227, 29.2 percent behind his peers. The regents’ proposal would add a $44,852 privately funded salary increase onto his proposed state-funded raise of $14,440. His total salary would be $366,519.

His peers, regents decided, are at the University of Illinois, University of Missouri, Indiana University and other systems.

Those increases would allow NU to be more competitive in a national marketplace should an administrator leave, regents said — though they added the initiative wasn’t prompted by the pending departure of any one administrator.

“If you want quality, you’ve got to pay for it,” Regent Chuck Wilson of Lincoln said.

Supporters of the initiative dismissed concerns that administrators — already seeking to work more closely with the private sector in developing a UNL research campus — would encounter a conflict of interest by having their salaries partially funded by private sources.

The regents, not the NU Foundation, will decide how to distribute private salary support, Castner said.

“The foundation is working with and at the request of the Board of Regents, not at the request of any administrator,” he said. “We’re not going directly to the chancellor or president with salary support. This is to support the institution, not any one administrator.”

And regents intend to make the initiative as transparent as possible, McClurg said.

NU also noted that nearly one-third of all full-time professors, plus some athletic coaches, already receive private financial support.

Private support for faculty through endowed chairs, a long-standing tradition at the NU Foundation, hasn’t created conflicts of interests thus far, Castner said.

“In fact, to the contrary, donors give because they support (faculty) work, not because they want to influence it,” he said.

The NU Foundation also already transfers tens of millions of dollars each year to NU campuses for scholarships, research, construction and other purposes.

Wilson and McClurg said they know critics might still say available money should go toward those missions instead of administrators’ salaries.

But they believe there’s a strong case to be made for keeping NU leaders’ paychecks comparable to their peers’.

Holding up lists of salaries at NU peer groups, McClurg pointed to NU’s rankings — often at or near the bottom.

“There’s your answer right here,” he said.

Reach Melissa Lee at 473-2682 or mlee@journalstar.com.