University of Minnesota to clamp down on executive severance pay

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• Sample of U of M executives and their compensation

University of Minnesota leaders are looking to tighten up the way departing executives are paid.

A special committee of the U of M Board of Regents is reviewing policies on executive compensation and administrative transitional leaves and hopes to make “minor” corrections, something regents have been considering for a couple of years.

Compensation packages of high-ranking administrators “must be competitive, (but) they must also be prudent,” Board Chairwoman Linda Cohen has said. “The board also seeks to be responsive to policymakers and the public.”

Former University of Minnesota Duluth chancellor Kathryn A. Martin is one executive who departed with a large sum of money, to the tune of more than $500,000. Martin’s departure pay included a two-month sabbatical worth $38,875, a year’s pay of $233,250 as severance, another $30,000 in retirement payments — and a 15-month “transitional leave” that amounted to another year’s pay.

Long-standing senior administrators often receive their full salary during transitional leaves, which are meant to give them time to do research or special studies before moving back to a faculty position. In a 2010 News Tribune story, a U of M spokesman said the financial package for Martin’s leave — her $233,250 salary but on an 80 percent appointment — was appropriate because of her 15 years of service as chancellor and her successful fundraising efforts.

U of M policy says that if employees don’t return as faculty, they are to pay back all or some of what they earned during their transitional leave. But that can be waived by the president, and routinely was by former U of M President Robert Bruininks, according to the Star Tribune. Martin is not returning to UMD, but received a waiver from Bruininks because of the amount of work she did during her transitional leave, said Chuck Tombarge, director of public relations for the U of M.

The Star Tribune also reported Bruininks signed compensation agreements that allowed executives leaves at their administrative salaries rather than a lower rate recommended by university policy. Current President Eric Kaler has called those packages “very generous” and lawmakers have criticized the practice.

“Personnel compensation decisions for executives are probably best made with several people involved, and I think that will be a likely outcome,” said Regent Richard Beeson, chairman of the special committee.

The 12-member Board of Regents isn’t involved with those decisions beyond initial compensation.

The committee is looking at “potential gaps” when it comes to executive compensation and transitional leaves and will gather best practices in higher education, Beeson said.

“This topic is important, but relatively simple to fix,” he said, noting he wasn’t looking at what was done in the past, but “focusing on policy going forward.”

“I’m not going to criticize President Bruininks,” he said, because he wasn’t on the board then and wasn’t privy to Bruininks’ decisions. “We want the right balance for decision-making for the president’s office and the board. … At what level it starts and what it looks like is what we will be focusing on. At the end of the day we want to be smart about changes.”

The committee, conducting discussions publicly, will meet twice more before making recommendations to the Board of Regents in June. Any changes would take place in the fall.

Tags: news, money, education, umd