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Next UNM President Could Earn Less

ALBUQUERQUE, N.M. — When Bill Gordon became University of New Mexico president in 1998, he was given a $190,000 salary, access to a university car and the option to live rent-free in the on-campus presidential house.

By the time David Schmidly was hired less than 10 years later, total compensation for the UNM president had more than tripled.

Schmidly, who took over in 2007, negotiated a $587,000 annual package with UNM, which included a $42,000 allowance for a personal car and a $45,000 payment toward his home in Placitas.

But several regents say the trend of ever-higher presidential packages is about to come to an end. As UNM prepares to hire its next president on Wednesday, officials say the salary offered will not exceed Schmidly’s and that some benefits – like a housing allowance – could be eliminated.

“In the last 10 (to) 15 years, those things have escalated, and a lot of them unreasonably. I believe that this next contract will be considerably less than Dr. Schmidly got,” Regent Jamie Koch said.

UNM’s longest-serving regents say the dramatic spike in presidential compensation, driven by new allowances for housing, cars and other nonsalary benefits, was necessary to keep up with the nationwide “market rate” for university presidents.

“The cost of hiring these individuals, I think, has escalated too much. I think it’s really what the market has said it should be, but I’m not agreeing with what the market says it should be,” said Koch, who approved Schmidly’s $587,000 contract and the $370,600 deal given to Schmidly’s predecessor, Louis Caldera, in 2003. Caldera was pushed out of office three years later with a contract buyout exceeding $700,000.

Adjusted for inflation, Gordon’s total pay in 1998 would have equaled about $242,000 in 2007, less than half of what UNM determined its president was worth when Schmidly was hired. Schmidly is stepping down at the end of this school year when his contract expires.

While presidential compensation at UNM increased nearly $400,000 in the nine-year period between 1998 and 2007, the 1990s saw dramatically slower growth. Compensation increased by $67,000 between Richard Peck’s start in 1990 and F. Chris Garcia’s reign in 2002 – about $10,000 more than the rate of inflation during that period.

Search firms

But after Garcia, UNM adopted a new approach to recruiting presidents. It started hiring third-party recruiters to identify the best candidates, with UNM paying those firms an amount equal to a percentage of the new president’s pay.

It was a search firm that led to Caldera’s selection in 2003, with compensation that was $152,000 more than his predecessor. The package was pumped up by several new benefits, including monthly allowances for Caldera to use his own car rather than one provided by UNM and to offset the cost of living in his own off-campus home. He also was eligible for a new $25,000 yearly performance bonus.

When Schmidly was recruited by a search firm four years later, the new perks remained in the contract but were all increased dramatically, according to university documents.

“I think what happened is the economy was booming and everything,” Koch said. “The university hasn’t lost control of it, but to attract the proper candidate, there’s a cost to it.”

The search firm earned a $195,500 fee for recruiting Schmidly.

Regent President Jack Fortner, who has been on the board since 1999, said he doesn’t believe search firms have played a role in the dramatic increase in UNM’s presidential pay.

“Looking back, I think you look at a combination of where’s the person coming from, what is he coming into. I just think you take a number of factors into account,” Fortner said.

Schmidly, for example, was a sitting president at Oklahoma State University when UNM recruited him. None of the presidential finalists this year is currently in a position higher than provost, often seen as the No. 2 job in university administration.

Alberto Pimentel, executive of UNM’s new presidential search firm, did not respond to requests for comment.

For this year’s search, regents agreed to pay Pimentel’s California-based search firm 30 percent of the next president’s first-year base salary. They budgeted $130,000 for that fee, a rate that would equate to a base salary of about $430,000, $60,000 more than Schmidly initially earned.

Regents, however, said that number was only an estimate, and the next president will not be paid more than Schmidly.

Smaller package

“I would hope that our next president’s total package would be less, and I don’t know if it will be $100,000 per year less, but it’s going to be significantly less under the circumstances,” Fortner said. “The (national) economy is different, the state of New Mexico economy is different. University appropriations are different. I just think that’s something the regents and a new president, whoever it is, have to take into account.”

To trim back total compensation, regents say they likely will start by axing a housing allowance and requiring the next president to live in the university-owned home, saving UNM the $44,000 a year it pays Schmidly for his off-campus home.

“The situation in regards to (Schmidly’s) housing stuff, I do believe it was too much. I think this next contract, I am hoping, will require the individual to live on campus, so that would (remove) the housing allowance,” Koch said.

Fortner agreed, saying the president should have a better connection to campus by living there, a move that also will start to prune the total compensation package.

“I think the housing allowances need to be a thing of the past,” he said.
— This article appeared on page A1 of the Albuquerque Journal