UNC President gets huge bonus on top of mega-salary

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No wonder college kids need loans for sky-rocketing tuition

Margaret Spellings

By Kari Travis | Carolina Journal News Service

WILMINGTON — On Friday, March 23, the Board of Governors for the 17-campus University of North Carolina system approved a $95,000 bonus for UNC President Margaret Spellings, roughly 12 percent of her $775,000 annual salary.

The money will be released in split amounts, with $50,000 paid directly to Spellings, and the remaining $45,000 deposited into her retirement account.

No one disputes that Spellings has stellar credentials. She served in the George W. Bush administration – first as Domestic Policy Advisor for the President and from 2005 to 2009 as U.S. Secretary of Education. And her current post has plenty of responsibility. The UNC system is the third largest in the country, using its enrollment of 220,000-plus as the criteria.


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However, Bob Rucho, a former state senator and current member of the UNC Board of Governors, says his colleagues on the board should take a serious look at how it awards bonuses and pay raises for university administrators.

Only three board members — Thom Goolsby, Tom Fetzer, and Rucho — opposed the decision to grant Spellings a bonus. Goolsby and Fetzer are also former elected officials, the former a state senator and the latter the mayor of Raleigh. Of the 28 voting members, 24 voted in favor of the large bonus. Marty Kotis, an outspoken board member who frequently opposes spending bumps, was not present for the vote.

In today’s economy, it’s just not fair to pay that large a bonus to a public servant, Rucho said. “It’s unacceptable, and for $775,000, do the job right to begin with.”

Lou Bissette, Board of Governors chairman, had a different opinion.

“Spellings earned every dollar, and then some,” said Bissette. “The board concluded that President Spellings’ performance met or exceeded expectations in these five categories: leadership, governance, strategic plan, legislative advocacy and special projects.”

Some areas of Spellings’ management and communications need improvement, said Rucho, pointing to an incident last year where the president, along with Bissette, excluded some board members from communications with Gov. Roy Cooper over a controversial confederate monument on UNC-Chapel Hill’s campus.

The UNC president’s contract doesn’t include a yearly raise, Bissette said. Bonus incentives compensate for that. The board considered Spellings’ work against percentages attached to each of her five performance categories. For example, implementation of the university’s strategic plan accounted for 30 percent of her bonus.

Spellings is eligible to receive a maximum bonus of $125,000. Her award this year accounted for 76 percent of that amount, a modest sum when compared to her accomplishments, Bissette said.

The president has negotiated the largest-ever budget from the state legislature, rebranded the university, and enacted a more efficient budget for system employees, he said.

“She is a very effective advocate for the university both in the state and nationally. She has so many incredible national connections.”

In 2017, the board paid Spellings a bonus of $90,000. Spellings is two years into her five-year presidential term.

Rep. John Fraley, chairman of the House Committee on Education/Universities, said he is “supportive of all of these things and in agreement with the actions of the Board of Governors.”

“[Spellings] is doing an amazing job throughout the university, throughout all of education in North Carolina,” the Iredell County Republican said.

“You can take a look at the fact that she has been a big driver behind the My Future NC commission, and by virtue of the fact that she drove the initiation of a strategic plan [for UNC]. She has been very realistic in talking about accountability within the university system, and also very responsible in the appropriation requests that UNC is making of the legislature and North Carolina taxpayers.”

However, in a state where the median household income hovers around $50,000, there is no justification for big bonuses, Rucho said. Spellings’ salary is more than 15 times the median household income.

The board plans to look at lowering student fees and tuition, but also should consider reforming administrative pay — and revise Spellings’ contract, Rucho said.

But UNC must offer competitive compensation in the education market, Bissette said. The system competes against schools like Duke University and Wake Forest University, where presidential salaries are north of $1 million.

Rucho concluded the board is rewarding Spellings for merely doing her job.

“How can you justify giving a salary of $775,000, and a bonus almost twice what is median income, and say we’re being good stewards of the money? I should not be paying them a bonus to do a job that I’m paying them to do to begin with. I paid a salary for that.”

“The board concluded that President Spellings’ performance met or exceeded expectations in these five categories: leadership, governance, strategic plan, legislative advocacy and special projects,” he said.

The president’s contract doesn’t include a yearly raise, Bissette said. Bonus incentives compensate for that. The board considered Spellings’ work against percentages attached to each of her five performance categories. For example, implementation of the university’s strategic plan accounted for 30 percent of her bonus.

Spellings is eligible to receive a maximum bonus of $125,000. Her award this year accounted for 76 percent of that amount, a modest sum when compared to her accomplishments, Bissette said.

The president has negotiated the largest-ever budget from the state legislature, rebranded the university, and enacted a more efficient budget for system employees, he said.

“She is a very effective advocate for the university both in the state and nationally. She has so many incredible national connections.”

In 2017, the board paid Spellings a bonus of $90,000. The former U.S. Secretary of Education is two years into her five-year presidential term.

Rep. John Fraley, chairman of the House Committee on Education/Universities, said he is “supportive of all of these things and in agreement with the actions of the Board of Governors.”

“[Spellings] is doing an amazing job throughout the university, throughout all of education in North Carolina,” the Iredell County Republican said.

“You can take a look at the fact that she has been a big driver behind the My Future NC commission, and by virtue of the fact that she drove the initiation of a strategic plan [for UNC]. She has been very realistic in talking about accountability within the university system, and also very responsible in the appropriation requests that UNC is making of the legislature and North Carolina taxpayers.”

My Future NC is a task force of K-12, community college, public university officials, and community leaders, designed to study education and training needs — and make recommendations to the state legislature.

In 2016, the state legislature passed N.C. Promise, a program offering in-state tuition of $500 a semester at three UNC schools. President Spellings was a key player during the implementation process, Fraley said.

However, in a state where the median household income hovers around $50,000, there is no justification for big bonuses, Rucho said. Spellings’ salary is more than 15 times the median household income.

The board plans to look at lowering student fees and tuition, but also should consider reforming administrative pay — and revise Spellings’ contract, Rucho said.

But UNC must offer competitive compensation in the education market, Bissette said. The system plays against schools like Duke University and Wake Forest University, where presidential salaries are north of $1 million.

Rucho concluded the board is rewarding Spellings for merely doing her job.

“How can you justify giving a salary of $775,000, and a bonus almost twice what is median income, and say we’re being good stewards of the money? I should not be paying them a bonus to do a job that I’m paying them to do to begin with. I paid a salary for that.”

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