All the president’s cash
Alberta’s auditor general, Fred Dunn’s, office is taking a closer look at how universities and colleges report salaries and bonuses paid to their executives in light of the $4.5 million leaving University of Calgary with outgoing president, Harvey Weingarten.
Where it relates to Mount Royal University, Jeff Dumont, assistant auditor general, says, “We’ll certainly be looking at that note,” referring to the salaries and benefits notes section of MRU’s financial statements.
MRU president, Dave Marshall’s salary and benefits are calculated on an annual basis. According to vice-president of administrative services Richard Roberts, Mount Royal University’s board of directors “has a comprehensive process in place to both evaluate the president’s performance annually and to set appropriate compensation levels.” The board of governors is responsible for CEO’s salary determinations and performance reviews.
Roberts explains that CEO salaries are determined based on certain expectations laid out by government and also within guidelines of appropriate compensation across Canada for executives at top levels of schools. Salaries are comprised of a base, certain additional cash benefits and additional non-cash benefits. Those non-cash items include benefits that accrue annually. How those are paid is determined by the president in conjunction with the board of governors.
All MRU employees are covered under the local authorities pension plan. The college president benefits from supplemental coverage, which tops up the portion of his salary that is over the salary limitations imposed by government.
Marshall’s salary was renegotiated in June 2008 at the expiration of his five year contract. Despite a rise in Marshall’s base salary, his overall compensation had decreased in 2008, the first year of his new contract.
“The biggest difference is the administrative leave — one of the benefits (Marshall) is eligible for at the end of his five year term. He has the ability to take a leave, a common feature of executive compensation,” Roberts explains. That leave was recognized at the end of 2008. Marshall did not take an actual leave so cash was paid in lieu.
The president’s annual leave amount is $75,000, which accrues each year. The dollar value is noted in MRU’s annual financial statements. “The amount paid in 2008 was higher, as it was recorded on a slip-year basis. Because it was the end of his term, two years were reported. It’s a common reporting function.”
Non-cash items in the president’s annual salary include employers costs associated with providing the following benefits: health, dental, disability, life insurance, pension, supplemental pension, administrative leave, employment insurance, workers’ compensation and club memberships.
Salary levels reflect the president’s position and experience and are comparative to those of presidents at other academic institutions. Roberts pointed out that executive salaries are designed to attract and retain excellence at leadership levels and suggested that with the work that was required to bring Mount Royal to university status, it’s president’s annual salary was not out of line.
However, despite a rise in Marshall’s base salary, his overall compensation for 2009 has actually decreased due to payments related to his contract renewal in 2008. Roberts confirms draft numbers show a total annual compensation of $400,207, down from approximately $473,000 in 2007. Final confirmation of Marshall’s 2008 compensation will happen when MRU’s financial statements are approved at the end of October 2009.
Dunn’s office made it clear that MRU is not under any specific scrutiny, as was University of Calgary, owing to MRU’s accounting practices.
“We have no expectations that anything similar would happen at MRU,” confirmed Jeff Dumont, noting that University of Calgary’s difficulties stem from a six-year period where the U of C president’s bonus was still being determined and so was not part of its annual report. MRU’s annual financial statements show clearly annual amounts accruing related to salaries and there are no gaps in that reporting.
In his auditor’s notes to MRU’s 2008 financial statements, Fred Dunn writes, “In my opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the college as at June 30, 2008 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.”
Richard Roberts confirms there is a solid process in place to ensure the president’s compensation is in line with executives and consistent with other presidents across the academic system. “It’s really difficult to take a particular aspect of that (salary structure) and say ‘is that a problem or not.’ You have to look at the entire compensation package and say is it reasonable, given the individual. That’s the board’s job to do that.”
At the end of his term in 2008, Marshall signed on for another five years as the head of MRU.