Newly selected UC Davis Chancellor Gary May stands to earn $325,780 a year sitting on outside boards, a form of compensation that prompted criticism last year for predecessor Linda P.B. Katehi.
May earned $288,280 in cash and stock in 2015 as a member of the board of Leidos, a Virginia-based defense and technology company, according to the most recent public filing showing his compensation. May also stands to earn $37,500 per year when he joins the board of nonprofit Charles Stark Draper Laboratory in October, according to UC officials. Draper facilitates research in defense, technology and medicine.
May, 52, said last week that he intends to keep his paid board seats once he becomes University of California, Davis, chancellor Aug. 1, but does not intend to accept any more such positions – complying with a UC senior manager limit that regents imposed last summer.
May, currently Georgia Tech’s engineering dean, was unanimously selected Thursday as the next chancellor of UC Davis by the UC Board of Regents. He will be paid $495,000 annually, which includes $75,000 raised privately for an endowed chair, making him the fourth-highest-paid chancellor in the system, based on UC records.
Between UC and board compensation, May stands to receive more than $820,000 a year. The UC Office of the President on Tuesday framed his outside board activity as an asset.
“The chancellor’s presence on these boards benefits the university,” said UC spokeswoman Dianne Klein. “They are not conflicts. For example, the Leidos board activity has resulted in millions of dollars in philanthropic gifts for Georgia Tech, and the company also hires Georgia Tech students.”
May was unavailable for comment Tuesday.
His predecessor, Katehi, drew criticism a year ago after The Sacramento Bee reported that she had accepted a lucrative position on the board of DeVry Education Group as it faced federal scrutiny for allegedly misleading students, and that she had previously received more than $420,000 serving on the board of textbook publisher Wiley & Sons. Some students and lawmakers said Katehi’s seats posed a conflict of interest because the companies profit directly from students.
Katehi faced broader scrutiny after The Bee reported she paid for image-enhancing firms to cleanse her reputation after campus police in 2011 used pepper spray on protesting students.
She resigned in August after an investigation found she violated multiple university policies but cleared her of the most serious allegations related to nepotism and misuse of student funds. She will return as a full-time faculty member this fall after a yearlong paid sabbatical at her chancellor salary.
As a result of public outcry over Katehi’s board seats, the University of California and California State University systems changed their policies. UC senior managers cannot hold more than two paid board seats at any given time, and positions must go through two layers of approval to ensure that moonlighting doesn’t pose a conflict of interest or “reputational risk.”
Ed Howard, senior counsel for the Center for Public Interest Law, is particularly concerned about the high salary that comes with May’s Leidos board seat.
“There is one of two possibilities, neither of which is comforting,” he said. “(First) in exchange for such a large amount of money, he is expected to do a large amount of work, which could detract from his duties as chancellor. The second possibility is that he isn’t required to do a lot of work, which makes the purpose of such a large amount of money inherently questionable.”
Klein said the board seats were approved under the new UC policy.
May attends Leidos meetings four times a year, working an average of 11 days annually, Klein said. She could not provide the number of hours May spends on the Draper board.
Klein did not know whether active contracts exist between Leidos and the University of California. “Like many high-tech companies, Leidos funds some university research,” she said.
Howard questioned how May’s board job with Leidos was approved under the new UC outside compensation rules.
“If this contract survived the university’s new policy, we are owed an explanation about how and why,” he said. “It is such a vast amount of money.”
May’s $325,780 in board compensation appears to outpace any amount received by UC chancellors in 2015, the last year for which UC has tallied outside pay. That year, only three UC chancellors from 10 campuses reported outside compensation: Katehi, UC Berkeley’s Nicholas Dirks and UC San Diego’s Pradeep Khosla.
Katehi that year reported $225,300 from finishing her term on the Wiley board the previous year. Dirks received $4,000 from serving on a foundation board. Khosla’s total could not be discerned from the UC document because most of his compensation came from private stock compensation whose value was not listed. He had seven outside positions, including two board seats.
UC San Francisco Medical Center CEO Mark Laret reported $580,000 in outside compensation from two board seats, the highest amount of any UC senior manager that year.
Being a UC chancellor comes with perks of its own. May will move into the 7,779-square-foot chancellor’s house with staff and a large household allowance, an $8,916 annual auto allowance and the option for paid memberships to clubs and other organizations when he comes to Davis, according to his letter of employment.
Once in office, UC chancellors have an “administrative fund allocation” for work-related entertainment and other expenses, as well a research fund. Travel expenses for chancellors and their spouses also can be reimbursed when on official business.
Chancellors also have the option to return to the faculty after they resign and are able to use sabbatical or administrative leave at full chancellor pay for a year before returning to teach. They can take advantage of a mortgage assistance program after they move out of the chancellor’s home, which offers below-market interest rates.
Such perks are standard for presidents of large universities, said James Finkelstein, a professor at George Mason University and an expert on corporate board participation by university executives.
“The (UC) system has felt it is too hard to recruit the top talent, so they are being more generous with perks than they have in the past,” he said.
The University of California doesn’t make it easy to determine the total value of a chancellor’s contract, Finkelstein said.
“Perks are not specified in the contract per se, they are included in other policies,” he said. “It’s a serious problem in transparency.”
Editor’s note (March 1): This story has been clarified to note that May will not join the Draper board until October after UC spokeswoman Dianne Klein provided that information Wednesday.
How the base annual salary of new UC Davis Chancellor Gary May compares to his peers:
Henry T. Wang
Source: UC Board of Regents