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Item: III Tuesday, September 16, 2008

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Item: III Tuesday, September 16, 2008 Item: III Tuesday, September 16, 2008 SUBJECT: Approval of Revised Employment Agreement for President Brogan PROPOSED BOARD ACTION Approve an extension of and revisions to the employment agreement with Frank T. Brogan for the position of University President. BACKGROUND INFORMATION Effective March 4, 2003, the University retained Frank T. Brogan to become the University’s President and Chief Executive Officer through March 4, 2009. During his tenure, President Brogan’s leadership has resulted in numerous accomplishments for the University, among them: (i) maximizing the public’s investment in education through collaborations with private organizations such as The Scripps Research Institute, the Torrey Pines Institute for Molecular Studies, the Boca Raton Community Hospital, the University of Miami Miller School of Medicine, the Smithsonian Marine Station, and the Max Planck Florida Corporation; (ii) acquiring the Harbor Branch Oceanographic Institute; and (iii) elevating the University’s academic standards and public stature. In addition, President Brogan has been an active member and participant in community and professional development activities, including serving as Chair of the Governor’s Blueprint Commission on Juvenile Justice Reform, President of the Sun Belt Conference, and a member of the Board of Directors of the NCAA. Based on the numerous accomplishments of the University under President Brogan’s leadership, as well as his professionalism, vision, and inspiration, the Board’s annual evaluations of President Brogan have been uniformly outstanding. At its November 2007 meeting, the Board concluded its most recent annual evaluation with a resolution authorizing the Chair to retain a consultant to assist in preparing an extension for President Brogan’s contract before its expiration. Pursuant to this authorization, the Chair retained Dr. James L. Fisher to perform a compensation study of other university presidents, and to advise in preparing a new contract. Dr. Fisher’s materials are attached. Based upon this information as well as the extraordinary performance of President Brogan, it is the recommendation of the Chair that it is in the University’s best interests to secure the continued services of President Brogan through an extension and revision of his current Employment Agreement. The term of this Revised Employment Agreement would commence on March 5, 2009 and continue for a period of six (6) years, though March 4, 2015. Under this Revised Employment Agreement, President Brogan would continue as President and Chief Executive Officer of the University. The proposed revised agreement sets forth his rights and responsibilities as prescribed by law, by custom and practice of a university president, and by the specific expectations of this Board. IMPLEMENTATION PLAN/DATE The terms and conditions of the Revised Employment Agreement would take effect on March 5, 2009. FISCAL IMPLICATIONS Effective March 5, 2009, President Brogan will be paid an annual base salary of three hundred fifty‐seven thousand dollars ($357,000.00), plus standard employment benefits. This represents an increase in his current annual salary of thirty‐two thousand sixty‐two dollars and twenty‐ four cents ($32,062.24), or slightly less than ten percent (10%). Pursuant to state law, the University will pay two hundred twenty‐five thousand dollars ($225,000) of this amount, and will request that the Florida Atlantic University Foundation pay the remainder. His salary will be reviewed annually by the Board in conjunction with the Board’s annual evaluation of job performance. President Brogan shall also be eligible for any legislative salary increases applicable to University employees in his employment classification and for annual bonuses, at the Board’s sole discretion, for the achievement of annual goals and objectives to be agreed upon by the Board. The Board also agrees to use best efforts to cause the FAU Foundation to: (i) provide President Brogan with supplemental compensation equal to twelve percent (12%) of his annual base salary during each year of his contract, to be applied towards the annual premium for a permanent life insurance policy; (ii) provide President Brogan with a basic long term disability policy; and (iii) contribute the portions of all payments to President Brogan provided for in the contract that exceed applicable statutory limitations. Supporting Documentation: Presidential Compensation Report by Dr. James L. Fisher Proposed Revised Employment Agreement Presented by: Nancy Blosser, Chair, FAU Board of Trustees James L. Fisher, Ltd. 3254 Meadow Run Drive Venice, Florida 34293 941-493-0269 September 1, 2008 Nancy Blosser Chair of the Board Florida Atlantic University 777 Glades Road Boca Raton, FL 33431-0991 Dear Ms. Blosser: What follows is a compensation study related to a contract for President Frank Brogan. It includes presidential compensation in out-of-state universities comparable to Florida Atlantic and public institutions in Florida. The enclosed material considers President Brogan’s salary and benefits and makes recommendations consistent with national and regional conditions. GENERAL: Let me first offer a proviso about compensation information about presidents gathered from national studies for comparative purposes. Through the years, many studies have been conducted regarding presidential compensation in higher education often by private firms (Hay Associates, et al) or by search firms (Korn/Ferry, et al). These studies are typically limited and include a relatively small percentage of the more than 4270 colleges and universities in the country. Yes, increasingly, these companies use public tax records but even that information is often incomplete. The most quoted (and most complete) study is conducted by the College and University Professional Association for Human Resources (CUPA-HR). Yet, this, the best of studies, includes only 31% of the institutions in the country. For instance, in the most recent study (February 2008), only 1307 institutions participated and as noted on Appendix II CUPA will not release any actual salary information to anyone; rather, they release only averages. One may assume, I think, that the reported salaries are relatively low. Parenthetically, over the years, I have been a trustee at ten colleges and universities, none of which generalized from this study. Why don’t more institutions participate? Many feel that such personal information is not the appropriate business of outsiders; they lack the commitment for such studies; or they simply do not want to take the time to fill out the forms. Finally, regarding national studies, The Chronicle of Higher Education (which uses CUPA-HR available data) is often cited. It is inclusive but can also be misleading for the same reasons noted above. The most reliable source then is having the actual contracts of sitting college/university presidents, and they are difficult to come by; certainly, this is the case in Florida. RATIONALE: A review of the national compensation reports yields: (1) The Chronicle (data obtained from CUPA-HR) (Appendix I) indicated that the median presidential salary for doctoral granting institutions with which Florida Atlantic should be compared, in 2007-08, was $365,190. (2) At 13 peer doctoral granting institutions (Appendix II) the mean presidential salary in 2006-07 was $345,915; the maximum $431,689. (3) The mean salary of Florida public university presidents (SUS) is $352,838 for fiscal year 2008 (Appendix III). Among Florida public universities, President Brogan’s salary is $324,938 ranking him 7th. (4) Appendix IV includes compensation and benefits for Florida public university presidents. OTHER BENEFITS: In addition to base pay, there are numerous additional forms of compensation provided to university presidents, the most common of which are academic rank, sabbatical leave, housing or housing allowance and maintenance, domestic services, car or transportation allowance, travel and deferred compensation. An increasing number of institutions today also provide rolling contracts, club dues, spousal or significant other considerations, physical examinations, financial planning, moving expenses, additional retirement and insurance benefits, bonus considerations, and most importantly, retention and retirement incentives. I stand ready to assist you further. Sincerely, James L. Fisher 2 APPENDIX II 2006-2007 PRESIDENTIAL SALARIES FOR PEER INSTITUTIONS Retirement/Deferred Auto/ Institution Enrollment* Salary** Compensation/other** Housing** University of Toledo 19,374 $385,000 $53,900 Provided by state University of Memphis 20,562 $258,998 $31,645 Provided by state Old Dominion University 21,303 $312,156 $98,452 Provided by state University of Louisville 21,841 $431,689 $129,922 Auto by state; Housing private sources Portland State University 21,902 $340,008 $37,269 Provided by state University of Akron, Main Campus 23,539 $325,077 $109,561 Provided by state University of Texas - Arlington 24,825 $370,000 $14,625 ---- Georgia State University 26,134 $340,611 $320,328 $40,585 University of Nevada – Las Vegas 27,912 $400,000 $23,362 $26,000 University of Wisconsin-Milwaukee 28,356 $288,965 $30,931 $20,472 Indiana Univ-Purdue Univ – Indianapolis 29,764 $294,200 $22,000 Provided by state George Mason University 29,889 $385,000 $257,500 Auto private sources Housing by state Virginia Commonwealth Univ 30,381 $365,190 $172,432 Private sources *From the 2008 Higher Education Directory **2006-07 Compensation from The
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