24 January 2022
At the UCF Board of Trustees meeting on November 18, 2021, the BOT unanimously approved a $197,000 bonus for President Alexander Cartwright. Many faculty expressed shock, and the United Faculty of Florida held a press conference in protest, given that faculty received just a 2.5% raise offer in a year with 7% inflation. How could the BOT deliver a bonus that’s twice what many faculty are paid, while faculty salaries become ever more compressed? Is this responsible fiscal management? How is it even fair?
When we hear “bonus,” most of us envision a surprise corporate payout to executives after a high-profit year. This is very different from what happens every year to the leaders of large non-profit organizations. In fact, this year’s payment could in equal fairness be called a $103,000 pay reduction, as opposed to a $197,000 bonus. To understand why, we need to delve into how boards of trustees manage executives.
As is almost universally the case in academia and business alike, President Cartwright reports to the BOT, but the BOT, unlike a traditional boss, is not in his daily work. Composed of 11 community leaders, a student, and a faculty member (me), the BOT provides big-picture guidance. Chair Alex Martins, himself a CEO, consults with President Cartwright about weekly. This arrangement prevents 13 BOT members second-guessing the president’s every decision while making sure he is executing UCF’s mission and responding to the needs of the community and state we serve. This level of executive independence is appropriate. After all, only one BOT member (again, me) has any professional experience in education and, unlike on most corporate boards, no UCF BOT member has ever led a university or college. That’s why we hire a president and delegate nearly all of our authority to him.
With this modest level of direct control, what prevents the president from doing as he will or not doing much at all? How does the Board ensure the university moves in the right direction? Of course, if the president were ineffective or did something damaging, we would hire a different president. However, we need a finer lever to pull than the termination axe.
The standard practice is to use an incentive-pay model. Under our plan 1/3 of the president’s potential salary depends on his meeting specific goals for the year that are set by the Board. His compensation consists of base pay and this incentive payout. Legally, incentive pay comes in the form of a bonus over base pay, as cutting someone’s base pay has undesired consequences under the state’s compensation and benefits system.
Usually, the president’s goals would come from our strategic plan. Since we are in the planning process now, this year’s goals include developing that plan and action on a few of the obvious long-range goals. I’m proud to have gotten unanimous BOT agreement to include “reduced student-to-faculty ratio” in the goals for the first time in UCF history. If the ratio increases or stays the same, the president will lose some pay.
In the BOT meeting materials for June 17, 2020, you can read the Presidential 2020-2021 Goals, the policy and timeline implementing the incentive pay plan, and the rubric forms (scroll to page 50).
In the materials for the November 18, 2021, meeting, you can read the $197,000 incentive pay recommendation for 2020-2021 (page 20; it was approved unanimously) and the Presidential 2021-2022 Goals (page 90). The reduction in student-to-faculty ratio is in point 2. After feedback from a committee meeting open to all trustees, this version was approved unanimously.
In the past, several UCF Vice Presidents also had incentive pay plans, but this was discontinued.
Under the current plan, after the fiscal year, each BOT member consults with the Chief Human Resources Officer, who – for this task only – reports results directly to the BOT chair. We independently evaluate the goals on a rubric that ties them to a share of the incentive pay. This past year, I’m told there was strong agreement among trustees on this evaluation. President Cartwright earned just under 2/3 of his potential incentive pay, or $197,000 of a possible $300,000. This amount was paid in the form of a bonus, but you can see how one can view it as the BOT withholding $103,000 of his potential pay.
Why didn’t he earn the full payout? The goals are quite ambitious and nailing every one in the first year of his presidency, which was also the first pandemic year, would have been remarkable. Hiring his executive team took some time, and one of the second-round hires was our new Vice President for Diversity, Equity, and Inclusion. Her arrival after the end of the 2020-2021 fiscal year pushed diversity initiatives into this year, for example, which were some of the missed goals.
Still, $197,000 is much more than most faculty make, and it’s just under 2/9 of his potential pay. Why does the President earn a potential $900,000, nearly 10 times what most professors make? We like to think of salaries as being related to work effort, but this is only true in the sense that if we individually cut back to 80% effort, we’d get 80% pay and benefits.
He’s paid that much because that’s the market for competent executives. Even at that rate, when UCF searched for a new President in early 2020, a number of qualified candidates applied, but just two stayed in the pool through the interview process. Nose-bleeding executive salaries are a thing in academia, as elsewhere, and we have to compete in that market when hiring a president. UCF’s CEO earns comparably to other State University System presidents, and less than presidents in some other states. He can look at football coach salaries for a reality check (our coach is not paid from state funds).
–jh–
Prof. Joseph Harrington
Chair, UCF Faculty Senate
Member, UCF Board of Trustees