At their meeting at UC San Francisco, Mission Bay, the UC Board of Regents approved $3.1 million in incentive pay for senior UC medical administrators.
The sums will be paid to 38 medical executives under the Clinical Enterprise Management Recognition Plan, which rewards additional income based on reaching or surpassing employment goals.
The payments will range from $30,120 to $218,728 and vary from 14.2 to 29.6 percent of the participant’s base pay. It will come from medical center profits rather than from state revenue.
Seven executives at UC Davis will receive payments under the plan, including Ann Madden Rice, CEO of UC Davis Medical Center. Rice will obtain $167,985 in addition to her $584,300 base salary.
Panelists who spoke to the regents at the meeting said the incentive model maintained quality by having and retaining employees who compete for some of their earnings.
“They will not turn an average performer into a high performer,” said Lee Domancio, CEO of the Marin Healthcare District. “What they will do is motivate high achievers and help retain high achievers who actually like having part of their compensation at risk.”
Over 22,000 union employees and professional or supervisory staff were also paid out, totaling $33.7 million UC medical center revenue for 2008-2009 totaled $5.6 billion.
The decision was approved by all the regents except for Regent Charlene Zettell, who abstained from voting.
“I don’t feel comfortable supporting this but won’t vote no,” Zettell said in the meeting.
At a time when the system faces a $1 billion shortfall, the decision drew fire from critics who said it was inappropriately timed and excessive.
“Their timing was terrible,” said Kevin Scott, a staff research associate for the University Professional and Technical Employees. “If they hire somebody for $400,000 a year, that person shouldn’t require another $100,000 in bonuses just to do their job.”
Scott opposes incentives for medical executives while, at the same time, workers are receiving furloughs.
“They’re asking people to share the pain, but they’re certainly not sharing the pain themselves,” Scott said. “If incentives are good, this is an exaggeration that is way out of bounds.”
He refers to the furlough the UC implemented on Sept. 1, which reduced employee income as a means to cope with declining state funding. Under the plan, those earning more than $240,000 received a reduction of 10 percent. Workers with an income less than $40,000 had their salaries cut by 4 percent.
However, university officials said the 38 medical administrators are also subject to pay cuts and furloughs. Medical employees rather than campus employees are exempt from these reductions.
“The UC Medical Centers’ rank and file employees were free of furloughs and pay cuts because they are under an alternate compensation structure that uses clinical revenues, and not state funds, to pay workers,” said Mitchel Benson, a spokesperson for UC Davis in an e-mail interview.
At the meeting the regents also approved two construction projects, including a $320 million upgrade to UC Berkeley’s Memorial Stadium and the building of a $198 million neuroscience center at UCSF. No state funds will be used for either project.
Instead, the university will use profits earned from ticket sales to fund the seismic retrofit to the stadium. UCSF will raise money to pay for the neuroscience center.
LESLIE TSAN can be reached at firstname.lastname@example.org.