UNC board gives secret pay raises to chancellors

The UNC Board of Governors approved pay raises for some chancellors on Friday but did not disclose the new salaries – calling into question the legality of a closed session vote.

The board met behind closed doors Friday for more than 2 1/2 hours to discuss personnel matters, which is allowed under state law.

But the board also authorized pay raises in closed session, said Joni Worthington, vice president for communications, and did not vote on them in open session before adjourning. She said the university’s attorney, Tom Shanahan, maintained the action was lawful. Reporters from several media outlets objected, citing the state’s Open Meetings Law.

It’s unclear which chancellors will receive the raises and how much they will get, but a document obtained by The News & Observer showed that the board considered raises ranging from 7 percent to 47 percent. The average was 25 percent, according to the document.

Worthington said the raises had not been implemented and that the individuals had not been informed. She said information would be released to the public soon.

But the fact that the board took a vote in closed session appears to violate the Open Meetings Law, according to Amanda Martin, counsel to the N.C. Press Association.

Martin said the law allows boards to discuss performance reviews and potential salary increases behind closed doors.

“But there’s nothing in the language of the Open Meetings Law that would permit a closed session vote to set or raise salaries,” Martin said. “And of course, salary is public information, and so it makes sense that they could not do that in a closed session because the law doesn’t protect that information from disclosure.”

The board has recently been criticized by legislators, individual board members and faculty for a lack of transparency around the search for a successor to President Tom Ross. A month ago, the General Assembly passed legislation requiring the full board to consider three finalists, and at one point considered an amendment that would have requiring public disclosure of three finalists. The disclosure amendment was dropped, but the bill became law Friday without Gov. Pat McCrory’s signature.

But the change in the search process is moot. On Oct. 23, the board hired former U.S. Education Secretary Margaret Spellings as president and agreed to pay her one of the highest salaries for a U.S. public higher education system head.

The move to boost executive pay comes as university employees and faculty received a $750 bonus but no raises this year.

Spellings was hired at a base salary of $775,000, which is $175,000 more than current president Tom Ross. She will also be able to earn more money with deferred compensation and with annual bonuses if she meets as-yet-undetermined performance goals, according to her five-year contract.

The move to multiyear contracts for UNC leaders is new. Traditionally they have been at-will employees with certain rights for research leave and a position on the faculty once they step down.

Earlier this year, the Board of Governors voted to raise the salary ranges for chancellors, the president and senior administrators.

The board had formed a special committee to consider the issue, and the group hired a consulting firm. An April report from Buck Consultants concluded that UNC’s compensation was not competitive in market segments where it looks to recruit highly qualified leaders. “None of the compensation packages for Chancellor positions were considered to be competitive for upper tier talent,” the report’s summary said.

Half of the universities studied offered some kind of tax deferred compensation, the study said. The use of incentives is a rarer practice, the study said, but “is becoming increasingly important in higher education” to create a competitive advantage in recruiting.

G.A. Sywassink, chairman of the board’s personnel and tenure committee, said the study was done to make certain that UNC leaders’ pay ranges were consistent with the market. The idea, he said, was to make sure UNC wasn’t too high or too low in executive pay.

“Whatever we did today we thought was justified, and we thought that we needed to be fair and honest with the chancellors we have,” Sywassink said.

He said the board is most concerned with UNC students.

“We have to have the right people in charge and the right people teaching them,” he said, adding that the board is committed to addressing faculty salaries “as soon as we can make that happen.”

Michael C. Behrent, associate professor of history at Appalachian State University, said faculty haven’t seen meaningful raises even as tuition and administrative bloat have increased on campuses. The student debt crisis in the United States is partly due to rapidly escalating salaries of administrators, he said.

“While I think it’s abhorrent and terrible, I would want to hide this if I were a Board of Governor, too,” Behrent said. “Their lack of transparency makes sense because they have every reason to be ashamed of the decisions that they’re making.”

At least one UNC chancellor has already received a more handsome pay and benefits package.

This summer, the board raised compensation for Randy Woodson, chancellor of N.C. State University, who has been courted in recent years by several other universities. He was given a four-year contract with $520,000 in annual salary and an annual stipend of $200,000 paid by private funds through an entity called the University Leadership Fund established at NCSU. Woodson will also reap increases through a performance retention plan, with up to $1.5 million in performance-based incentives to be paid with non-state funds in 2021.

The university announced this week that Woodson and his wife, Susan, had given NCSU $1.15 million to set up a scholarship fund for the children of NCSU employees.

Jane Stancill: 919-829-4559, @janestancill