BILL ANALYSIS                                                                                                                                                                                                    





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          GOVERNOR'S VETO
          AB 1413 (Portantino)
          As Amended September 5, 2007
          2/3 vote
           
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          |ASSEMBLY:  |73-1 |(June 7, 2007)  |SENATE: |25-14|(September 7,  |
          |           |     |                |        |     |2007)          |
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          |ASSEMBLY:  |54-21|(September 11,  |        |     |               |
          |           |     |2007)           |        |     |               |
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           Original Committee Reference:    HIGHER ED.  

           SUMMARY  :  Authorizes an ex officio member of the California  
          State University (CSU) Board of Trustees to designate a staff  
          person to attend Trustee meetings on his/her behalf and  
          establishes new requirements governing executive compensation.    
           

           The Senate amendments  :

          1)Clarify that the ex officio member's designee must be employed  
            by the ex officio member for at least one year.

          2)Delete the authority for the designee to act on the ex officio  
            member's behalf.

          3)Specify that the designee may not participate in closed  
            sessions of the CSU Board of Trustees.

          4)Clarify that the executive compensation provisions to do apply  
            to contracts approved prior to January 1, 2008.

          5)Make technical and clarifying changes.
           
          AS PASSED BY THE ASSEMBLY  , this bill:










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          1)Allowed ex officio members of CSU Board of Trustees to  
            designate a person to attend board meetings in his or her  
            absence and to act on his or her behalf at those meetings.

          2)Prohibited the CSU Board of Trustees, on and after January 1,  
            2008, from approving a contract for the hiring of an executive  
            officer unless that contract and its terms are adopted, by  
            resolution, in a duly noticed meeting of the board.

          3)Required that, to the extent the CSU Board of Trustees approve  
            transition pay for executive officers who are ceasing to  
            perform their regular duties, transition pay cannot exceed the  
            compensation received by the executive officer in the last  
            year of regular duties and can only be paid for actual duties  
            performed.

          4)Provided that, when the CSU Board of Trustees approve  
            executive compensation in the form of trustee professorships  
            at the time an executive officer ceases to perform his or her  
            regular duties, this compensation cannot exceed the amount a  
            full CSU professor would be paid for a similar teaching  
            assignment. 
           
          FISCAL EFFECT  :  According the to the Senate Appropriations  
          Committee analysis, negligible fiscal impact to CSU.

           COMMENTS  :  In July 2006, the San Francisco Chronicle published a  
          series of articles about transition compensation provided to  
          former CSU executives who were leaving their positions,  
          revealing previously secret compensation packages that included  
          transition pay, professorships and special benefits.   
          Specifically, the articles revealed that executives were  
          frequently granted transition pay as part of the CSU Executive  
          Transition Program, allowing a full year's pay without specified  
          duties.  Several executives had begun other full-time positions  
          and still received CSU transition pay.  Executives were also  
          provided "trustee professorships," although some executives  
          apparently did not assume teaching duties while receiving this  
          pay.  Finally, these transition pay benefits were not disclosed  
          in public session and were not approved by the CSU Board of  










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          Trustees.

          In November 2006, the CSU Board of Trustees adopted changes to  
          its executive compensation transition program, (including  
          Trustee professorships), limiting eligibility for the transition  
          pay program to campus presidents and executives who intend to  
          return to an identified position with the CSU.  Under the  
          Board's new policy, campus presidents and executives hired after  
          November  
          2006, who leave the CSU are not eligible for compensation if  
          they retire or if they are receiving any non-CSU income.  
           
          GOVERNOR'S VETO MESSAGE  :

               California State University (CSU) Board of Trustees'  
               meetings are already open to the public and therefore, it  
               is unnecessary to statutorily authorize a staff person to  
               attend in a member's absence.  Executive compensation  
               contracts are currently approved in open meetings and last  
               year CSU adopted changes to their transition pay program  
               that are addressed in this bill.  I do not believe that we  
               should be micromanaging the hiring practices at University  
               of California or the California State University system, in  
               ways that may hamper their ability to hire quality  
               instructors and administrators.  However, when appropriate,  
               I do believe that there should be transparency in our  
               educational systems so that the public has confidence in  
               our institutions, which is why I am signing Senate Bill 190  
               that provides some additional openness and accessibility  
               for the public on matters of executive compensation.


           Analysis Prepared by  :    Sandra Fried / HIGHER ED. / (916)  
          319-3960


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