BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2007-2008 Regular Session
SB 190 S
Senator Yee B
As Amended March 29, 2007
Hearing Date: April 10, 2007 1
Education Code; Government Code 9
GMO:rm 0
SUBJECT
University of California and the California State
University:
Open Meetings on Executive Compensation
DESCRIPTION
This bill would require the Board of Trustees of the
California State University, including committees and
advisory groups, to consider and take action in open
session on an executive compensation proposal concerning
the Chancellor and other named officials of the CSU, and to
include a disclosure of the compensation package and
rationale for the action.
This bill would similarly impose current notice and open
meeting requirements applicable to the University of
California Regents to standing and special committees and
to advisory groups, as defined. The bill would require an
action taken by a committee of the regents, and final
action by the full board on a proposal for the compensation
package of the President of the University, and other named
officers, to occur in open session and include a disclosure
of the compensation package and rationale for the action.
BACKGROUND
The Bagley-Keene Open Meetings Act (Act or Bagley-Keene
Act) requires meetings of state bodies to be open and
public. The Act requires state bodies to publish a
specific agenda and notice each meeting at least 10 days in
(more)
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advance of the meeting. Under the Act, a congregation of a
majority of members of a state body at the same time and
place to hear, discuss, or deliberate upon any item that is
within the subject matter jurisdiction of the body
constitutes a meeting that must be open and noticed. The
Act requires meetings of advisory committees to be open and
noticed only if the committees consist of three or more
persons and are created by formal action of the state body
or any member of the body. A member who participates in a
meeting in violation of the Act and a member who deprives
or intends to deprive the public of information to which
the public is entitled under the Act are guilty of a
misdemeanor. The California State University is generally
considered a state body, thus it is subject to the
Bagley-Keene Act.
The Regents of the University of California, and standing
and special committees or subcommittees of the regents are
also subject to open meeting provisions similar to the
Bagley-Keene Act. In addition, current law authorizes the
Regents to hold special meetings and to meet in a closed
session to discuss specified matters. Current law requires
action by the Regents on compensation proposals of
principal officers of the Regents of the University to be
taken only in open session.
Spurred by media reports concerning compensation paid by
the University of California (UC) to its executives, the
Senate Education Committee held informational hearings on
the university's policies and practices regarding executive
compensation in 2006. A university-appointed task force
and an independent audit provided additional information
regarding the UC compensation policies and practices. Of
particular interest, the 2006 audit of the UC revealed that
the UC failed to get public approval from the Board of
Regents for some employee compensation packages.
On March 21, 2007 the Senate Education Committee held a
follow-up informational hearing on the same topic for both
the UC and the California State University. The results of
those hearings are reflected in the provisions of this
bill, which creates parallel open session meeting rules for
the Board of Trustees of the CSU and the Board of Regents
of the UC and their various committees, subcommittees,
advisory groups, and task forces, as defined.
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CHANGES TO EXISTING LAW
1.Existing law , the Bagley-Keene Open Meetings Act,
requires meetings of state bodies, including the
California State University, to be noticed to the public
at least 10 days prior to the meeting and requires the
meeting to be open to the public. [Government Code
11120 et seq.] A violation of the Act by a member of the
state body is a misdemeanor.
This bill would extend the requirements of the
Bagley-Keene Act to meetings of the trustees' standing
and special committees or subcommittees and advisory
groups, study groups, or task forces that include one or
more trustees as members and that have continuing subject
matter jurisdiction or have a regular meeting schedule,
and require that any action on an executive compensation
proposal concerning the Chancellor of the CSU, the
president of an individual campus, a vice chancellor, the
treasurer, the assistant treasurer, the general counsel,
or the trustees' secretary be taken in open session.
2.Existing law requires all meetings of the Regents of the
University of California and its standing and special
committees or subcommittees generally to be subject to
open meeting requirements similar to the Bagley-Keene
Open Meetings Act. Existing law authorizes the regents
and their standing and special committees, as defined, to
conduct closed sessions in order to discuss employment,
performance, compensation, or dismissal of university
officers or employees. Existing law requires action by
the regents on proposals for compensation of principal
officers of the regents and officers of the university,
as defined, to be taken in open session.
This bill would expand the definition of "Regents of the
University of California" for purposes of these meetings
to include advisory groups, study groups, and task forces
that include one or more regents, other than ex officio
members of the regents, as members and that have
continuing subject matter jurisdiction or have a regular
meeting schedule. The bill would require action taken on
an executive compensation proposal concerning the
President of the University of California, the chancellor
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of an individual campus, a vice president, the treasurer,
the assistant treasurer, the general counsel, or the
secretary to the regents, to occur in open session.
COMMENT
1. Stated need for the bill
According to the author, the problem this bill seeks to
remedy is "the secret pay policies for top-level
officials of the University of California and the
California State University and give the public the
democratic access they deserve [sic]."
The author further states that "[c]urrent law regarding
public comment, especially at the UC, is inadequate and
considerably less than for other public boards. This
bill will require Trustees and Regents to take action on
all executive compensation packages in a public meeting
at both the subcommittee and full board levels. It will
also require the UC and CSU to fully disclose the
compensation package and accompanying rationale. The
bill will allow for public comment on the specific action
item versus current practice where the governing boards
only allow public comment on all items at the beginning
or end of their meetings. Finally, this bill closes a
loophole that allows Regents or Trustees on advisory
groups to circumvent open meetings law."
The bill, while closing the loophole that allows use of
advisory groups to pass on compensation packages for
high-level officials without public debate and input,
would result in costs to the two university systems for
additional public venues for meetings and notices.
However, the benefit to the public of obtaining
information regarding the compensation paid to executives
by these publicly funded universities is consistent with
the goals of the constitutional requirement of public
access to information about the government and its
activities.
2. Parallel rules on open meetings for UC and CSU; not
quite similar rules for closed sessions
a. Most meetings to be open
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This bill would synchronize the rules for the UC and
for the CSU to require that meetings be open to the
public, by expanding the definitions of "Regents" and
"Trustees," to committees, subcommittees, and advisory
groups, study groups, or task forces that include at
least one Regent or one Trustee as a member and have
continuing subject matter jurisdiction or meetings
that are regularly scheduled. The bill however would
specifically exclude from both definitions advisory
groups constituted for the recruitment of executives
for the university (UC or CSU) and groups of three or
fewer trustees or regents appointed to advise and
assist the university administration in contract
negotiations. All other congregations of trustees or
regents would most likely trigger the Bagley-Keene Act
for CSU and corresponding open meeting provisions
applicable to the UC.
b. Closed meetings
One difference between the rules applicable to the CSU
and those applicable to the UC are the matters for
which closed sessions may be held. The UC, being a
constitutional body and not classified nor treated as
a state agency, is permitted by statute to conduct
closed sessions on specified matters (i.e., matters
affecting national security, conferring of honorary
degrees, matters involving the purchase or sale of
investments for endowment and pension funds, matters
involving litigation, the acquisition or disposition
of property, matters concerning the appointment,
employment, compensation or dismissal of university
officers or employees, excluding individual regents
other than the president of the university, and
matters relating to complaints or charges brought
against university officers or employees, unless the
officer or employee asks for a public hearing).
The CSU, on the other hand is, for all intents and
purposes, a state body; therefore it may have closed
sessions only as permitted by the Bagley-Keene Act.
Although all of the UC list of closed-session subject
matters are on the Bagley-Keene Act list of matters
for which the CSU may hold a closed session, the
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wording of each matter is somewhat different, and, in
the case of the CSU, the prerequisites to the holding
of such sessions, as well as what must be done after
closed session are spelled out under the Act.
c. Consideration and final action on compensation
policy, proposals
Under SB 190, both for the UC and the CSU,
consideration of compensation policies and specific
proposals for compensation of their top executives
would require an open session and public comment.
This is true whether consideration is to be made by an
advisory group or final action is to be taken by the
respective full board.
Also, in both cases members of the public would be
afforded the opportunity to address the committee or
advisory group and then the full board on the proposal
during or before consideration of the action item. One
of the concerns mentioned by the author is the
practice of limiting public comment either at the
beginning of a meeting or at the end, but not during
the discussions or consideration of the compensation
package. SB 190 would require that the public be
heard during the consideration of the compensation
package agenda item.
Legislation by the same author in 2006 (AB 775) was
limited in its scope to the UC, and would have
required the same open meeting discussions of
executive compensation packages as envisioned by this
bill. That bill died in the Senate Appropriations
Committee.
3. Executives' compensation package subject to open
debate
SB 190 would require that consideration by a committee of
the regents or trustees of an executive compensation
program or policy, and any final action taken by the
Regents of the UC or the Board of Trustees of the CSU
occur in an open session. Additionally, action taken by
a committee and final action by the regents or the
trustees on a proposed compensation package for the
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following executives of the UC or CSU must be made in
open session:
For the University of California:
The President of the University of
California;
The chancellor of an individual campus;
A vice president;
The treasurer or assistant treasurer;
The general counsel; and
The regents' secretary.
For the California State University:
The Chancellor of the California State
University;
The president of an individual campus;
A vice chancellor;
The treasurer;
The general counsel; and
The trustees' secretary.
SB 190 would also require that the meeting include a
disclosure of the compensation package and rationale for
the action taken. While this requirement may have value
in the public's being informed of how much executives at
these two public university systems are being compensated
and why, it may have more value if the public had an idea
of what other universities pay their executives. Both
the UC and CSU compete with other universities and
institutions for top academic executives, and competitive
compensation packages are almost a necessity to attract
and retain talented faculty and administrators. Thus,
while a compensation package, in and of itself, may seem
excessive to the general public, it may be quite ordinary
in the context of the world of competitive bids for
topnotch academic executives. The Senate Education
Committee staff had suggested that the bill be amended to
also direct the Legislative Analyst's Office (LAO) to
conduct a comprehensive comparison study of academic
executive salaries and total compensation packages.
SHOULD THIS COMPARATIVE STUDY BE REQUIRED BY THIS BILL?
The media coverage of the informational hearings held by
the Senate Committee on Education, raised questions and
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invited comment regarding the size of compensation
packages given to some retired CSU presidents or
chancellors. A more thorough study by the LAO could be
instructive. However, such a study should not be a
prerequisite to the open meeting provisions of the bill
becoming effective.
4. Advisory groups, study groups, task forces to be
covered by open meeting provisions; exclusions for groups
that assist in contract negotiations or to recruit
executives
This bill would make a significant expansion of groups
that the open meeting laws would cover. It would not
only make committees or subcommittees of the trustees of
the CSU subject to the Bagley-Keene Act (or their
equivalent in the case of the UC), it also would cover
advisory groups, study groups, and task forces that
advise the Board of Regents (or the Office of the
President of the UC) or Board of Trustees (or the Office
of the Chancellor of the CSU).
To be covered by the open meetings requirement, the
advisory group, study group, or task force must include
one or more regents or trustees, other than ex officio
members of the regents or trustees, as members, and must
have continuing subject matter jurisdiction or have a
regular meeting schedule. Thus, an ad hoc group formed
for a one-time or short-term project probably would not
be covered by the open meeting requirement of the
Bagley-Keene Act.
While not opposing SB 190, UC has expressed concern that
SB 190 broadens the definition of "advisory group" beyond
the intent of the Bagley-Keene Act, such that advisory
committees appointed by the President of the UC would now
be required to meet in public. This could chill frank
discussions of whatever the subject matter is that the
advisory group is tasked to address, according to the UC.
Current law requires open meetings of "an advisory board,
advisory commission, advisory committee, advisory
subcommittee, or similar multimember advisory body, if
created by formal action of the state body or of any
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member of the state body, and if the advisory body so
created consists of three or more persons." [Gov. C.
11121(c).] AB 775 (Yee, 2006) would have simply made all
advisory boards to the Regents or to the President of the
UC subject to the open meeting laws. SB 190 limits the
open meeting requirement only to those advisory groups
with one or more non ex-officio members of the Board of
Regents who are formed or appointed by the Board or by
one of its members.
Since the President of the UC is only an ex officio
member of the Board, the UC argues that advisory groups
appointed by the President should be excluded from the
open meetings requirement. Proponents, however, point out
that current advisory groups appointed by the President
of the UC have at least one member of the Board of
Regents or were appointed by a standing committee of the
Board and have continuing subject matter jurisdiction. A
cursory review of reports made by these advisory groups
show that indeed they seem to have continuing subject
matter jurisdiction of import and that they in fact have
standing committee members among their members.
Specifically excluded from advisory groups that would be
covered by the open meetings requirement under this bill
are advisory groups whose purpose is to recruit
executives for the university and advisory groups of
three or fewer regents appointed to advise and assist the
university administration in its contract negotiations.
5. No opposition to the bill
There is no known opposition to this bill. Instead,
there are many supporters who look forward to the light
this bill would shine on executive compensation packages
handed out by the two largest public university systems
in the world. For example, the American Federation of
State, County and Municipal Employees (AFSCME), a
co-sponsor of this bill, writes:
Audits have found that the compensation packages of
hundreds of executives, in both the UC and CSU
systems, were not approved by the full Board of
Regents or Trustees. Over the past year, for
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instance, 143 exceptions were made to compensation
policies to give extra pay or benefits to 113
senior managers. Additional exceptions to a
different group of executives were made 91 times.
All of these pay hikes took place secretly, with no
oversight whatsoever, and frequently included
overly lavish salaries for top executives at a time
when tuition and student fees are rising?"
The changes SB 190 would make to the way compensation
packages and policy are discussed and approved by the
Board of Trustees for the CSU and the Board of Regents
for the UC "would return public confidence - severely
shaken by recent revelations - in the UC and CSU.
Without belaboring the point, the executive
compensation practices of the Regents and Trustees
have been subjected to intense scrutiny by CNPA member
newspapers. The San Francisco Chronicle in particular
has published over 80 stories uncovering a
compensation system that is simply out of control?Many
of these payments were unauthorized, against the
rules, or inappropriate?SB 190 will directly insure
that the UC Regents and CSU Trustee practices align
with settled principles of open and transparent
government?" [Letter from California Newspaper
Publishers Assn. (CNPA) dated February 28, 2007.]
Support: CSU Employees Union/SEIU 2579; the UC Student
Association; the Associated Students of UC Davis;
Council of UC Faculty Associations; The California
Labor Federation AFL-CIO; SEIU; California Faculty
Association; California Nurses Association; Karl
Olson, Attorney at Law; California Federation of
Teachers; Californians Aware (CalAware); State
Employee's Trade Council (SETC-United); California
Family Council; California State Employees
Association; California Teachers Association;
University Professional and Technical Employees
Opposition: None Known
HISTORY
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Source: California Newspaper Publishers Association
(CNPA), AFSCME International and AFSCME 3299
(co-sponsors)
Related Pending Legislation: None Known
Prior Legislation: AB 775 (Yee, 2006) was almost identical
to this bill. Died in Senate Appropriations
Committee
Prior Vote: Sen. Cmte. on Education: Ayes 8, Noes 0.
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