F. Compensation
1. Authority
1.1 State law (RSA 187-A:16 I, II, III, V, VI and XVI) delegates to the Board of Trustees authority to hire, employ and compensate such personnel as are needed to provide a well-coordinated system of public higher education.
1.2 Compensation Policy. The Board of Trustees retains the authority to establish compensation guidelines for annual increases and the principals and standards for distribution except as noted below. The Personnel Committee of the Board of Trustees shall be responsible for making a recommendation regarding distribution of salary increase funds. The Financial Affairs Committee of the Board of Trustees shall be responsible for making a recommendation about funding of the annual increase.
1.2.1 Role. The Executive Committee is a permanent committee of the Board of Trustees. Among the responsibilities and authority of the Executive Committee is that relating to executive compensation. This committee is responsible for the hiring and evaluation of the Principal Administrators within the University System of New Hampshire. The committee reviews compensation practices and programs for Principal Administrators, provides leadership in this area and upholds the tax-exempt status of the University System. The Executive Committee reports its determinations to the full board.
1.2.2 Composition. Executive Committee membership is appointed by the Chair of the Board of Trustees annually. Its composition normally includes the chairs of major trustee committees. There will be a minimum of five (5) members of the committee. The committee shall act only on the affirmative vote of at least a majority of the members present at a meeting. The chair of the committee is the chair of the Board of Trustees. Minutes and records of the committee's meetings will be maintained by the primary staff liaison.
1.2.3 Duties and Responsibilities
1.2.3.1 Review and approve cash and non-cash compensation policies and programs applicable to Principal Administrators. For purposes of this policy, USNH considers all employees who fit the IRS definition of "disqualified person" to be included in the Principal Administrator category.
1.2.3.2 Take all reasonable and prudent steps to comply with tax-exempt status ensure that no part of the University System's net earnings inures to the private benefit of any individual or group of individuals.
1.2.3.3 Establish and periodically review the University System's executive compensation philosophy to ensure that the policy appropriately supports the University System's purpose and mission, attracts and retains key executives at a reasonable cost and enhances the mission and purpose of the University System.
1.2.3.4 Act on behalf of the Board in setting executive compensation policy and making decisions with respect to the compensation of Principal Administrators by reviewing the annual base salary levels and performance evaluations.
1.2.3.5 Establish reasonable compensation levels on a position-by-position basis by:
Assessing the nature and scope of each Principal Administrator position
Assessing the basis for which compensation is paid to individuals holding such positions including unique background, experience, personal skills, exceptional performance, additional duties and abilities and challenges facing the organization that require the use of such attributes or skills
Obtaining appropriate and comparable compensation market data including data from the following:
Similarly situated organizations both for-profit and tax-exempt for functionally comparable positions;
The availability of similar specialties in the geographic area;
Independent compensation surveys by nationally recognized independent firms
1.2.3.6 Document the basis for the determination of the reasonable compensation including performance evaluations and market data
1.3 The Board of Trustees retains the authority to approve compensation agreements contained in collective bargaining agreements.
1.3.1 The Board of Trustees delegates to the Employee Relations Committee the responsibility to recommend compensation proposals for faculty or staff engaged in certified collective bargaining.
2. Delegation of Authority to Chancellor
2.1 The Board of Trustees authorizes the Chancellor, in consultation with the Administrative Board, to establish a job evaluation system and compensation policies. These shall comply with state and federal legislation, and shall be established and implemented to promote the goals of internal equity, reward for meritorious performance, effective recruitment, and retention of faculty and staff.
2.2 Pay Ranges. The Board of Trustees authorizes the Chancellor to establish a set of pay ranges and classification assignments for PATs, Academic Administrators, Extension Educators, and Operating Staff. The USNH Human Resource Director shall be responsible for establishment and maintenance of the pay program. Pay levels and ranges if applicable for faculty salaries shall be set by individual institutional authority, unless covered by collective bargaining obligations, subject to review by the Chancellor.
2.3 Supplemental Pay Policies. The Board of Trustees authorizes the Chancellor to establish compensation policies relating to hours of work, work in excess of a regularly classified and compensated work day, holiday pay, shift differentials, and policy for payment of hourly and other non-status employment.
2.4 The Board of Trustees authorizes the Chancellor to make administrative adjustments as defined below. Such responsibility shall be delegated for administrative purposes to the USNH Director of Human Resources.
2.4.1 Definition. An administrative adjustment is a salary increase that may be granted by the USNH Director of Human Resources, upon the recommendation of the Chief Campus Personnel/Human Resources Officer, when such an adjustment is necessary:
To compensate for an administrative error,
To conform to other provisions of the compensation program, or
Because it has been otherwise demonstrated to be in the best interest of the University System.
2.5 The Board of Trustees authorizes the Chancellor to establish compensation policies for personnel actions including promotion, transfer, demotion, and reclassification.
3. Executive Compensation Policy. The Executive Committee of the Board of Trustees shall review and approve compensation for Principal Administrators using the following options and procedures. It is the goal of the following statements, that the Board of Trustees establish an overall compensation philosophy and practice that will foster its ability to attract and retain highly qualified candidates for leadership positions within the University System. The University System aspires to establish accountability and recognition systems that will foster the accomplishment of those strategic goals which support the mission of its institutions. This includes both the vigorous processes for establishing and reviewing goals as well as policies and practices that recognize the importance of the contributions of the organization’s leadership to its overall success.
3.1 The policy of the University System is to provide direct compensation programs which reflect the relative size and type of education curriculum of the University System in the segment of higher education institutions of which it is a part and which accomplish the University System's mission and tax exempt purpose without causing any part of the University System's net earnings to inure to the private benefit of an individual or group of individuals.
3.2 Market and Competitive Salary Options. The Committee will accomplish this policy in the following manner:
3.2.1 Determine the relevant market data for the Principal Administrator position it reviews by obtaining reliable and comparable data from published surveys of both tax-exempt and for-profit organizations focusing on data from comparably organized institutions with similarly sized budgets.
3.2.2 Develop a target base pay range built off the median of the market data.
3.2.3 Consider the 75th percentile of data to address an individual who has maturity in performance regardless of specific tenure.
3.2.4 Set base salary by considering both market data and each individual's background experiences, skills and meritorious contribution.
3.2.5 Set salary increase reassessments based on external equity, internal equity and merit as defined below.
3.3 Merit and Performance Related Increases. The Board of Trustees recognizes the importance of individual performance in the success of group and organizational strategic goals. In order to effectively establish individual objectives that enhance the mission of the University System, the Chancellor and Presidents will establish annual strategic goals for Principal Administrators. These goals shall form the basis of annual review and annual compensation increases.
3.3.1 The Executive Committee shall approve individual salary base rate salary increases based on performance and market conditions as recommended by the Chancellor. The level of increases will typically be consistent with the statements and conditions included in the "Annual Salary Distribution Guidelines" as approved by the full Board of Trustees for other professional staff. However, it is also expected that an increase will not be appropriate unless based on performance success.
3.4 One-Time Bonus Recognition. The Chancellor may also recommend one-time payments in recognition of performance, specific success in achieving pre-determined goals, or recognition of an unplanned but successful accomplishment. The Executive Committee may approve one-time bonus payments after review of recommendations. The PA has the option of receiving the bonus as taxable income or placing the bonus as an employer contribution in the 457(b) deferred compensation plan. The range and number of bonuses, the total amount, if any, to be spent on bonuses, and the criteria for award of bonus, including the option for team or individual bonuses will be set by the Executive Committee and is expected to vary annually, based on overall institutional and system financial circumstances and compensation need.
3.5 Deferred Compensation for CEOs. The Chancellor may also recommend one-time or multiple year payments to a deferred compensation plan for a Chief Executive Officer after a minimum of two years of USNH service.
3.5.1 The Executive Committee may approve a one year, non-reoccurring payment, or multi-year payments to USNH's deferred compensation program (401(a) plan) for the purpose of retention with a five-year vesting plan. The amount of the deferred compensation may vary by individual and by year. Recommendations from the Chancellor shall be made to the Executive Committee or the subcommittee on Human Resources but shall not exceed 15% of the CEO's annual salary rate, and shall be subject to federal tax and legal obligations and limitations for deferred compensation awards.
3.6 Professional Development
3.6.1 Eligibility. Principal Administrators are eligible for leave that will enhance their professional growth and improve the quality of higher education within the University System. It is anticipated that professional improvement/development leaves will be focused upon specific areas of development or study that have direct impact on the Principal Administrator work at the University System. Such leaves shall be available as a matter of privilege rather than right and are subject to the criteria set forth below.
3.6.2 Application. Approval is required of a specific proposal for professional development leave which outlines the benefits expected for both the University System/campus and the Principal Administrator. Leaves of Absence will be recommended by the Chancellor and will require approval by the Executive Committee of the Board of Trustees.
3.6.3 Duration of Leave. Leave for professional development may be granted after five years of full-time service as a Principal Administrator in the University System. Such leave may be of varying duration not to exceed one month at full pay or two months at half pay per year of service up to a maximum of three months at full pay or six months at half pay.
3.6.4 Conditions. Principal Administrators who receive approval for professional development leave will normally be expected to return to employment within the University System (to the same or a higher position) immediately following the expiration of the leave. The Principal Administrator, upon return to the University System, will be expected to submit a report summarizing the professional activities of his or her leave to the Chancellor and the Executive Committee of the Board of Trustees.
4. Procedures
4.1 The Committee shall execute the policy as follows:
4.1.1 In order to be eligible for any general or merit increase a Principal Administrator must have at least six months of service in the position as of the effective date of the increase.
4.1.2 A Principal Administrator, who has more than six months of service, but less than 12 months, will be eligible for pro rated general or merit increases. Equity increases may be awarded as appropriate.
4.1.3 Actual base salary for an individual relative to the target pay will be determined upon recommendation of the Chancellor. These recommendations shall be consistent with the above principles.
4.1.4 The Executive Committee subcommittee for Human Resources will establish protocol for decisions and communication of the proposed dollar level of a pool of funds to be used for one-time or bonus payments as described in policy BOT V.F.3.4 as well as any limitations applicable for that year. The establishment of the pool, if any, will serve as a maximum level of award and not as a guaranteed distribution.
4.2 The following surveys will be referenced:
4.2.1 "Rank-order Distribution of Administrative Salaries Paid" by University of Alabama and University of Arkansas.
4.2.2 "Administrative Compensation Survey" by College and University Personnel Association.
4.2.3 "Chief Executive Compensation and Benefits Survey" by College and University Personnel Association.
4.2.4 "Industry Report on Top Management Compensation" by Watson Wyatt Data Services.
4.3 The Committee may also reference other published surveys on occasion and shall document the reason and purpose of consulting such other surveys.
5. New Hires/Appointment Conditions.
5.1 Approval of Appointment. The Executive Committee shall review and approve all Principal Administrator appointments including the level of compensation and title. Confirmation of employment shall be in a written "letter of appointment." Written confirmation of employment is considered notice of appointment rather than contracts. These letters will contain the annual salary rate and effective date of appointment as well as confirmation that the appointment is subject to Trustee, USNH and institutional policy. These letters shall be reviewed and authorized for clarity and content by the USNH General Counsel. In addition the letters shall be approved by the Board Chair for the Chancellor of the University System; by the Chancellor and Board Chair for the Presidents, and by the appropriate institutional President and Chancellor for all other Principal Administrators.
5.2 Conditions of Appointment. Letters of appointment shall include any additional information about conditions of employment as approved by the Executive Committee. Only those options described below may be approved as part of an initial appointment to a Principal Administrator position. Housing and payment for related expenses for residential campus Presidents, including reasonable “home office” services and technology and use of a USNH paid for automobile for the Chancellor and Presidents may be offered and will not require approval by the Executive Committee. All other options listed below require individualized approval at the time of appointment by the Executive Committee.
5.2.1 Options to be included in an initial appointment include the following choices. It is anticipated that the options will be tailored to the compensation and market demands at the time of hire.
5.2.1.1 Housing Allowance. This is an option to provide a non-residential campus CEO an annual lump sum, taxable, supplemental payment in lieu of housing.
5.2.1.2 Entertainment Allowance. This is an option to provide a recurring or non-recurring lump sum, taxable, supplemental payment for the purpose of covering entertainment costs related to the work of USNH.
5.2.1.3 One time Transition Payment. This is an option to provide a lump sum, non-recurring supplemental payment intended to aid transition to a new position, including, but not limited to the costs of moving and/or relocation. It is subject to applicable taxation.
5.2.1.4 "Home office" options. This is an option to provide phone lines, computers, or other appropriate technology or telecommunication equipment or services.
5.2.1.5 Tenure or Concurrent Faculty Appointment. An appointment with tenure is an option available only to CEOs, Provosts or the Vice President for Research and Planning-UNH. This option does not assume that the salary associated with the President or Provost will continue into the Faculty position. If a Principal Administrator with tenure decides to return to teaching, the salary for the instructional position shall be consistent with that of the rank and service for faculty in the specific discipline. If tenure is not appropriate, the Chancellor, President or Provost may be offered a one year transition to a teaching or research assignment.
5.2.1.6 Professional Development. This is an option to provide funds for attendance at a specific professional development program of a significant nature in terms of time and cost.
5.2.1.7 Salary Incentives. Principal Administrators will be eligible for annual salary increases. These are expected to be decided annually and in the discretion of the Executive Committee. In addition, one-time bonus payments may be included in the annual compensation awards tied to successful completion of identified annual strategic goals.
5.2.2 Notice and/or Severance Payment. The initial appointment letter may outline the method of notice and/or separation as outlined in policy BOT F.V.6.
6. Voluntary and Involuntary Separation and Retirement. The Executive Committee of the Board of Trustees, or its Human Resource subcommittee, is responsible for the approval of recommendations for involuntary terminations of Principal Administrators.
6.1 Voluntary Retirement or Separation. It is anticipated that Principal Administrators shall give at least 30 days notice of resignation or retirement. A longer notice period may be specified in the terms of appointment and shall supersede the minimum specified in this policy. Unused vacation days, up to the policy maximum of 30 days will be paid to terminating Principal Administrators.
6.1.1 Voluntary separation for a Chancellor, President, Provost or Vice President shall include a paid transition leave of one month per year of service up to a maximum of 6 months if that Principal Administrator is returning to teaching.
6.1.2 Voluntary separation of a Principal Administrator without the teaching and/or tenure option shall include a paid transition leave of one week per year of service.
6.2 Involuntary Separation. Principal Administrators serve at the pleasure of the Executive Committee and are considered to be "at will" employees. As such decisions to involuntarily terminate a Principal Administrator shall be subject only to state and federal requirements for due process, non-discrimination and consistency with public policy. Reasons for involuntary termination may include, but are not limited to issues around performance, reorganization, cost containment, supervisor's loss of confidence and changes in strategic direction.
6.2.1 If a PA is recommended for termination he/she shall be given 90 days notice of termination unless the separation is due to guilt in a crime, or other institutionally determined destructive or detrimental action such as, but not limited to, violations of conflict of interest or fraud.