Chancellor to receive, and lose bonuses upon departure
By Michael Howerton
Daily Bruin Staff
SAN FRANCISCO — UCLA Chancellor Charles Young will receive a
$150,000 bonus when he steps down next year. But due to a violation
of another contract with the university, he stands to lose other
bonuses worth an additional $100,000.
On top of his pension and severance pay, Young has been promised
bonuses that could total around $250,000 when he leaves UCLA after
27 years as the school’s top administrator. Yet by leaving two
years before one of his contracts is up, he has put some of his
retirement bonuses in jeopardy.
His bonus had been agreed upon as part of a 1986 incentive
package to entice him to stay on as chancellor at the university –
a position he has held since 1969.
Young’s decision to retire next year raised new concerns that
the practice of departing bonuses for top officials is an
unnecessary drain on university resources.
The most infamous example of this is the $1 million given to
departing UC President David Gardner in 1992. Gardner’s benefit
package was approved by the Board of Regents prior to his
retirement, at the same time they approved Young’s package.
However, just after Gardner left in 1992, the regents reformed
the retirement policies to lower the amount of benefits officials
would receive upon retirement.
Commonly referred to as a "golden parachute," Young called the
package "golden handcuffs." He explained the bonus was promised to
him in 1986 as an enticement for him to stay at his position at
UCLA rather than retiring or seeking a position elsewhere.
"I had lots of other offers at the time," Young said of the
agreement. "The (UC) president offered to have me stay. The golden
handcuffs were the incentive."
The contract Young signed with the university offering these
bonuses, which were approximated in 1992 to be close to
$150,000.
In 1991, a new contract was signed because changes in the
national tax laws put Young in a position where he would stand to
lose benefits if he remained with the university.
Since the Internal Revenue Code 415, passed in 1987, placed a
cap on the amount of benefits that could be earned, the new
contract gave Young back the benefits he would have otherwise lost,
explained Terry Colvin, a university spokesman.
However, the terms of the new contract, which Colvin
approximated grant around $100,000 additionally to Young, were
voided when he announced last month that he would be retiring in
1998.
The contract, which carries an agreed upon retirement date of
July 1, 1999, reads that the benefits will be "immediately
forfeited upon termination of Employee’s services before the agreed
upon retirement date."
Young could challenge this clause and ask the regents to grant
him the package despite his early exit, but he said he has not
decided yet what he will do.
"I had lots of other offers … The golden handcuffs were the
incentive."
Charles Young
UCLA Chancellor
CHARLES KUO
Chancellor Charles Young
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