The University of Toledo paid out almost $570,000 in administrative bonuses last school year while reducing the campus work force by 300 employees to address a budget deficit.
The bonuses were part of $1.5 million handed out to administrators over the last four years in longevity or performance pay, a review by The Blade shows.
About $456,000 in bonuses were paid in 2008, $111,000 in 2007, and $417,000 in 2006.
The 2006 numbers include two $175,000 bonuses to former UT President Dan Johnson, including one longevity payment and one “merger bonus.”
The bonus pay has become an issue on the UT campus as employees learn of the large sum payments while cuts are made to address budget deficits.
In addition to the layoffs in the spring, UT is asking all employees to take one or two unpaid furlough days.
“The responses of faculty have been tremendous in terms of grasping the disparity between what the administrators are paid through contract and, of course, what faculty are paid through contract,” said Marilyn Widman, who is legal counsel for the faculty union, the UT American Association of University Professors.
It's interesting, she said, that the administration is saying it's contractually obligated to pay the administrative bonuses when the union's bargaining agreement also is a contract, but it's apparently OK to alter that to implement furloughs.
UT President Lloyd Jacobs, who appears on the bonus list in 2008 for the payment of the first of three $150,000 longevity bonuses in his contract, said the bonuses are part of the compensation policy at the institution.
Rather than including those payments in the annual salary, they are in the form of “bonuses” to retain talent, he said.
“That creates stability,” Dr. Jacobs said.
“If I have a longevity bonus in my contract, that tends to keep me there.
“It gives you incentive to stay and builds continuity.”
The bonuses are taken into account for the total compensation of the individual, which Dr. Jacobs said is determined at market value adjusted for performance.
The bonus system also puts the pressure on the administrator because he or she has to do a good job so as not to be let go before getting that longevity bonus, or he or she needs to accomplish goals to receive the performance bonus, Dr. Jacobs said.
“The person receiving them takes all the risk,” he said.
If his $450,000 in bonuses was paid out over the seven years specified for the longevity, it would add about $64,000 a year to Dr. Jacobs' base salary of $392,700.
A review of administrative contracts shows that top administrators receive large longevity bonuses every several years, while deans get smaller annual longevity bonuses.
Dr. Jeffrey Gold, UT's provost and vice president for health affairs and medical college dean, has a $150,000 longevity bonus in his contract that was paid in 2009 after four years. He had a $50,000 bonus after two years.
His 2009 UT salary was $362,000.
UT Provost Rosemary Haggett got a $50,000 bonus last year as her two-year longevity payment. Her salary is $236,000.
Both Dr. Gold and Ms. Haggett also received in 2009 merit bonuses.
Dr. Gold got $54,369, about 15 percent of his base salary, and Ms. Haggett received a 10 percent bonus of $23,638.
Some of the contracts are very specific as far as bonus pay, including that of UT Athletic Director Mike O'Brien.
His contract has four criteria — academic success of students, compliance with NCAA and MAC rules, good fiscal management, and achieving yearly goals — and he can get bonuses of up to 5 percent of his pay for accomplishing each, for a possible total bonus of 20 percent.
The review showed Mr. O'Brien achieved some of them with a 2009 bonus of $26,427. His salary is about $184,000.
As an example of a dean's longevity bonus, Tom Gutteridge, dean of UT's business college, received a $29,000 bonus last year. His annual bonus increases $1,000 every year.
That's similar to the contract of John Gaboury, dean of university libraries, whose longevity bonus schedule goes up $500 every year. He received $9,000 in 2009.
Such longevity bonuses are not included in the faculty contract, but there are provisions for extra compensation tied to research grants or an extra workload.
But that extra pay may be a couple hundred dollars rather than thousands or hundreds of thousands, Ms. Widman said, adding that all tenure-track faculty members shared merit pay from a total pool of $225,000 last year.
The AAUP routinely pays attention to administrative contracts and pay, but has mostly used that information at the bargaining table, Ms. Widman said.
It's different now because the university claims to be in financial crisis, asking for layoffs and furloughs while spending money on administrators.
The goal is for faculty and administrators to work together to sort out UT's finances in a way that doesn't require layoffs or furlough days, she said.
“A day unpaid for most of the individuals on campus is certainly going to have a serious impact and should not be taken lightly,” Ms. Widman said.
The finance committee of the UT Board of Trustees approved last week a mandatory furlough policy as a way to offset about $1.3 million of an $8 million deficit caused by reductions in state funding.
The furloughs need to be discussed with the unions, but the plan is to shut down UT from Dec. 28-31 and require employees to use the furlough days Dec. 28 and/or Dec. 29.
The university also has proposed additional layoffs, program cuts, and a tuition increase in the spring to address its budget situation.
The cuts are on top of the spring work-force reduction of 300 positions — about two-thirds were eliminating vacant positions and one-third were employee layoffs.
Dr. Jacobs said having to implement layoffs fills him with anguish, but they are necessary to move the university forward.
“We cannot turn aside from our pursuit of excellence,” he said.
Contact Meghan Gilbert at:firstname.lastname@example.org 419-724-6134.