BILL ANALYSIS
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THIRD READING
Bill No: SB 217
Author: Yee (D) and Romero (D), et al
Amended: 5/6/09
Vote: 21
SENATE EDUCATION COMMITTEE : 7-2, 04/29/09
AYES: Romero, Huff, Alquist, Hancock, Maldonado, Padilla,
Wyland
NOES: Liu, Simitian
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Higher education: executive compensation
SOURCE : American Federation of State, County and
Municipal
Employees, Local 3299
DIGEST : This bill prohibits the Trustees of the
California State University 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 moneys appropriated to that segment is less
than or equal to the amount appropriated in the immediately
preceding fiscal year. The bill also requests the Regents
of the University of California to follow this prohibition.
ANALYSIS : The University of California has 10 campuses,
five medical centers, more than 200,000 students, and over
100,000 employees. The California State University has 23
CONTINUED
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campuses, more than 400,000 students and over 50,000
employees.
This bill:
1. Prohibits the Trustees of the California State
University (CSU) 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 moneys appropriated in the
annual Budget Act to that segment is equal to or less
than the amount appropriated in the immediately
preceding fiscal year; the bill also requests the
University of California (UC) Regents to comply with
this prohibition.
2. Defines "executive officer" as including, but not
limited to:
A. For CSU: The CSU Chancellor, a vice chancellor
or an executive vice chancellor of the university,
the general counsel of the university, the
Trustees' secretary or a campus president.
B. For UC: The UC president, a vice president, the
treasurer or assistant treasurer, the general
counsel, the regents' secretary and the chancellor
of an individual campus.
3. Defines "monetary compensation" as including, but not
limited to, a salary, a vehicle allowance and a housing
allowance.
4. Applies these compensation restrictions only to
executive officers entering into a new or renewing an
existing employment contract on or after January 1,
2010.
Background
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
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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
University ($727,487); Auburn University in Alabama
($725,684); and Ohio State University ($1,346,225).
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/18/09)
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
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California State Employees Association
California State Student Association
State Employees' Trades Council
University of California Student Association
OPPOSITION : (Verified 5/18/09)
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.
DLW:do 5/20/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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