In a letter to the University of Minnesota Board of Regents, leaders of two faculty organizations on the Duluth campus call the compensation package of the outgoing system president “excessive” and a “golden parachute.”

University of Minnesota President Eric Kaler announced in July his intention to step down from his position in 2019, saying in a statement that his seven years as president exceeds the national average and the university will benefit from a fresh perspective.

“Quite simply, it is time,” he said, noting he intends to work as president emeritus for one year to continue momentum on the university’s $4 billion “Driven” campaign. The fundraising effort is seeking to raise $1 billion for students, $2 billion for faculty and research, and $1 billion for university initiatives and outreach.

“I look forward then to a sabbatical before assuming my faculty position in our spectacular Department of Chemical Engineering and Materials Science,” he said.

In August the Board of Regents approved an amended contract with Kaler that preserves a $625,250 presidential salary for his year as president emeritus and a $325,000 supplemental retirement contribution. During Kaler’s six-month sabbatical and upon his return to a faculty position his compensation will be halved to $312,625 a year.

According to a 2017 story in the Minneapolis/St. Paul Business Journal, Kaler is the fifth-highest paid University of Minnesota employee. Three football coaches and the athletic director are paid more.

Scott Laderman, president of the University Education Association at the university’s Duluth campus, and Rebecca de Souza, chair of UMD’s Faculty Senate, outlined their objections to Kaler’s compensation in a Sept. 12 letter to the Board of Regents, the text of which appears below.

Dear Regents,

As the president of UEA-D, the faculty union at UMD, and the chair of the UMD Faculty Senate, respectively, we are writing to express our disappointment in the compensation package awarded last month to President Kaler. As you know, you granted President Kaler an additional year (2019-2020) of his presidential salary of $625,250 while serving as president emeritus, an additional $550,000 in retirement contributions beyond those he already receives, and then six months (essentially the Fall 2020 semester) of “transitional leave” while collecting a salary of $156,312.50. This will be followed by a faculty appointment with a starting base salary of
$312,625.

Unfortunately, this “golden parachute” for President Kaler may jeopardize the University’s state funding requests while underscoring – and in a very visible way – what has become a disturbing trend in recent years: a growing gulf between richly paid administrators and often poorly paid faculty and staff. To serve as president of the University should be an honor. It should not require an excessively high salary or hundreds of thousands of dollars in additional
benefits. It should be a matter of public service. Indeed, at the University and elsewhere around the country, rising administrator salaries have not been a guarantee of executive excellence.

The generous compensation package you recently awarded to President Kaler comes amid years of unmet UMD faculty requests to address our far-below-market salaries. According to data compiled for the Regents, UMD faculty are paid only 87 percent of their market median. Numerous faculty requests to address this problem have gone unanswered. In fact, what salary increases the faculty and staff have received in recent years have on average been subinflationary, meaning that our actual purchasing power has decreased. At the same time, under the Kaler administration the University has pushed higher out-of-pocket health costs onto employees (a cost shift ostensibly justified by a “Cadillac tax” that never materialized), and the retirement benefits for faculty whose appointments began after January 2, 2012, have gotten worse. We find it especially troubling that President Kaler, whose administration oversaw the reduction in the University’s contribution to faculty retirements, is now the recipient of an additional $550,000 from the University above and beyond his regular retirement earnings.

We worry about this package for President Kaler because of the troubling message it sends. It suggests to faculty and staff, who work everyday to fulfill the University’s core mission, that the University values them far less than its top-paid administrators. And it suggests to Minnesota taxpayers and the state legislature that the University, at a time of rising tuition for many students, is not in fact in need of an increased allocation.

We also worry about President Kaler’s package because it arrives during an era of financial crisis at UMD. Faculty and staff on our campus have been suffering through years of budget cuts. We have pleaded with the University system, after years of chronic underfunding, to begin providing UMD with its fair share. Our requests have consistently gone unmet.

As a result, dozens of faculty and staff have lost their jobs, and that pain will continue in the coming years. Moreover, there have been and will continue to be severe cuts to academic programs. These underdevelopments compromise UMD’s commitment to the retention of students, faculty, and staff. Indeed, they affect UMD’s core mission and, therefore, its students – students from throughout Minnesota who continue to live and work in our state. For the University to be providing what essentially amounts to a massive bonus to President Kaler amidst these ongoing job losses and curricular cuts worries us deeply.

The University is now contractually obligated to provide President Kaler with his excessive compensation. We cannot ask you to rescind it. We do hope, however, that President Kaler, when reminded that he is receiving special perks unavailable to ordinary faculty and staff, will do the honorable thing, as ultimately did Chancellor Lendley Black a few months ago, and decline his extraordinary package. He could, for example, ask that the money be sent to UMD to save a number of jobs or converted into scholarships for University students.

We appreciate that we cannot force this issue. We can, however, ask you, the Regents of our great university, to begin doing right by UMD faculty, staff, and students. Our pay is too low and our campus is underfunded. It is time for each of you, consistent with subdivisions 2(b) and (e) of the Board Operations policy, to demonstrate your loyalty to the entire institution and state rather than to just a single constituency within it. We respectfully request that you take immediate steps to raise UMD faculty salaries to at least their market median and increase the system allocation to UMD to ensure that our campus and students receive their equitable share. These increases should come from a well balanced distribution of the state appropriation between campuses, not through higher tuition rates for our students. They already pay too much.

Sincerely,

Scott Laderman
President, UEA-D

Rebecca de Souza
Chair, UMD Faculty Senate

cc: President Eric Kaler
Chancellor Lendley Black