Dan Arvizu, the new chancellor of New Mexico State University, can earn a performance-based bonus of up to $150,000 in his first year, and up to $250,000 a year after that, under his five-year contract with NMSU, which gives him a $500,000 annual salary.
John Floros, the new president, could receive a performance-based boost of $180,000 a year, after the first year of his five-year deal, which pays $450,000 a year.
Details of the two men’s contracts show Arvizu can fetch up to 30 percent of his base salary the first year, with the ability to increase the bonus to 50 percent in subsequent years. Floros’ performance based bonus ranges from 25 to 40 percent after the first year on the job.
The contracts include the “incentive compensation” for the leadership team based on growing enrollment, improving retention, graduation and placement rates for students as well as increasing research awards and grants. The incentives will “be funded solely from a portion of the additional net revenue generated” by meeting those performance goals, according to the contracts.
The contracts for both Floros and Arvizu also include the ability of the regents “to offer and enter into separate retention compensation agreements” with the goal of long-term stability for NMSU’s leadership.
That open-ended provision is a concern, Faculty Senate Chairwoman Becky Corran said. “The idea is we don’t want NMSU to have a revolving door as we have before, but at the same time, what’s the upward limit to our willingness to pay for executives to stay?”
Although the contracts have incentives to keep the leadership, the regents are not offering buyouts if the chancellor or president is fired for “just cause, to include poor performance.”
“It doesn’t seem like there’s a golden parachute in it. That’s comforting, because we have seen that in the past at NMSU,” Corran said.
“These agreements are a win-win,” according to a joint statement from NMSU Board of Regents Chairwoman Debra Hicks and Vice Chairwoman Kari Mitchell outlining key points in the contracts.
“Taxpayers win when we grow the university back to the operational level they have paid for, and more New Mexicans will get a higher level of education.”
According to the joint statement from Hicks and Mitchell, “if the minimum level of new revenue requirements established for the year is not achieved, then no bonuses will be paid.”
Corran is encouraged by the leadership team working to increase enrollment and being rewarded for that, but questions how the additional tuition will be used for students.
“What kind of classes are we offering them? Are there enough faculty to teach them? Are there enough advisers to help them get enrolled?” Corran asked.
Hicks and Mitchell said in their joint statement, “We believe this investment is critical.”
In the past six years NMSU lost $22 million in annual revenue because of a 22 percent drop in enrollment.
“That decline is 2.5 times greater than the decline at the University of New Mexico. NMSU has also lost $32 million in research funding and 800 jobs in that time.”
The University of New Mexico’s new president, Garnett Stokes, has a salary of $400,000.