California state executive pay will increase under the new plan

Cal State University trustees will vote tomorrow on whether to raise by how much the system’s 22 campus presidents and others senior executives winpotentially paving the way for up to 15 percent annual raises based on incentives paid by philanthropic funds and base salaries that mirror how much presidents earn at similar universities.

Exact numbers are not available; they will be revealed during the board meeting tomorrow morning. Committee members will discuss the matter and decide whether to support the idea during a scheduled vote before noon. The full council will vote on the measure in the afternoon. The plan will go into effect in the next year or two. No executives would receive raises under the proposed plan this year.

Several hundred unionized staff and faculty rallied outside the board meeting today, raging against proposed leadership raises at a time of budget constraints, layoffs and program cuts.

“I’m angry,” Erin Foote, a union board member for the California Union of Public Employees, said at the rally. The union represents 35,000 employees and students. The union is in dispute with the system additional promotions of about 3%. “We’re going to knock on the doors of our legislators so hard that there will be holes in them until they stand with us in their budget negotiations,” she said, vowing to organize a governor to replace the California state chancellor and appoint more pro-union trustees.

The average base pay for campus presidents is currently $453,000, ranging from $370,000 to more than $500,000. system data shows.

Under the compensation plan, increases in executive base pay will be part of overall pay increases for California state workers. This is in addition to the 15% incentive-based increase in base pay that executives would be entitled to.

The criteria for receiving the 15 percent increases has not been finalized, the system’s interim chief financial officer, Patrick Lentz, said in an interview last week. The chancellor’s office will need a year or two to work on that, he said.

The plan would depart from California’s previous standard of capping presidents’ base pay at a salary that is no more than 10 percent above what their predecessors received. This plan is final updated 18 months ago“inappropriately prevents CSU from offering competitive compensation” to presidents who may lead major universities, chancellor’s office employees writes about an agenda item at the board meeting.

High quality landscape in turmoil

The overhaul comes at a time when the system is strapped for cash and also grapples with epochal challenges to higher education as the Trump administration seeks to return billions in university funding and challenge long-held academic freedoms at universities.

Last month, Cal State pushed through initial hesitation to seek a $144 million loan with zero interest by California lawmakers, a funding deal the Legislature authorized to offset the same size cut in state support for the system this year. System leaders say they want to use the money to offer pay raises to unionized workers and other staff, including top executives.

And Cal State is expecting smaller increases in state support than lawmakers initially signaled. The Legislature intends to increase state spending for Cal State in 2026-27 by just $101 million — much lower than previous promises by Gov. Gavin Newsom of about $250 million.

That’s it upset some members of the system’s trusteeswho say they are good raises for workers – many of them went strike for higher wages — and other spending increases based on those promises.

Cal State explains the need for a plan

In explaining the proposal to raise executive compensation, a top California state official said few people have the experience and skills to manage campuses with budgets in the hundreds of millions of dollars.

“We want people in these positions who are going to make sure that the fiscal health of the campus is in place, that they’re trying to meet enrollment challenges, that they’re dealing with the overwhelming fact that the state is going to be pressured to invest in higher education over the next few years, and the federal government is destroying us,” Lenz said.

“These are the people who need to come in and help us get through these really tough times,” he added.

The state of California has increased staff and faculty salaries by 17 percent over the past four years, Chief Human Resources Officer Frank Hartarte told CalMatters last week. He said campus presidents saw a 7 percent increase during that time period.

The faculty union calculates that presidential salaries have risen 81% over the past two decades, even as inflation has risen 63%.

Although typical pay for an executive director is several times that for faculty and staff, the majority of the system’s spending goes to pay non-executive workers — $5.6 billion, or 73 percent of the system’s budget, California state spokesman Jason Maymon wrote in an email.

The executives — the system-wide chancellor, college presidents and central office vice chancellors — earn a total of $18 million, or 0.25 percent of the state of California’s operating budget, Maymon wrote when asked. It’s about the size of the chancellor’s office cut from your budget this yearpart of a system-wide effort to cut costsincluding the release of some faculty members.

Hurtarte pointed out that nationally, about 30 percent to 40 percent of campus presidents have left their jobs in the past 24 months. Cal State has six campuses with vacant presidential positions, he noted. There is both a major attrition in the college president job market and competition to fill vacancies.

Margarita Berta-Avila, president of the California Faculty Association, which represents 29,000 members, said in an interview that the superintendents had mismanaged state and tuition money and didn’t deserve raises anyway. Some teachers don’t earn enough to afford rent in expensive cities, she said.

“It’s unreasonable for them to even talk about (increases) when people are living in cars,” she said. She is also upset that Cal State Los Angeles management shared faculty names and other personal information with the federal government as part of an investigation into alleged anti-Semitism. The Union has filed a lawsuit California State Board of Trustees.

Payment plan details

Executive compensation under the proposed plan would have four components: base pay, standard executive health and pension benefits plus housing and car privileges for the presidents, a new deferred compensation plan and an opportunity to increase annual pay by up to 15% after a performance review.

While the base salary, like much of the California state budget, will be paid for with tuition and state revenue, an additional 15 percent will be funded by campus philanthropic efforts. Each university has a fundraising department, and they are expected to raise the money to supplement the presidents’ salaries, Lentz said.

That fundraising money will also go toward the new deferred compensation program, essentially additional retirement account for executives in non-profit or government organizations such as universities.

The state of California would not be alone in paying campus leaders with private funds. At the University of California, several campus leaders, called chancellors, have some of them salaries paid with outside means.

“Compensation decisions must also be fiscally sound, consistent with CSU’s community mission, and made within the constraints of available funding and budget priorities,” the agenda item said.

Under that plan, the system-wide chancellor would offer raises every November for board approval.

The new compensation plan seeks to better attract and retain campus presidents by offering new presidents and other executives a base salary that reflects what peer universities pay and the skills the candidate brings. Those partner institutions include the New York State College and University Systems, Texas State University and the University of California, Maymon wrote.

Under current policyraises for incumbents are also no higher than 10%. They take effect only after a satisfactory employee review and analysis of whether the CEO was underpaid compared to other presidents across the country. This approach “restricts competitiveness and adds administrative burden,” the agenda item said. The 10% cap on incumbents will also drop in favor of entitlement to an annual incentive pay of 15%.