CSU Chancellor Admits Inflated Reports

On Feb. 8, Erik Fallis, spokesperson for Cal State University Chancellor Charles B. Reed, confirmed in an interview that a report used by his office to set a “benchmark” for determining CSU presidential salaries was based on misleading data that according to him, was “clearly faulty”.

The report, developed and maintained by the now defunct California Post-Secondary Education Commission (CPEC), was intended to provide the Chancellor’s office and other state entities with insight into how comparable universities to those within the CSU system were handling important fiscal issues like tuition, faculty salary, and presidential compensation. Instead the report used a list of institutions which included universities like USC, Rutgers, and Tufts; schools that bear little resemblance to most of the CSU’s 23 campuses.

A report recently provided by the CSU Public Affairs office confirms “The [list] included public and private institutions, with no relationship” to the CSU system with regard to “enrollment, budget, and mission.” Moreover, it was revealed that amongst the list of “comparators” used for establishing a benchmark for presidential salary were universities that paid their presidents between $800,000 and 2 million dollars in annual compensation.

This dissimilarity between comparators and CSU presidents led to an “artificially inflated…salary market ‘gap’” which was later used by the Chancellor’s office to justify increases in presidential pay, such as the controversial increase given to the president of San Diego State University last summer.

When asked if the Chancellor had any concerns about the viability of the list, Fallis admitted that over the past two decades his office has expressed concerns “numerous” times about the lack of equitability between the institutions contained in the list and those in the CSU system.  According to Fallis, the Chancellor brought his concerns about the list to CPEC but due to “institutional pressures” was forced to continue using it.

While it has not yet been revealed how influential the list was in determining presidential compensation, the fact that the Chancellor cited the results of the list as justification for last year’s $50,000 pay increase to the president of SDSU, indicates that it was a definite factor. When asked why the Chancellor used data he knew to be misleading, Fallis defended the Chancellor’s actions stating that his usage of the numbers was intended to provide the public with a “data point”.

This past January, the CSU Board of Trustees announced a major revision to the method used to determine presidential compensation. Included in the revision is a new list that, “Matches campuses and comparators based on common-sense criteria…such as student population, budget, and level of research.”

When asked what motivated the revisions, Fallis insisted that the changes made were meant as “an improvement of the existing process and not an indictment of the work done by CPEC.” But in a Frequently Asked Questions (FAQ) sheet provided by his office to further explain the reasons behind the new policy, the CPEC list is referred to as “inflated and outdated.”

Ironically, the CPEC website states that its primary mission was “to assure the effective utilization of public postsecondary education resources,” something that now seems to have been undermined by a list they refused to change, in spite of concerns expressed by the Chancellor. The question of why these concerns were never addressed remains a mystery.

What is known is that for 20 years the CSU Chancellor and Board of Trustees were forced to use comparison data that they now admit lacked a “common-sense” understanding of the criteria needed to establish appropriate “benchmarks” for several of the most important economic issues in their charter.