BILL ANALYSIS                                                                                                                                                                                                    


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                              UNFINISHED BUSINESS

          Bill No:  SB 86
          Author:   Yee (D)
          Amended:  9/4/09
          Vote:     21

           SENATE EDUCATION COMMITTEE  :  7-2, 4/29/09
          AYES: Romero, Huff, Alquist, Hancock, Maldonado, Padilla,  
          NOES: Liu, Simitian

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           SENATE FLOOR  :  35-3, 5/26/09
          AYES:  Aanestad, Alquist, Ashburn, Benoit, Calderon,  
            Cogdill, Corbett, Correa, Cox, Denham, DeSaulnier,  
            Ducheny, Dutton, Florez, Hancock, Harman, Hollingsworth,  
            Huff, Kehoe, Leno, Lowenthal, Maldonado, Negrete McLeod,  
            Oropeza, Padilla, Pavley, Romero, Runner, Steinberg,  
            Strickland, Walters, Wiggins, Wright, Wyland, Yee
          NOES:  Liu, Simitian, Wolk
          NO VOTE RECORDED:  Cedillo, Vacancy

           ASSEMBLY FLOOR  :  77-1, 9/8/09 - See last page for vote

           SUBJECT  :    Public Postsecondary Education:  executive  

           SOURCE  :     Author



                                                                 SB 86

           DIGEST  :     Assembly Amendments  delete the Senate version of  
          the bill expressing the intent of the Legislature to enact  
          statutory changes relating to the Budget Act of 2009.

          The bill now place the contents of SB 217 (Yee) which  
          prohibits the California State University Board of Trustees  
          (Trustees) from increasing the monetary compensation or  
          approving payment of a bonus for any executive officer in  
          any year in which the amount of General Fund monies  
          appropriated to that segment is less than or equal to the  
          amount appropriated in the immediately preceding fiscal  
          year and requests the University of California Board of  
          Regents comply with these provisions.

           ANALYSIS  :    The University of California (UC) has 10  
          campuses, five medical centers, more than 200,000 students,  
          and over 100,000 employees.  The California State  
          University (CSU) has 23 campuses, more than 400,000  
          students and over 50,000 employees.  

          This bill:

          1. Prohibits the CSU Trustees from increasing the monetary  
             compensation of or approving payment of a monetary bonus  
             to any executive officer in any fiscal year in which the  
             amount of state General Fund monies appropriated in the  
             annual Budget Act to that segment is equal to or less  
             than the amount appropriated in the immediately  
             preceding fiscal year. 

          2. Defines "executive officer" as including, but not  
             limited to: 

             A.    For CSU: The CSU Chancellor, a vice chancellor  
                or an executive vice chancellor, the general  
                counsel, the Trustees' secretary, or the president  
                of an individual campus. 

             B.    For UC: The UC president, a vice president, the  
                treasurer or assistant treasurer, the general  
                counsel, the UC Regents' secretary, or the  
                chancellor of an individual campus. 

          3. Defines "monetary compensation" as including, but not  


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             limited to, a salary, a vehicle allowance, and a housing  

          4. Applies these compensation restrictions only to  
             executive officers entering into a new or renewing an  
             existing employment contract on or after January 1,  

          5. Requests the UC Regents to comply with this prohibition.

           How is Executive Compensation set now  ?  Although it is  
          currently the purview of the institutions to set the  
          compensation levels for executive personnel, such levels  
          typically reflect compensation levels paid at comparable  
          institutions nationwide (the average of salaries at an  
          established set of comparable institutions, generally the  
          same set of institutions used to set faculty salaries).

          An October 2004 report from the California Postsecondary  
          Education Commission titled "Executive Compensation in  
          California Public Higher Education, 2003-04", its' most  
          recent survey of executive compensation, found that  
          Presidents of the CSU lagged national comparators by 37.8  
          percent while UC Chancellors earned 37.5 percent less than  
          their colleagues in other states.

          A November 2008 annual salary and compensation survey of  
          college presidents conducted by the Chronicle of Higher  
          Education found, in part:

          1. The median (half above/half below) salary for presidents  
             of public four-year colleges was $427,000.  All but one  
             of the UC and CSU presidents fell below the median.

          2. Of the 184 public four-year institutions with student  
             enrollments of more than 10,000, 52 of the presidents  
             had total compensation which exceeded that of any UC or  
             CSU president.  Those with the largest total  
             compensation included: University of Virginia  
             ($797,048); University of Michigan ($760,196);  
             University of Colorado ($740,415); University of Florida  
             ($731,811); (Arizona State ($728,750); Georgia State  


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             University ($727,487); Auburn University in Alabama  
             ($725,684); and Ohio State University ($1,346,225).

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No    
          Local:  No

          Unknown, however, the Assembly Appropriations Committee  
          analysis of an identical bill stated that "Attempting to  
          isolate the potential fiscal effects of this bill is  
          speculative at best.  Under the current circumstances, UC's  
          and CSU's General Fund appropriations have been reduced  
          significantly and the segments' actions to freeze senior  
          management salaries and implement furloughs go beyond even  
          the restrictions in this bill, thus one could argue that  
          the segments' severe budget constraints served the same  
          purpose as this bill without deleting all discretion." 

           SUPPORT  :   (Verified  9/9/09)

          American Federation of State, County and Municipal  
          Employees, (source)
            Local 3299
          American Federation of State, County and Municipal  
            Employees, International
          Associated Students, UC Davis
          California Faculty Association
          California Nurses Association
          California State Employees Association
          California State Student Association
          State Employees' Trades Council
          University of California Student Association

           OPPOSITION  :    (Verified  9/9/09)

          California State University
          University of California

           ARGUMENTS IN SUPPORT  :    Proponents of this bill indicate  
          this bill will assist in reigning in what they see as the  
          exorbitant executive compensation at the UC and CSU systems  
          while students are having their fees increased and the  
          lowest wage workers get minimal compensation.


                                                                 SB 86

           ASSEMBLY FLOOR  : 
          AYES:  Adams, Ammiano, Anderson, Arambula, Beall, Bill  
            Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,  
            Brownley, Buchanan, Caballero, Carter, Chesbro, Conway,  
            Cook, Coto, Davis, De La Torre, De Leon, DeVore, Duvall,  
            Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes,  
            Fuller, Gaines, Galgiani, Garrick, Gilmore, Hagman, Hall,  
            Harkey, Hayashi, Hernandez, Hill, Huber, Huffman,  
            Jeffries, Jones, Knight, Krekorian, Lieu, Logue, Bonnie  
            Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,  
            Niello, Nielsen, John A. Perez, V. Manuel Perez,  
            Portantino, Ruskin, Salas, Saldana, Silva, Skinner,  
            Smyth, Solorio, Audra Strickland, Swanson, Torlakson,  
            Torres, Torrico, Tran, Villines, Yamada, Bass
          NOES:  Charles Calderon
          NO VOTE RECORDED:  Furutani, Vacancy

          DLW:do  9/9/09   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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