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Dr. Robert L. Caret chats with guests at an event in December introducing him as the incoming chancellor of the University System of Maryland. USM officials say they agreed to a compensation package with Caret that is roughly equivalent to what he was making as head of the University of Massachusetts system. (The Daily Record/Maximilian Franz)

Nearly a $1 million man?

New USM Chancellor Caret’s pay and perks package grows over five years

By the end of his five-year contract, the University System of Maryland’s new chancellor’s total compensation could easily exceed $900,000 annually.

Incoming Chancellor Robert L. Caret, who previously served as president of Towson University and most recently as president of the University of Massachusetts system, agreed to take over as the USM chief late last year. According to his contract, obtained by The Daily Record, Caret could make $838,699 in the final year of the pact if he receives an annual 5 percent cost of living adjustment and a 15 percent performance bonus.

On top of that, under the terms of the contract, Caret will be reimbursed $15,000 annually for the cost of purchasing life insurance, and the system will annually purchase a $53,000 fixed annuity for him. He will also receive free housing.

Caret’s contract, which was finalized in late February, begins with a $600,000 base salary in the first year of the deal that begins on July 1, and he will receive at least a 5 percent cost-of-living increase each year in a non-salary freeze year.

The University System of Maryland Board of Regents will determine if he receives the 15 percent bonus based on goals that group sets.

James L. Shea, chairman of the USM Board of Regents, said the contract that was negotiated with Caret was almost exactly the same compensation he was receiving for running the University of Massachusetts system, which has about half the students and half the budget as the Maryland system.

“Naturally, he did not want to make a move and disrupt his professional and personal life and come to Maryland for a cut in pay, and given that we’re a larger system, and I might say more prestigious, but that’s a little subjective, we didn’t think it was justified to ask for a cut in pay,” Shea said.

Chancellor William “Brit” Kirwan’s reworked contract called for him to receive a base salary of $499,800 starting on July 1, 2013, with 3 percent cost-of-living increase on Jan. 1, 2014, and a 5 percent merit increase on April 1, 2014, which then served as his base salary for the current fiscal year. Kirwan’s contract also allows for the board to award him up to $500,000 as a one-time performance bonus at the end of his tenure.

James Finkelstein, a professor of public policy at George Mason University, who has researched executive compensation in higher education, said he couldn’t discuss the specifics of Caret’s contract because he had not read the agreement. But generally, he said, compensation for top executives in universities and educational systems continues to escalate, in large part because executives are acutely aware of what their peers are earning and are trying to advance their careers by moving to larger and larger institutions.

“The presidents pay enormous attention, enormous attention, to the packages that their peers are getting, and increasingly presidents are being represented by, I don’t want to call them agents, but lawyers, and in some cases compensation experts advising them on contracts,” Finkelstein.

Caret will enjoy some perks that his predecessor has also received. He will be provided, for free, with a Baltimore County home, called Hidden Waters, as well as a car and driver. The deal also allows for 25 annual leave days, 3 days of personal leave and 15 holidays in federal election years.

One major perk in Caret’s contract is that it allows for him to return to Towson University as a full faculty member. Caret can apply for tenure, and if approved, will be eligible to take a one-year sabbatical at the completion of the five-year contract during which he’ll be paid the same base salary as his final year as chancellor.

Following that sabbatical he could return as a full-time faculty member at the school and receive 75 percent of his final-year base salary for one year and then 50 percent of final year base salary from there on out.

Finkelstein said those kind of stipulations in contracts are fairly normal for campus-based presidents, but more rare for system chancellors because they tend to be more like “government administrators” than academics. But he warned that schools should be careful about how those arrangements are handled.

“If they’ve served for a long time, and they step down and they go back to the faculty the questions is, ‘What is their compensation when they go back?’ The question is whether or not that compensation is a benefit for having served as president or whether it is really employment — that is whether they really fulfilling the roles and responsibilities of a regular faculty member?” Finkelstein said.

CORRECTION: This story originally included a provision that was dropped in the final version of Robert L. Caret’s contract. A cost-of-living increase due in a year with a salary freeze would not be deferred to the next, non-salary-freeze year. We regret the error.

 

Some other public university presidents’ pay 

Nancy Zimpher

State University of New York system

Total compensation: $621,000

Base pay: $490,000

Bonus pay: 0

Deferred compensation: $110,800

Retirement pay: $20,400

Added benefits

Housing allowance: $90,000

Car value: $25,811

Hank Huckaby

University System of Georgia

Total compensation: $448,423

Base pay: $425,000

Bonus pay: 0

Deferred compensation: 0

Retirement pay: 23,423

Added benefits

Housing allowance: 72,000

Car: $7,835 (lease payments)

Thomas Ross

University of North Carolina system

Total compensation: $578,363

Base pay: $525,000

Bonus pay: 0

Deferred compensation: 0

Retirement pay: $53,363

Additional benefits

University owned house

Car allowance: $12,843

David Buhler

Utah System of Higher Education

Total compensation: 323,924

Base pay: $235,000

Bonus pay:

Deferred compensation:

Retirement pay: $88,924

Additional benefits

Housing allowance: $19,950

Car allowance: $6,840

Compensation figures by the Chronicle of Higher Education based off of the 2013 fiscal year