UC Pays Big Bucks for Fake Compensation Study

The UC has spent a great deal of money on hiring a consulting firm, Mercer, to analyze their compensation, and not only is the study completely flawed and incomplete, but a more effective study could have been done by anyone for free by just using the salary data available on the web. The study (available here) tries to show that the high-paid administrators and star faculty are actually underpaid, while the low-paid unionized workers are above the market rate. Here are the major claims according to the UC:

• On average, cash compensation for UC faculty is 10 percent below market, and total compensation (cash plus benefits) is 4 percent behind comparable institutions.

• Union-represented service workers are closer to the market average than all other categories of employees in the UC system, and their total compensation (cash plus benefits) is 18 percent higher than their counterparts at other institutions.

• The largest compensation gap affects senior management group members (e.g., president, chancellors, deans, vice presidents, chief financial officers) whose cash compensation, on average, was 22 percent lower than their counterparts. Total compensation for top administrators, including university chancellors, was 14 percent below their counterparts at comparable institutions.

• Cash compensation for Managers, senior professionals and professionals and support staff – both union- represented and non-represented – lags behind their counterparts as well. On average, the gap for all of those categories ranges from 13 percent to 19 percent.

• For UC medical centers, results show that cash compensation for most UC medical center employees is near or slightly above market, except for staff physicians whose pay is 18 percent below market.

• In total compensation, all medical center employee groups, except staff physicians, were above market by 4 to 17 percent.


The study comes with a major disclaimer: “The 2009 study followed established industry practices. Consistent with industry practices, cash compensation was defined as base salary, excluding forms of rewards that generally are not a part of ongoing compensation, such as one-time relocation allowances, stipends for assuming additional temporary responsibilities, summer salaries for faculty, one-time bonuses and the like.” The study thus only looks at base pay, while as I have shown, more than 36% of the pay of the 3,600 people making over $200,000 in the UC system comes from non-base pay compensation (and this does not include benefits). The total gross pay of the over $200,000 earners in 2008 was $1 billion and the base pay was $640,000 million (here is the spread sheet:). (I detail, who earned this money, and how it went up 40% from 2006 to 2008 here ). The base pay of the remaining, 147,000 people, half of them unionized, while none of the top are unionized, was $7.3 billion and their gross pay was $7.9 billion (here is the spreadsheet: ).

Another giant flaw in the Mercer study is that their sample is unscientific. They readily admit that they only looked at the salaries of half of the employees (page 9) even though all of the salaries are in the pubic domain. They also excluded whole categories of employees, and as I have shown in my study of senate faculty salaries, due to the incredible imbalance of compensation, with most of the raises going to the people at the top, you cannot simply look at the average salary.

This kind of study and this type of waste of funds is why the workers and the unions and the state do not trust the UC administration. They will pay large sums of money to circulate false information