UT-Pan American Leader Wants to Put His Bonuses in University's Pocket

University of Texas-Pan American President Robert Nelsen won’t be participating in the University of Texas System’s new incentive pay plan — at least, he won't directly benefit from the plan.

Nelsen, who assumed the presidency in 2010, told The Texas Tribune that he has made up his mind to take any bonus he earns under the new system and give it to his university in Edinburg. “There’s no question that if I do earn a bonus, it will go the university, because the entire university will have helped earn that bonus, not me personally,” he said.

The UT System Board of Regents approved a new incentive plan for its university presidents and system executive officers at its August meeting, under which a bonus of up to 10 percent of their compensation at the end of the next fiscal year could be contingent on meeting certain benchmarks.

The specific goals for presidents haven't been determined, but they will be specifically tailored to each individual university. They will probably be guided by the goals of UT System Chancellor Francisco Cigarroa's "Framework for Advancing Excellence," a policy outline he unveiled in 2011 that calls for improving graduation rates, increasing philanthropic gifts to the universities expanding the use of technology and boosting research activities. The framework, which was widely lauded when it first came out, also called for incentive pay for executives.

Still, the business-oriented bent of the new compensation model drew some attention. "Not surprisingly, while these plans are more pervasive in industry … in higher education, they are still much more the exception than the rule," said Scott Kelley, the system's executive vice chancellor for business affairs.

Not everyone was thrilled at the proposal's passage. Raymond Cotton, a lawyer based in Washington, D.C., who specializes in higher education, called it "a misapplication of something that works and is used effectively in the for-profit world." While he said higher-education governing boards have successfully imported some ideas from the business world, and that they do have a duty to set the system's priorities, he questioned this particular strategy. "It almost sends the message to the presidents that we don't fully trust you to do your jobs, so we have to add these financial incentives along the way."

The Texas Coalition for Excellence in Higher Education, which formed in 2011 to combat proposed higher-education reforms that some viewed as misguided, issued a statement on the incentive plans cautioning that "great care should always be exercised when making significant changes." It continued, "We look forward to a more thorough understanding of the mechanics, motivations, and likely effects of the proposed incentive plans."

On Monday, Nelsen said that he had not discussed his plan for the incentives with any regents or his fellow university presidents, but he intended to put any bonus money he earned under the new system into an existing discretionary fund that funds special trips for students and brings speakers, plays and other events to campus. So far, he is the first president to announce the intention of redirecting such potential bonuses.

“What concerns me and part of the reason behind what I’m doing is that we have to work as a team,” Nelsen said. “It’s not me saying, 'You have to do this or else I don’t get my bonus.' We do this together.”

This notion resonated with Cotton, who said of a university president, "He's the captain of the team, absolutely, but he doesn't play every position. It takes the entire team to accomplish these various goals."

When laying out the plan during the regents’ meeting, Cigarroa was asked if there was any plan to extend the incentives to provosts or other administrators beyond the university presidents. Cigarroa left the door open to the possibility, saying he viewed having the incentives for the presidents and system executives as a good starting point.

At $300,000 per year, Nelsen is the lowest-paid president in the UT System. UT-Austin President Bill Powers, the highest-paid president of one of the system’s academic institutions, makes more than twice that. And both pale in comparison with the more than $1.4 million for University of Texas MD Anderson Cancer Center President Ronald DePinho.

Nelsen, who is expecting a 2.5 percent raise in his base pay next year that he also plans to donate to the university, said knowing his personal finances would not benefit from his university’s performance would not lessen the incentive to improve that the new plan seeks to create.

“I’m definitely not here for the money,” said Nelsen, a former administrator at the University of Texas at Dallas and Texas A&M University-Corpus Christi. “I’m here for the students in the Rio Grande Valley. I have major incentives to help them. If some money comes that I can even help more, I’ll certainly send it where it can help them more.”

Last year, Nelsen said, he turned down a raise because his faculty had not received merit raises in three years. “If I had been smarter," he said, "I would have taken the raise and given it back to the university then.”