Proposed pay raise for University of Minnesota president draws scrutiny

15December 2021

A proposed pay raise for University of Minnesota President Joan Gabel is reigniting debate over how much college administrators should be compensated and being criticized for coming after employee furloughs, sports program cuts and a tuition hike.

Under the new contract, which comes roughly two and a half years into her tenure, Gabel would make up to $1 million next fiscal year when taking her base salary, supplemental retirement contribution, a performance bonus and other allowances into account. By the final year of the contract, fiscal year 2026, she would earn nearly $1.2 million.

U Board of Regents Chairman Ken Powell, who worked with Gabel and board vice chairman Steve Sviggum on the terms of the contract, wrote in an emailed statement that the pay raise “is well deserved, but also positions President Gabel squarely in the middle of her presidential peers in the Big Ten.”

Powell and Sviggum did not respond to interview requests. Gabel was not made available for an interview. The board will vote on the contract extension Friday.

“In just under three years, [Gabel] has advanced the University’s mission in critically important and strategic ways, and built a clear, measurable road map for continuing this work in the years ahead,” Powell wrote in his statement. “At the same time, she has also provided a steady hand throughout the pandemic — an unpredictable experience for all of us that began mere months into her first year.”

The extension incentivizes Gabel to stay at the U through the end of her contract, Powell argued. It would raise her current base salary of $650,000 to $706,000 next fiscal year, which starts July 1. Her base salary for the final year of her contract would be just over $771,000.

In addition to her base salary, the new contract includes annual supplemental retirement contributions ranging from $155,000 to $280,000, annual performance bonuses of up to $100,000, annual car allowances of $5,000-$10,000, and a reimbursement of up to $15,000 per year for the cost of an executive physical exam.

Gabel’s predecessor, former U President Eric Kaler, earned a base salary of $625,000 in his eighth and final year leading the university.

Nine other Big Ten presidents currently have base salaries of $750,000 or more, however, according to documents provided by the U.

Cherrene Horazuk, president of the AFSCME Local 3800 union that represents U clerical workers, called Gabel’s proposed pay raise “outrageous.” Her union is currently bargaining for better wages for its roughly 1,200 workers, most of whom are paid about $45,000 per year. They were seeking a pay increase of up to 5% in each of the next two years to help keep pace with inflation, Horazuk said, but the U has counter-offered them a raise of just 1.5% — and only for the coming year.

“They told us that they did not want to talk about multi-year contracts because they weren’t confident in what the financial situation would be because of COVID,” Horazuk said. “But they’re clearly willing to talk about that for the president’s salary.”

Many U employees were furloughed and had pay raises delayed during the first year of the pandemic, among many measures the university took to address a steep budget shortfall. Top administrators, including Gabel, took temporary pay cuts, too.

Administrators also made the painful decision last year to eliminate three men’s sports programs — gymnastics, tennis and indoor track — to help address a budget deficit in the athletics department. Cutting the three sports programs was estimated to save the department roughly $2 million annually. A former U gymnast is suing the school to reinstate his team, which had an annual budget of about $750,000.

“It just doesn’t seem to me to be very good timing to be talking about such a significant raise,” said state Sen. Jason Rarick, R-Pine City, vice chairman of the Senate higher education committee. He worries the president’s pay raise could have a “trickle-down effect.”

“A bunch of people within the administration will end up likely getting raises,” Rarick said.

U Regent Darrin Rosha opposes the proposed contract and said he expects the salary increase will make state lawmakers more skeptical of the university’s state funding needs.

The pay bump is “especially troublesome” following the tough financial decisions made during the pandemic, Rosha said, and after the university raised undergraduate and graduate tuition by 1.5% at its five campuses this academic year.

“I don’t know how you credibly tell your students that we simply have to expect more from them when we have the resources for these kinds of expenditures,” said Rosha, who opposes further tuition increases.

Both Rosha and Rarick expressed concern about Gabel’s annual performance bonuses being decided by a select few regents, not the full board.

Gabel’s new contract states her bonus amounts will be determined by the board chair after he consults with the board’s presidential performance review committee, which consists of regents picked by the chair. The bonuses will be based upon specific goals and metrics.

“It sure seems like this decision made by one person is going to have very little transparency for the students and the public and the Legislature,” Rarick said.

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