A University of California Regents committee recommended that the UC prioritize raising university employees’ salaries to competitive levels, but held off on a proposal to allow private donors to fund the salaries of administrators and executives.

The Committee on Finance heard a presentation Thursday by Bob Miller of Mercer Human Resource Consulting concerning UC salaries, which he said are currently 15 percent below the average market level. The committee then passed two recommendations for salary increases onto the Board of Regents, which will make a final vote at its next scheduled meeting in November.

UC President Richard Dynes said he thinks the UC needs to create a competitive wage for employees if it wishes to maintain its reputation for top-notch research. Without necessary funding in areas such as employee salaries, Dynes said, the University may suffer the same fate as one of his previous employers, AT&T Bell Laboratories, which saw a drop in the quality of its research as it progressively lost funding.

“Bell Laboratories was a research institution,” Dynes said. “The key word here being ‘was.’ … I would have never guessed that would happen in my lifetime.”

The first proposal the committee passed suggested raising the salaries of all employees to the market level over a ten-year period, beginning in 2006. The increase in pay would cost an estimated $2.5 billion. In the second proposal, the committee recommended that the UC clarify the procedure for compensating senior administrators and executives for their work, as the current process is ineffective. Under the recommendation, an outside consultant would suggest both the salaries for senior leaders and any potential raises.

Although increasing salaries was a priority, the committee did not list concrete solutions for finding the necessary funding beyond additional state support. However, the third proposal – tabled by committee members – stated that salaried positions in excess of $350,000 could be funded in part by private donors. The positions that would be affected by such a change include the UC president, several of the chancellors and the deans of business-management, engineering and law schools.

Under the proposal, private donors could designate which position’s salary would be augmented by their funds but could not specify the total amount that the position would receive. Also, University officials could not solicit funds for their own salaries.

Regent Judith Hopkinson said utilizing private donations for University salaries is common among other university systems. However, several other regents said they wanted to withhold voting on the matter until further discussion and analysis could take place.

Regent George Marcus said he would like to see a report on how many top UC employees left the University and their reasons for doing so before he makes a decision about outside funding sources. If senior administrators left for financial reasons, such information might determine whether salary increases for the positions would be beneficial.