The University Board of Regents endorsed a new compensation policy for executive officers yesterday that sets clearer guidelines than previous practices.
In the wake of confusion over secret contract deals made by former University President James Duderstadt, President Lee Bollinger brought the plan to the regents at yesterday's board meeting.
"I think it's terrific," Regent Philip Power (D-Ann Arbor) said. "It's clear. It's explicit. It makes sure we don't have any secret funny business, and it's a modern compensation plan that says we are looking for the very best people we can get and we will pay market price rates for them."
Power also announced that two executive officers - Vice President for University Relations Walter Harrison and Vice President for Development Thomas Kinnear - do not intend to act on stipulations contained in employment deals they previously made with Duderstadt.
In fall 1995, Duderstadt made employment arrangements with executive officers, which included retirement furloughs and one-year administrative leaves, without consulting with the regents.
Duderstadt made the deals with then Vice President for Research Homer Neal, Provost J. Bernard Machen, former Chief Financial Officer Farris Womack, Harrison and Kinnear.
"Dr. Harrison and Dr. Kinnear have informed the regents they intend not to exercise provisions having to do with administrative leave that were contained in employment agreements executed between them and Dr. Duderstadt," Power said.
In a letter to attorneys, Harrison said all employment agreements made between him and Duderstadt were legal.
Harrison wrote that he relinquishes all benefits in the prior agreements because Duderstadt did not consult with the regents before making the arrangements.
"I have always valued most deeply my relationships with all of the regents, and I do not wish to serve without their full endorsement of any arrangements made between the president and me," Harrison said.
Kinnear said he relinquished his claims to the Duderstadt deal last summer because the terms of the agreement granted him a sabbatical and he already has earned two sabbaticals based on his years of service.
"The agreement was redundant," Kinnear said. "I (relinquished) it before (the secret deals) became public. It didn't seem important at the time."
Bollinger asked the regents for their endorsement of the policy - his first public request to the Board of Regents since he took office two weeks ago. Yesterday was the first board meeting where Bollinger sat at the head of the table.
In a letter to the regents, Bollinger set forth the principles of the policy.
"These principles may perhaps seem stringent, but I can assure you they are perfectly normal in the academic world," Bollinger stated in the letter.
As part of the policy:
The regents unanimously endorsed Bollinger's new policy.
"The president will talk to the regents," Power said. "The policy will avoid any repetitions of past problems that arose with agreements President Duderstadt made, but did not share with the regents."
Duderstadt said he is "vaguely aware" of Bollinger's proposal.
"This is certainly his prerogative and it should be any president's," Duderstadt said. "Although I tended to follow the practices of my predecessors, a president should be free to move in new directions if they believe this is appropriate.
"In the end all such policies will be evaluated in terms of the quality of people attracted to these important positions," Duderstadt said.
Regent Andrea Fischer Newman (R-Ann Arbor) said the most significant part of the plan is that everything is all laid out in the open.
"The problem we had in the past was that no one was aware of what was going on," Newman said. "The fact that now it is all out in the open is what is different from the past."
Kinnear said that, in the past, the regents gave the president sole discretion in making contract arrangements with the executive officers.
"I think that left some things ambiguous to what was appropriate and what was not," Kinnear said. "I think what the new policy does is to clarify certain guidelines for the president to operate under and keeps the regents informed of the president's actions."
-Daily Staff Reporter Katie Wang contributed to this report.