UC Davis’ Katehi gets $424,360 ‘parachute’ common for university presidents

After resigning Tuesday as UC Davis chancellor under a cloud of controversy, Linda P.B. Katehi will take advantage of a University of California perk that allows campus leaders to receive chancellor-level pay with few responsibilities for one year.

Katehi will continue to receive her salary of $424,360 plus retirement and health benefits, but she will not have to teach classes in her transition year, after which she plans to become a UC Davis engineering professor.

“The purpose of the administrative leave after stepping down is to allow the person to gear back up for being a productive member of the faculty,” said Dianne Klein, a spokeswoman for the UC Office of the President, in an email. “They are supposed to use that time to get back up to speed on the developments in their field, begin the steps necessary to restart or build up their research lab, etc.”

Katehi, 62, resigned Tuesday following months of controversy that began when she accepted a board seat in February with for-profit DeVry Education Group as it faced federal scrutiny for allegations that it misled students. She came under fire when The Sacramento Bee reported she spent heavily on image-enhancing firms to boost her reputation after the 2011 pepper-spraying of students by campus police.

Further allegations and statements made by Katehi prompted UC President Janet Napolitano to launch a three-month investigation of her actions. Lawyers from Orrick, Herrington & Sutcliffe cleared her of the most serious allegations of nepotism and misuse of student funds. But they found she had violated multiple university policies, exercised poor judgment and was dishonest with Napolitano and the public, the system announced.

While Katehi will receive her chancellor’s salary and health and retirement benefits, she will lose her Senior Management Group benefits, including a $9,000 annual automobile allowance, according to Klein. She will not accrue vacation during her year of administrative leave.

She will have to repay her salary if she doesn’t return to the UC Davis faculty the following year and work for an entire year, Klein said.

The practice of paying a college president an additional year after leaving office is common across the country, said James Finkelstein, a George Mason University professor and expert on university executives.

“What she is getting is very typical of the type of parachutes that other presidents have had,” he said.

Finkelstein said the policies began after lawyers started representing university presidents in contract negotiations. “It has begun to slip over from the private sector into the university sector – what I call the CEO-ization of the university presidency,” he said.

After the transition year, university presidents who return to the classroom are typically paid more than their counterparts, Finkelstein said. Their faculty-level salaries are usually determined by a formula that uses a percentage of the presidential salary or by the highest salary in their discipline, he said.

Finkelstein said former campus leaders also receive perks like nicer offices, an administrative assistant, graduate assistants and a discretionary account for travel.

“It’s very rare that they are treated as a typical faculty member would be,” he said.

At Davis, Katehi will land in the department of electrical and computer engineering in the College of Engineering. Her professor’s salary will be determined by her department at UC Davis, Klein said.

Finkelstein said the University of California is better than most university systems because it uses the chancellor policy consistently across its campuses, with room for negotiation with the regents and president. A Sacramento Bee review of pay data for six of the most recently retired UC chancellors shows that all but one had a transition year salary within 10 percent of their chancellor pay.

California State University has a similar “executive transition” policy, although the president receives less than his or her executive-level salary. The pay is the amount halfway between the executive’s salary and the maximum salary for a full professor. CSU presidents have taken advantage of this policy in recent years before returning to the faculty.

Alexander Gonzalez, who stepped down as CSU Sacramento president at the end of June 2015, elected to return to the faculty for one semester after retiring but did not take advantage of the executive transition policy, according to CSU officials.

Katehi last was a full-time professor in 2001, when she taught electrical engineering and computer science at the University of Michigan.

The investigation of Katehi came on the heels of a series of Sacramento Bee stories that outlined a series of missteps by Katehi including taking a board seat with DeVry University as it faced a federal investigation into whether it misled students. She did not receive final sign-off from Napolitano before accepting the seat, which paid $170,000 annually in stock and salary. Katehi resigned that position within days under pressure from Napolitano, Assemblyman Kevin McCarty, D-Sacramento, and watchdog groups.

The Bee also reported the chancellor had previously received $420,000 in income and stock over three years as a board member for John Wiley & Sons, a publisher of textbooks, college materials and scholarly journals. Critics said that represented a conflict because students and state leaders were seeking to reduce the cost of textbooks and use free alternatives. Katehi had permission from UC to join that board.

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Other Bee reports have included the expenditure of at least $175,000 by UC Davis to scrub the internet of references to a 2011 incident in which campus police pepper-sprayed nonviolent student protesters – an amount that ultimately topped $407,000, according to the UC investigation – as well as $174,000 spent on international travel that included first-class upgrades and limousine rides.

“Now that the investigation is complete, we will consider next steps,” Klein said. “I am referring to other employees who were found to have violated UC policies.”

Diana Lambert: 916-321-1090, @dianalambert

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