The California Senate Committee on Education approved a piece of legislation called SB 217 on Wednesday in an effort to counteract high executive compensations that have been made in the University of California system this year.
SB 217 is designed to reign in this type of spending by preventing pay raises for highly ranked executives in years like the current one, when the university does not receive an increase in funding.
Legislators found the legislation, written by Senator Leland Yee of the San Francisco and San Mateo regions, increasingly important as the state budget has worsened and UC funding has decreased.
“SB 217 will ensure that top execs are not living high on the hog, while the students are unfairly suffering,” Yee said.
According to a statement from Yee’s office, the UC gave a severance package of over $300,000 to $400,000 a year to two top administrators. It is high executive spending that has spurred legislators to take action.
The UC feels this legislation is unnecessary due to the salary freeze that President Mark G. Yudof implemented Jan. 14, according to a letter written by Steve Juarez, associate vice president and director of UC State Governmental Relations.
The freeze prevents increases to salaries and restricts compensations for executives including the president, chancellors, vice chancellors, vice presidents, chief investment officers and other administrative positions as noted in a January statement from the UC Office of the President.
“The arrangements regarding the exiting chancellors were consistent with policy,” said Paul Schwartz, a UC Office of the President spokesman.
The UC has taken the stance that high salaries and compensations are needed in order to keep the best administrators, who could make more money by working for a private corporation.
“The UC needs to be able to compete in the market in order to attract the best and the brightest administrators and executives,” Schwartz said.
However, Yee’s office disagrees.
“There have been egregious practices regarding executive compensation recently. They say they are following the policies of the salary freeze. That is not accurate,” said Adam Keigwin, Yee’s chief of staff. “We can see what having the best executives did for Wall Street. We should concentrate on having the best instructors instead.”
SB 217 will affect the UC president, chancellors, the treasurer, vice treasurer, hospital administrators and other top officials, while it will not effect physicians, professors or lower paid staff such as maintenance crews.
SB 217 will go before the Senate Appropriations Committee next for further review, according to a statement from Yee’s office.