November 16-18, 2005

ITEM 129-108-R1109  Proposed Policy Amendments Setting Salaries for the Commissioner of Higher Education, Presidents, Chancellors, and Deans of the stand-alone Colleges of Technology (in Helena and Great Falls)

THAT: The Board of Regents adopts the attached amendments to ITEM 128-114-R0905, which the Board adopted September 23, 2005, to set forth a method for determining salaries for the commissioner of higher education, presidents, and chancellors.

BACKGROUND: The State of Montana sets salary levels for chief elected officials and district judges at 100% of the average for comparable positions in Montana, North Dakota, South Dakota, Wyoming, and Idaho. The Board of Regents in September 2005 voted to adopt the same methodology for setting the salaries of the Presidents of the University of Montana (UM) and Montana State University (MSU), with a related formula for setting certain other executive salaries in the University System.

The best available data as of November 1, 2005 indicates that the Presidents at UM and MSU earn approximately 70% of the five-state average regional presidential salary (including Montana). CUPA data indicates that faculty members in Bozeman and Missoula earn approximately 98% and 99%, respectively, of the five-state regional average faculty salary. A recent salary survey by the Commissioner's Office indicates that UM and MSU vice presidents earn, on average, approximately 90% of their peers in the five-state region. Labor statistics indicate that Montana's per capita income is approximately 93% of the five-state average per capita income.

The accompanying policy amendment maintains the formulaic approach of the policy adopted in September, but includes three substantive revisions:

1. Instead of establishing pay for the UM and MSU Presidents at 100% of the average regional presidential pay (using the universities in North Dakota, South Dakota, Wyoming, Idaho and Montana), the policy establishes the pay at 90% of the regional average. The reason for this percentage is twofold: (i) sensitivity to internal pay equity within the Montana University System; and (ii) sensitivity to market compensation levels within Montana generally.

2.  The amendment proposes to continue the current practice by which the Regents directly establish the salary levels of only the Presidents and the Commissioner. Under the policy amendment, the Presidents of UM and MSU would continue to establish the individual salary levels of the Chancellors who report to them, with consideration given to relative responsibilities, performance, market considerations, and service to the University System. The policy does, however, provide for an acceptable range of salary levels, expressed as a percentage of the salaries of the Presidents, and further provides that any salary is subject to Regents' approval.

3.  The amendment extends the policy to all campus CEOs, including the Deans of the Great Falls and Helena Colleges of Technology, with a lower range of compensation for those executives to reflect current relative compensation levels.

The amendment also includes some technical clarifications, including the use of an annual (rather than biennial) salary survey, and an effectiveness date of October 1 (rather than July 1) to coincide with the effectiveness date for salary changes of other employees serving under Board of Regents contracts.