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Updated: Incentive Plan for Presidents Advances at UT System

On Wednesday, a committee of the University of Texas System Board of Regents approved a new incentive plan that could drastically alter compensation for the presidents of its 15 institutions.

UT System Chancellor Dr. Francisco Cigarroa kisses an audience member after his speech to the UT Board of Regents on May 12, 2011.

Updated: The plan was ultimately approved by the full board.

Original story: The decision could lend credence to the notion that, for better or worse, the governing boards of public university systems in Texas are beginning to more closely resemble those of private corporations.

"Not surprisingly, while these plans are more pervasive in industry … in higher education, they are still much more the exception than the rule," said Scott Kelley, the system's executive vice chancellor for business affairs.

Kelley and UT System Chancellor Francisco Cigarroa indicated their intention to keep executives' base pay flat for the next year. Their raises would come from the new incentives. In the first year of the plan, incentive pay is expected to account for about 10 percent of compensation, though if all goals are fully met, it could be as much as 15 percent. Moving forward, Kelley said, the system intends to make increases to base pay very small — at or below inflation — and make the incentives a larger percentage of presidents' overall compensation.

The metrics that presidents will be judged on have yet to be determined, but Kelley said that they would be tailored to each institution and each leader would have between two and four goals. The final determination of those goals will be made by Cigarroa over the next two months. 

Regent James Dannenbaum asked if a similar compensation scheme would be extended to provosts and other officials who help presidents meet their goals. Cigarroa said that the proposal to focus on presidents and system executives was a good starting place.

"I’m excited about this," said Regent Paul Foster, adding that it "goes a long way" toward accomplishing the goals of Cigarroa's framework for advancing excellence in the system. The regents unanimously approved the framework — which calls for the system to "enhance compensation strategies for faculty and administrators to reward and incentivize performance" — last year after months of statewide debate over reforming higher education.

The Texas Coalition for Excellence in Higher Education formed during those turbulent months. The group praised Cigarroa's framework, but indicated that it would be carefully watching the board.

"The Coalition strongly supports efforts to strengthen our institutions, while preserving and promoting excellence," spokeswoman Jenifer Sarver said in an official statement. "However, great care should always be exercised when making significant changes, and we look forward to a more thorough understanding of the mechanics, motivations, and likely effects of the proposed incentive plans."

The full board of regents is expected to approve the committee's report on Thursday.

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