KCTCS Compensation Study Relied On Flawed Data, Methodology
The president of Kentucky’s community college system makes $375,000 annually, a paycheck that’s right on the money when compared with similar institutions, at least according to a school-funded consultant’s report.
Consultant Lyle Hanna briefed a few members of the Kentucky Community and Technical College System board of regents last week on his comprehensive review of President Jay Box’s pay. Hanna’s review, funded by KCTCS, found Box’s compensation is very close to the average of his peers:
“Amazingly,” Hanna said, “right on the target.”
In hitting that target, though, Hanna relied on flawed information, including a cherry-picked group of peers and data that doesn’t exist yet.
Among the issues in the report:
- It compares the leader of the community college system to large public university systems
- It includes salaries for this year that Hanna’s staff estimated
- It uses figures for high-paid Kentucky presidents that the consultant knew did not reflect their actual pay.
The compensation report comes amid widespread criticism of perks the regents gave its former president, Michael McCall. McCall, who retired in January 2015 after a 16-year run, received more than $800,000 last year to serve as president emeritus. Of that, $352,066 was for unused vacation days, $124,249 in deferred compensation and $38,460 in his final two working paychecks, according to a pay breakdown obtained by the Kentucky Center for Investigative Reporting. (Read "Despite KCTCS Declines and Cuts, Former President Got Huge Payout")
Legislators have asked for hearings on college executive compensation, and faculty and staff have expressed outrage as news of the payouts coincided with the college system eliminating more than 500 jobs.
KCTCS hired Hanna Resource Group last year for $100,000, a sum that also pays for an evaluation of faculty and staff pay that has yet to be released.
P.G. Peeples, chair of the compensation committee that heard Hanna’s presentation last week, said he would bring the information to the next meeting of the full Board of Regents, which will decide whether to offer Box a raise.
“I know the board is going to be pleased to receive this and know that we are a lot more current,” Peeples said, noting that the last time they did a comparison was 2003, during McCall’s tenure. “This is very valuable and very necessary information.”
Hanna, the CEO of Hanna Resource Group, said there are few systems as large and complex as KCTCS, so they used a large swath of comparisons.
"We really did secure a lot of data so we felt very comfortable about the numbers," Hanna said.
Hanna said he used several different surveys to come up with some averages, and then averaged those to arrive at the competitive market figure. But the data from at least a couple of those lists is problematic.
Hanna’s report relied on an average of four different surveys, without any weights for cost of living differences.
Thomas Hyatt, general counsel for the American Association of Governing Boards of Universities and Colleges, said he would be concerned about any study that didn’t carefully measure the attributes of different presidents, including the seniority of the president, the salaries in the region and the level of education provided at the institution.
“You would look at all these factors and others that are relevant to determine who your real peers are,” Hyatt said. “If you haven’t done that, then the analysis is incomplete and worst case, it’s erroneous.”
Hanna said he used the Chronicle of Higher Education’s parameters in deciding peers for KCTCS’s president in a list called “comparable community college system leaders.” But four of the six peers listed -- University of Nebraska, University of Wisconsin, University of Hawaii and California State University systems -- oversee at least one doctoral-level research university campus.
While KCTCS has about 80,000 full-time students and a $888 million operating budget, all of its campuses offer two-year degrees exclusively.
Hanna said the list was derived from the Chronicle’s website, which uses an algorithm that Hanna acknowledged doesn’t separate colleges from universities. The list lays out 2015 and 2016 base salaries as well as total compensation for the leaders.
But neither 2015 or 2016 data is on the Chronicle website.
Joshua Hatch, the Chronicle's assistant managing editor for data and interactives, confirmed the most recent year’s information on their site for public college presidents is 2014.
Hanna’s list contains several other inaccuracies. For example, University of Nebraska President J.B. Milliken left the system in 2014, but Hanna’s report names him as the current president - and includes base salary information for 2016 that’s about $83,000 below what the current president makes.
Hanna “aged” the 2016 data by arbitrarily increasing the previous year’s numbers by 2 percent.
Hatch said the Chronicle’s algorithm is built with public accountability, not consultant’s reports, in mind.
"We are not taking a position of what is high or low. It really is about providing accountability for public colleges about how much taxpayers are paying," Hatch said.
Hanna’s report left out the three highest paid presidents on the Chronicle’s list. Those three all made more money than McCall, and their inclusion would’ve have bumped the average compensation of the group up by $65,000.
Another measure used by Hanna compared Box to other Kentucky institution presidents, which Hanna said was collected directly from the institutions. That measure found Box’s pay to be below average - but then, so was University of Louisville President James Ramsey.
The survey used Ramsey’s reported base salary of $360,283 despite numerous media reports and disclosures from U of L that Ramsey is paid a much higher salary in his dual role as president of the University of Louisville Foundation. He took home $2.4 million in 2014, according to the most recent tax return.
Hanna said his company couldn’t verify those numbers and using the larger figure for Ramsey would have put the average “through the roof.”
“That wasn’t fair, I don’t think,” Hanna said of using Ramsey's whole compensation.
Box is paid very well when compared to other community college system presidents, the consultant’s report shows. His total compensation puts him in the top five of a list of 16, and he makes about $77,000 a year above the average for that group.
Reporter Kate Howard can be reached at firstname.lastname@example.org and (502) 814.6546.
[documentcloud url=https://www.documentcloud.org/documents/2851783-KCTCS-System-President-Report.html format=normal sidebar=false ]