NDP says new salary rules for Alberta university brass will save $5 million a year

http://edmontonjournal.com/news/politics/government-to-announce-pay-rules-for-alberta-university-top-brass Juris GraneyJURIS GRANEY More from Juris Graney Published on: April 10, 2018 | Last Updated: April 10, 2018 10:04 PM MDT Bonuses, short-term incentives and executive allowances to presidents of Alberta’s post-secondary institutions are among some of the perks being axed as the province looks to rein in executive compensation. Advanced Education Minister Marlin Schmidt announced Tuesday wide-sweeping plans to which presidents, vice-chancellors and chief executive officers of 20 publicly funded university and colleges must adhere. The new regulations take effect next week and by the time a two-year transition period is over, the move is expected to save up to $5 million by 2020, Schmidt said. Those savings will go back to each of the institutions in a way that benefits students and will not affect Campus Alberta grants, he said. A five-level model will take effect April 15 and sets the maximum base salary top brass can earn. Examples of which levels apply to which institutions are below: • Level five: $447,000 maximum — University of Alberta and University of Calgary (Currently, U of A president David Turpin takes home about $824,000 in salary and benefits. His base salary is around $500,000.) • Level four: $356,800 — NAIT, SAIT and the University of Lethbridge • Level three: $305,000 — MacEwan, Athabasca and Mount Royal • Level two: $267,500 — NorQuest and Red Deer colleges • Level one: $235,100 — Lakeland, Olds and Northern Lakes colleges Under the new rules, a president could earn the base salary plus around 20 per cent in additional benefits. The Post-Secondary Compensation Regulation also puts an end to offering memberships to gyms, sports clubs or fitness facilities as part of a compensation package and restricts executive or private health benefits. Instead, any form of retirement plan or benefit must not be more than what is available in the public service under the Public Sector Pension Plans Act. Executive severance pay is capped at 52 weeks. Pay in lieu of a retirement plan or benefit cannot exceed 14.36 per cent of the base salary. Personal travel allowances have also been eliminated; as well, new restrictions have been imposed on car allowances and housing benefits. Public agencies can provide a residence as accommodation as long as the executive pays full market value rent. Vehicle allowance is capped at $6,000 a year and if a vehicle is purchased, its price cannot exceed $39,000. Schmidt said the new salary limits allow for flexibility to reward exceptional candidates for their skills and experience and will mean the province will stay competitive. “For too long, executive salaries have been left unchecked and this led to compensation packages that were out of touch with those in the broader public sector and with the expectations of everyday Albertans,” he said. Schmidt said one of the biggest concerns that came to light when they first started looking at executive pay was the lack of unanimity across the province, with variable pay existing at some institutions and not others, and different levels of executive pay across schools. Each institution will now be required to provide a compensation plan to the department to make sure they comply with the regulations. Government will follow up through the budgetary process to ensure they are following the plan, but making sure the money is being used appropriately, Schmidt said. Between five and eight current contracts across Alberta that extend past the 2020 deadline will need to be brought into line with the new regulations, he said. Using the five salary levels as a starting point, institutions will now be required to create compensation plans for everybody in senior administration. Schmidt said government will phase in new senior administration pay plans by 2020. The new regulations will not impact wages covered by collective bargaining agreements, he said. jgraney@postmedia.com