University Times

During J.W. Connolly's six years as chairperson of the Board of Trustees, Pitt senior administrators' pay raises far outstripped those of most faculty and staff, both in dollars and percentage increases.

But Connolly — whose final term as board chairperson ended June 30 — believes Pitt has yet to institute a compensation system that appropriately rewards outstanding leadership.

"One outstanding piece of unfinished business with which the [next] chair must deal, an issue with which I have struggled with little or no success, is management compensation," Connolly said in a videotape screened at the trustees' June 28 meeting.

"I have long believed that we need a compensation program that is goal-based and modeled after industry, that provides senior management members the opportunity to be compensated at the highest levels," he said. "This is a controversial issue, one that will take commitment, courage and imagination to resolve."

Knee replacement surgery prevented Connolly from attending the June 28 meeting, his last as board chairperson.

"I'm sorry that I can't be with you this morning, but the abuse of this job over the last six years has finally taken its toll," Connolly quipped. "So, I am flat on my back in one of UPMC's comfortable beds, with a now-six-day-old new left knee."

According to Connolly, one of the board chairperson's jobs is to "control the agenda for the University." Chairpersons also should deflect flak from the chancellor and help see that administrative decisions are timely and well-communicated, he said.

Connolly, a retired senior vice president of H.J. Heinz Corp., joined Pitt's Board of Trustees in 1985 and became chairperson in 1995. He called Pitt's current board "outstanding" and "the product of three conjoining components":

* Adherence to the belief that board candidates must possess "influence and affluence" and a passion for the University. "This is not a society board, and it is not important that a candidate's name appear in the [Pittsburgh Post-Gazette's] Seen column," Connolly said.

* Outstanding commonwealth trustees recruited for Pitt's board, thanks to the board's nominating committee and what Connolly called the University's "strong, much-improved relationship" with state lawmakers.

* Equally outstanding alumni trustees, recruited by the nominating committee with help from Pitt's Alumni Association.

Keeping those three components in place "will ensure a strong board, one free of politics and, most importantly, of factionalism," Connolly said.

"It's a great example of something that ain't broke, so let's not try to fix it."

During Connolly's tenure, the board set five goals for the University: pursuing excellence in undergraduate education; maintaining excellence in research; ensuring operational efficiency and effectiveness; securing an adequate research base, and partnering in community development.

At the June 28 board meeting, Pitt officials cited progress in each area. For example, applications from undergraduates increased by 97 percent during the last six years, and entering freshmen averaged 50 points higher in SAT scores during that period. Pitt's annual research funding increased from $270 million six years ago to more than $380 million for the fiscal year that ended June 30.

Pitt's $500 million capital campaign, launched publicly last October, has raised nearly $412 million to date. See story on page 1. Pitt's endowment had increased from $463.2 million in 1995 to $1.12 billion as of the end of May 2001, and the University's assets have grown by 83.6 percent to nearly $2.75 billion.

Pitt capital projects launched during Connolly's years as board chairperson included construction of the Multi-Purpose Academic Complex, the Petersen Events Center and the townhouse-style Bouquet Gardens dormitories.

But much remains to be done toward achieving the board's goals, Connolly cautioned, adding that his successor "needs to assure that nothing, and I mean nothing, can distract us from our focus as far as these goals are concerned.

"In this regard," Connolly said, "the chair must take full responsibility for any criticism that this focused management may generate. Indeed, if there are ever any arrows aimed at the chancellor, the chair should step in front of them.

"They only hurt for a little while."

Connolly said he hopes that future board chairpersons "can quietly provide the kind of commercial or business experience that is somewhat scarce at the management level" at Pitt.

"The chair needs to make certain we are identifying opportunities for fiscal improvement, perhaps in the form of new businesses and acquisitions," Connolly said.

Board chairpersons also should see that Pitt administrative decisions are made and communicated on a timely basis, he said. "A decision not made — or, if made, not communicated — in this [University] environment is an invitation to endless debate."

Connolly noted that the new officers of Pitt's University Senate have said they intend to push for faculty participation in institutional decision-making, as have former Senate officers.

"The chair needs to make certain that the board understands what is encompassed by shared governance," Connolly said. "Clearly, there are areas where faculty input is required. Just as clearly, there are business decision areas where it is not.

"The chancellor is the CEO and the University decision-maker," Connolly declared. "The chair needs to help assure that we do not fall into the pit of making decisions by committee."

Connolly urged the board to "pursue and resolve" the challenge of creating an appropriate compensation program for top administrators.

The trustees' compensation committee, which Connolly led as board chairperson, raised Chancellor Mark A. Norden-berg's base salary from $225,000 in June 1996 (when trustees promoted Nordenberg from interim to permanent chancellor) to $325,000 for the fiscal year that ended on June 30, 2001 — a 44 percent, $100,000 increase in five years.

During that same period, the compensation committee raised the base salary of Senior Vice Chancellor and Provost James V. Maher by 51 percent, from $167,500 to $253,000. The $537,000 base salary of Arthur S. Levine, who has been Pitt's senior vice chancellor for Health Sciences as well as dean of the medical school since November 1998, is 26 percent more than Thomas P. Detre was earning ($425,000) when he stepped down as Health Sciences senior vice chancellor.

Pay increases for those and other Pitt senior administrators far exceeded the 3-4.5 percent annual raises (encompassing cost-of-living as well as merit, market and equity increases) for faculty and staff during that same five-year period.

Faculty leaders objected less to growing pay differences between professors and senior administrators than to the corporate-style incentive bonuses that trustees awarded to administrators during Connolly's years as board chairperson. Bonuses ranged from $10,000 to $40,000 for meeting goals set by the trustees.

In December, the board's compensation committee phased out the bonus system for the foreseeable future, rolling administrators' most recent bonuses into their base salaries.

William S. Dietrich II, Connolly's successor as chairperson of the Board of Trustees and its compensation committee, has called incentive bonuses inappropriate for a university. See interview with Dietrich and Chancellor Nordenberg on page 3.

Early in his valedictory videotape, Connolly thanked his fellow trustees for their hard work over the last six years. He paid tribute to a number of Pitt administrators, including Nordenberg ("my partner of the past half-dozen years, our outstanding chancellor and leader"), Maher ("a world-class provost"), Levine ("a senior vice chancellor of Health Sciences of nearly indescribable distinction") and board Secretary Robert E. Dunkelman ("my adviser and my friend").

Trustees and audience members erupted in laughter when Connolly referred to Pitt's hard-nosed executive vice chancellor, Jerome Cochran, as "my friend Jerry Cochran, the University's rottweiler."

In announcing that Pitt trustees were honoring Connolly by dedicating the Masonic Temple ballroom as the "J.W. Connolly Ballroom," the chancellor said: "We will always be indebted to J. Connolly for his leadership and vision in shaping the University of Pittsburgh into the world-class educational and research institution it is today. He has been a valuable source of wisdom, integrity and guidance during my term as chancellor, and I am pleased that he will remain active as a member of the board."

— Bruce Steele