From: Faculty Welfare Committee

To: Academic Senate

Date: April 1, 2016

Re: Annual Report on Faculty Salaries

The 2015-16 edition of the Faculty Handbook (FH) Sec. 2.15.1.7 mandates that the “Faculty Welfare Committee shall provide to the College community a comparison of the current Saint Mary’s faculty salaries with the salary goals listed above”.

This is the fourth year of reporting, as required in the section for Salary Administration for the Faculty Salary Policy (FH Sec. 2.15.1) adopted by the Board of Trustees, January 18-19, 2012. This policy specifies a reference group of 48 institutions (FH Sec. 2.15.1.2, n.1), whose salary data from the subscription only database prepared by the College and University Professional Association for Human Resources (CUPA-HR), will be used (Attachment A). Please note:

1. The FWC is not permitted direct access to the CUPA-HR data, and therefore relies on statistical summaries prepared by the Office of the Provost. 2. The reporting process does not eliminate the one-year lag in the influence of comparable data on salary pool and scale decisions called for by the College’s budget methodology. 3. Three years ago, the Deans reviewed the categories to be inspected in the CUPA data for equivalency with SMC positions. It is assumed that the relative agreement in the positions is still consistent. However, not all 48 reference institutions submitted data to CUPA again last year.

The policy mandates further (FH Sec. 2.15.1. Salary Administration 5) that “Every three years (beginning in 2011-2012), a Task Force will review the policy implementation to insure fair and consistent implementation according to the above goals and procedures based on trends in actual vs. goal salaries over time, rather than on annual achievement of a specific salary level. This Task Force was formed and presented its report to the Academic Senate on May 21, 2015. (Attachment B)

Salary Goal No.1. The College should initially align the mid-point of base (or “on- scale”) faculty salaries with the average of median salaries by disciplines (sans “hard-to-hire” disciplines) among our market peers (defined below) adjusted for a

1 Bay Area/Moraga differential. We recognize that this goal may constrain our ability to compete for top candidates in our applicant pools.

Salary Goal No. 1 is not likely to be met during the remaining life of the current policy.

Although the SMC Pay Scale Medians exceed the Peer Group Medians of reported salary paid for all “not hard to fill” faculty ranks, the SMC Pay Scale has not achieved the geographic salary differential of 15% over the average salary of the peer group, as called for in Salary Administration policy 2.2. There was improvement from last year for Assistant Professors (108.2% vs. 107.3%), for Associate Professors (110.4% vs. 110.3%), and Full Professors (106.4% vs. 104.4%). The gain for Full Professor was due primarily to the implementation of a new and final Step 10 in that scale. The apparent gains in the median SMC professorial rank against the median of comparators has been driven by a “climbing median,” following the addition of steps to the scale. With this year, the median stops “climbing.” Meanwhile, the scale increases proposed by the President and cabinet, and endorsed by the Board, between AY 2012 – 13 and AY 2015 – 16, have not been sufficient to raise SMC medians against the median of comparators; continuation of (typical) 2% increases to the faculty salary pool is unlikely to raise SMC scale medians against the median of comparators.

The Table below summarizes the change in faculty salary scale medians for full-time ranked faculty under the new salary policy.

AY 2012-13 AY 2013-14 AY 2014-15 AY 2015-16 4YR Change % Asst. Prof. $64,206 $65,490 $67,127 $68,805 7.16 Assoc. Prof. $79,316 $80,902 $82,925 $84,998 7.16 Full Prof. $99,466 $102,470 $106,072 $109,811 10.40

Salary Goal No.2. The College will preserve a step system with six steps at the rank of Assistant Professor, six steps and the rank of Associate Professor, and will expand from the existing seven steps of Full Professor to 10.

Salary Goal No. 2 was completed in the AY 2015-2016 Budget.

A Full Professor Step 10 was funded in the AY 2015-2016 Budget. However the Full Professor Median did not substantially close the gap with the geographic differential target of Salary Goal No. 1.

Salary Goal No.3. The College should aim for internal fairness with a salary structure that is equitable across ranks and which has a range of salaries, from assistant through full professor.

2 Salary Goal No. 3 still guides decision making for base faculty salaries across all ranks.

Current discussions around ranked faculty workload and collective bargaining with contingent faculty should be guided by the principle of internal fairness. Once an agreement has been signed with SEIU, the FWC should report to the Senate whether there are any adverse impacts on ranked faculty that would require this goal to be revisited quickly.

Salary Goal No.4. To maintain internal fairness, off-scale differentials should be limited to a list of positions or “salary lines” designated “hard to fill” and that is developed by the Provost, in consultation with the Deans, and reported annually to the Senate.

Salary Goal No.4 to limit off-scale salary differentials to a list of “hard to fill” positions reported by the Provost has been implemented.

The FWC is given a summary by the CFO for positions identified as “hard to fill” that provides the number of faculty in these positions and the financial impact on the faculty salary pool. In the first year (AY 2012-2013) reporting of the “hard to fill” salary policy, there were 18 faculty members receiving $484,972 representing 2% of the full time salary pool. These faculty members were hired into SEBA to meet the standards for AACSB accreditation.

In AY 2015-2016 there are 25 faculty members receiving an aggregate of $718,872 in off-scale salary compensation. This compares with 23 faculty members receiving a total of $653,658 last year. The year-to-year increase in supplement cost is 9.9%. Almost all, (24 of 25), of the salary supplements have been absorbed as a direct cost in Graduate Business. The small remainder is covered in the full time faculty salary pool approved in the budget.

The table below provides a summary of the number of faculty members in the “hard to fill” category and the annual cost of the supplements paid to them since this policy was established. There has been a net increase of 7 faculty, new hires less departures, and a 58% increase in annual cost since this Board approved policy was adopted

AY 2012-13 2013-14 2014-15 2015-16 4YR Change Count 18 21 23 25 7 Cost $454,972 $562,373 $653,658 $718,872 $263,900

The next table provides a summary of the average and median supplements paid to the “hard to fill” category. The Mean is derived by dividing the total cost of the supplements paid by the number of faculty covered by the policy. The Median is the

3 description of the supplement cost that puts half of the faculty above it and half of the faculty below it. The FWC was not given either the standard deviation in the salaries nor the ranges but infers that the supplements are approximating a “normal distribution” because of the closeness of the Mean and the Median reported to us.

AY 2012-13 2013-14 2014-15 2015-16 4YR Change (%) Mean $25,276 $26,780 $28,420 $28,755 13.76 Median $26,355 $28,936 $28,865 $28,865 9.52

Dean Li continues to report a very competitive market for SEBA faculty, especially in Accounting. The FWC recommends again that a review of the “hard to fill” categories be made to determine whether changes are required to implement effective searches in AY 2016-2017.

The FWC is aware that a second “hard to fill” position outside of SEBA was approved for AY 2016 – 2017. We assume that the supplement will be paid from the full-time faculty salary pool because no public announcement has been made that this position is supported either by new endowment funds or by new grant revenues.

Salary Goal No.5. Because off-scale enhancements to salary lines should be funded additionally to, and apart from, the yearly operating budget’s faculty salary pool, additional endowment or other appropriate resources generated for the support of salary enhancement will be given priority by the Board of Trustees for the strategic purposes severed by off-scale compensation; the College will therefore seek and find additional endowment and other resources to cove the cost of off-scale salary differentials.

Salary Goal No. 5 continues to be ignored.

On March 1, 2016 CFO Michell provided revised data to the FWC that “funding sources” generated by the Graduate Business Programs had covered almost all of the supplemental pay. Because none of these sources are reported as restricted funds or endowment based, they must be either current gifts or current tuition revenues. Thus, it is very clear from his report that progress has not been made re: “additional endowment or other appropriate resources generated for the support of salary enhancements will be given priority by the Board of Trustees for the strategic purposes served by off-scale compensation; the College will therefore seek and find additional endowment and other resources to cover the cost of off-scale salary differentials.” (FH 2.15.1. 5 Salary Goals). The FWC is disappointed that the recently Board approved Strategic Plan for the College does not reflect this commitment; equally disappointing, the need for new funding sources to support “hard to fill” hiring is not evident among the priorities identified for the revised capital campaign.

4 Report of the Faculty Salary Task Force

The current Faculty Salary Policy mandates a review every three years (FH 2.15. 1 Salary Administration 5). Steve Cortright, Senate Liaison to the FWC, chaired the Task Force. The group met twice during AY 2014-2015 and issued its findings May 21, 2015 (Attachment B). The Task Force found “steady, incremental progress” toward attainment of Salary Policy Goal 1 that is “partly a function of the implementation of Salary Policy Goal 2 to add additional steps to the salary scale for Full Professors up to Step 10. This influence will cease with AY 2015-16 when Goal 2 is completed.” The Task Force agreed that a “spot check” of geographic cost-of labor differential used in the salary policy was “within the range originally determined … from Economic Research Institute data” but suggested that economic volatility in the Bay Area prompts more frequent review of the data, as called for by Salary Administration 2.2. Finally, the Task Force found “that Goal 5. remains, to date unimplemented” and “The practice of funding salary supplements from Graduate Business revenues appears to be at variance” with the language of Goal 5 that the College find additional endowment and other resources to cover the cost of off-scale salary differentials. However, the practice is pragmatic since faculty have to be paid, and it conforms to accounting guidance in Goal 5 that “off-scale enhancements to salary lines should be funded additionally to, and apart from, the yearly operating budget’s faculty salary pool.”

At the December 9, 2015 meeting, by a vote of 8-0-0, the Academic Senate approved a Sense of the Senate Resolution (S-15/16-17) endorsing the recommendation of the FWC that the FH mandated 6th year review of the Faculty Salary Policy be accelerated based on the findings of the Faculty Salary Task Force. The President responded by email to Chair Ahmed on March 3, 2016 that the Chair of the Board of Trustees “does not support accelerating the schedule”. This response was presented to the faculty at the March 16, 2016 meeting of the Academic Senate and the FWC was asked to review it and prepare any necessary response to it. At the same meeting, Provost Dobkin, co-chair for the search to replace CFO Michell (who will retire at the end of this academic year), said she would ask the new CFO to put top priority on a study of faculty compensation.

The FWC agrees with the Provost that attention to faculty salary policy is strongly advised, whether or not the FH mandated review is formally accelerated. Difficulties with the present Board policy do not end with its uneven implementation. The policy also exhibits structural flaws. For example, the vital CUPA database continues to shrink: the original complement of 48 comparators has fallen to 37 reporting institutions (for the most recent report); eo ipso, the data we are comparing are not those prescribed by the policy.

5 Acknowledgements and Final Thoughts

The FWC thanks Robert Henderson who organized the report for the Office of Provost. We appreciate his efforts to provide the CUPA-HR data by March 31 date that we requested in our report last year. We did not conduct a thorough audit of his summary because by current administrative protocols we are not allowed access to the CUPA-HR data.

The FWC would also like to thank CFO Pete Michell for preparing his report by the January 31 date that we requested in our report last year. His report had to be modified because of the change in contract responsibility of a hard to fill faculty member that came to light after this date. We note that the FH was not edited to formally establish this process and repeat our request that this due date be added to FH Sec. 2.15.1(Salary Administration) 3.6. Finally, we want to express our appreciation for his spirit of collaboration with the faculty and wish him a pleasure filled pursuit of his bucket list in his well-earned retirement.

Respectfully Submitted,

Theodore Tsukahara Chair, AY 2015 -2016

Brenda Hillman Rebecca Proehl Caitlin Powell FWC Members

Steven Cortright FWC Senate Liaison

Attachment A: Report from Provost prepared by Robert Henderson Attachment B: Faculty Salary Task Force Third Year Report