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December 4, 2008

Trustees freeze pay for chancellor, senior administrators

Pitt trustees are holding the line on the salaries of Chancellor Mark A. Nordenberg and the University’s senior administration.

In a compensation committee teleconference meeting Wednesday, Dec. 3, committee chair Ralph J. Cappy said, “Based on both performance and benchmarking it is clear that Chancellor Nordenberg and other senior officers merit a substantial salary increase.” However, on the chancellor’s recommendation, the committee voted unanimously to hold the officers’ pay at last year’s levels.

Despite what was termed an outstanding year of progress at Pitt, “The committee understands that we are moving through uniquely challenging times and accepts this recommendation … as another example of the Pitt-first attitude that has characterized the distinguished service of this leadership team,” Cappy stated.

Nordenberg’s current salary is $460,000. Salaries for the other senior officers are: Arthur S. Levine, senior vice chancellor for Health Sciences and dean of the School of Medicine, $702,000; Jerome Cochran, executive vice chancellor, $388,000; James V. Maher, senior vice chancellor and provost, $348,000; Amy K. Marsh, treasurer and chief investment officer, $320,000; Arthur G. Ramicone, vice chancellor for budget and controller, $265,000; and B. Jean Ferketish, secretary to the Board of Trustees and assistant chancellor, $190,000.

Under an extension of the trustees’ 2002 retention incentive pay plan, Nordenberg will receive an additional $75,000 of deferred pay if he remains as chancellor through June 2009 while Cochran, Maher and Ramicone each stand to receive an additional $50,000 in deferred pay if they remain in their positions through the end of the fiscal year. Retention pay was not among the agenda items at the compensation committee meeting.

The last time administrative officers’ pay was frozen was in FY96 following a freeze in Pitt’s state appropriation.

In anticipation of the legislators’ action, then-Chancellor J. Dennis O’Connor in April 1995 ordered a University-wide hiring and salary freeze. Officers’ pay, including O’Connor’s, was frozen through the June 2006 fiscal year end. Some lower-paid employees received raises beginning in January 1996.

Citing grim economic news that has appeared in recent headlines and reiterating his own Oct. 1 message to the University community that warned of looming economic challenges, Nordenberg told the committee, “Though it may be hard to make more specific predictions, it seems quite clear that tougher times are coming and we need to be prudent in preparing for them.”

In asking that no salary increases be awarded to himself or the other officers this fiscal year, Nordenberg said, “I make that recommendation despite the high levels of performance and significant achievements that marked the work of these officers during the past year.”

Stating that the officers supported the pay freeze, Nordenberg told the committee, “I make that recommendation because in these troubled times it is the institutionally responsible thing to do.”

Nordenberg also noted that the Board of Trustees in July passed a budget that included a salary pool increase and that “all other employees already have received salary increase decisions based on that pool.”

Pitt employees’ salary pool increase for fiscal year 2009 was set at 4 percent including 2.5 percent for salary maintenance for employees whose performance was rated at least satisfactory.

In response to Wednesday’s action, Staff Association Council President Rich Colwell stated, “The Staff Association Council applauds the Board of Trustees’ support of Chancellor Nordenberg’s recommendation to maintain salaries for senior administrative officers at their current level. The University community will without doubt face tough economic times in the near future.

“Chancellor Nordenberg’s recommendation further solidifies his reputation as a strong leader who is dedicated to playing a major role in the continued transformation of Pitt into a world-renowned institution. This decision demonstrates their commitment to the students, faculty and staff of the University of Pittsburgh. The Staff Association Council is humbled by their actions and grateful to have such a talented and committed core leadership group.”

University Senate President John Baker labeled the administrators’ decision both generous and prudent. “It is generous because the pay pool was increased 4 percent for FY09, and they deserved to get a pay raise like everyone else at Pitt who performed their job well in FY08. It is prudent because we look to our leaders in difficult times, and next year will likely be a difficult time for Pitt.

“The nation is experiencing a severe economic downturn, and it will undoubtedly negatively impact next year’s operating budget. The state is unlikely to help, so all of us will be affected. Under these conditions, it is appropriate for University officers to sacrifice too.

“It is to their credit that our senior administrators decided to sacrifice their pay raises a year before the FY10 budget impacts all of us. I praise them for their decision and generosity in putting Pitt first.”

Nordenberg’s action mirrors that of leaders at some other universities who have turned down bonuses or pay raises in light of the difficult economic times and stretched university budgets.

A Nov. 21, 2008, story in the Chronicle of Higher Education reported that the University of Connecticut’s president in September turned down what stood to be a $100,000 bonus and that leaders at some other schools, including Rutgers, the University of Louisville, Rowan University and Brevard Community College, recently have either waived bonuses or raises or returned them as donations to their institutions.

Kimberly Barlow & Peter Hart

Filed under: Feature,Volume 41 Issue 8

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