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Six-figure bonus for UA president raises eyebrows amid budget cuts

Michelle Theriault Boots

Amid budget cuts and campus layoffs, the top executive of Alaska’s public university system has been offered a $320,000 retention bonus.

The University of Alaska Board of Regents in June voted to offer a contract extension to president Pat Gamble that includes the bonus.

Gamble will receive the money, equal to one year of his salary, if he stays at the helm of Alaska’s public universities until 2016.

News of the bonus has stirred ire among some faculty members who say promising the top executive a six-figure bonus at a time of fiscal belt-tightening is tone-deaf and inappropriate.

“I’m shocked, to be honest,” said Abel Bult-Ito, a UAF neurobiology professor. “Three hundred and twenty thousand dollars is a lot of money at a time when the university is seeing huge budget cuts.”

The university counters that Gamble, a retired U.S. Air Force general and former Alaska Railroad executive, is doing an outstanding job of shepherding Alaska’s far-flung and diverse campuses through “times of rapid change in higher education.”

The debate over Gamble’s planned bonus is part of broader controversy over the changing role -- and skyrocketing pay -- of university presidents.

Universities are realizing they need to be run more like businesses, and their leaders are being paid more like corporate executives, said Paul McConnell, an Orlando, Florida, executive compensation consultant who frequently works in higher education.

In May, a Chronicle of Higher Education survey of university president compensation showed nine executives took home more than $1 million for the 2012-2013 school year.

The number of public university presidents earning more than $1 million had more than doubled from the fiscal year before.

Six-figure retention or performance bonuses are increasingly standard for university presidents, said McConnell.

The bonus Gamble was offered is “pretty well within mainstream practice,” McConnell said.

But the word “bonus,” especially when tied to executives already paid exponentially more than the average worker, can be public relations poison. It didn't help that Wall Street executives grabbed huge sums in bonus money after public bailouts saved their companies, McConnell said.

More than 90 percent of workers don’t get bonuses of any kind and see them as “something extra,” McConnell said.

Really, he said, paying bonuses is a sophisticated way of structuring compensation so more of the risk is shouldered by the executive -- in Gamble’s case, he won’t get the bonus unless he stays at the University of Alaska and in good standing with the board of regents until his contract ends.

Gamble’s pay package is modest compared to his peers, said Kate Ripley, a university spokeswoman.

The Board of Regents aims to set executive pay at 10 percent below the national median for peer universities, she said. Gamble’s $320,000 salary is below that.

The bonus would be Gamble’s first in his position, which he has held since 2010.

He is not the first UA president to receive a six-figure bonus.

Former president Mark Hamilton was awarded a $210,000 bonus, Ripley said.

Mark Fitch, a mathematics professor at UAA, questioned whether a retention bonus was a necessary enticement for Gamble.

The president, Fitch said, had already publicly committed to finishing out some of the initiatives he’d spearheaded.

“There was no external evidence that he needed motivation to stay,” he said.

UAF professor Bult-Ito says he doesn’t think Gamble deserves a bonus.

“The most important role is to get funding for the university and he has been unable to get that, ” he said.

The Fairbanks flagship campus is laying off about 40 people to close a $12 million budget gap next year.

The cuts are “like a machete hacking around,” said Bult-Ito.

Other campuses, including Anchorage, plan to address cuts with measures like leaving open positions unfilled.

Ripley, the university spokeswoman, said the Board of Regents “strongly supports his leadership and the work he's doing, specifically with the Shaping Alaska's Future initiative, improved graduation rates, mandatory student advising, better service to students and working more closely and effectively with the state, the K-12 system, and all of Alaska's employers.”

None of the regents were available to comment Monday.

For McConnell, the higher education compensation consultant, there is one constant in the quickly changing landscape of university president pay: “It’s all getting so much more scrutiny than it has in the past,” he said.

Contact Michelle Theriault Boots at mtheriault@adn.com.