What Must Jim Ryan Do to Earn a $100,000 Bonus?

James Ryan — what has the Board of Trustees incentivized him to accomplish? We don’t know, and the University of Virginia won’t say.

by James A. Bacon

When the University of Virginia hired Jim Ryan as president in 2018, the terms of his employment were spelled out in a contract. Anyone can obtain a copy of the document under the Freedom of Information Act, as Bacon’s Rebellion has done.  You can view it here.

Among other things, the six-year contract calls for paying Ryan a base salary of $750,000, provide him a $20,000-a-year car allowance, cover membership fees for two clubs, give him free housing (including the cost of housekeeping and utilities), grant him 22 vacation days a year, allow him to accrue Sabbatical leave at the rate of two months per year, and award him a performance bonus of up to $100,000 a year.

While the details of a university president’s compensation are interesting, the most important clause from a governance perspective covers the performance bonus. The contract says this about the bonus:

An evaluation of the President’s performance shall be conducted annually by the Rector after consulting with the Board of Visitors. The evaluation shall be based on the achievement of mutually agreed upon performance objectives determined by the Board of Visitors and Mr. Ryan.

For the purpose of evaluating the direction UVa is heading, the document spelling out the president’s marching orders is every bit as important as the university’s budget and strategic plan. But the University of Virginia declines to make that document available. Here is the response I received to my FOIA request:

Under FOIA, the University of Virginia shall withhold records when their release is prohibited by law, or the University may exercise its discretion to withhold records in accordance with a specific FOIA exemption. The University of Virginia has not disclosed records subject to the following exemptions: Personnel Information. Va. Code § 2.2-3705.1(1).

In recent posts I have highlighted the new book co-authored by James V. Koch, former president of Old Dominion University, “Runaway College Costs: How College Governing Boards Fail to Protect their Students.” In discussing how to improve governance of public universities in the United States, Koch stresses the importance of creating incentives that align the interests of university presidents with the goals and objectives of the boards.

When incentives are misaligned, or improperly implemented, campus performance falters. Boards need always ask, What behavior (virtuous or not) might we expect from an individual who is confronted with this set of incentives?

Boards should not assume that their president and key campus administrators will automatically default to the behavior trustees prefer. Reality may be very different. The principle-agent problems may arise between boards and presidents. This is one of the reasons why incentives must be chosen carefully and with an eye to the potential ways they can be gamed as well as the side effects they may induce.

For example, a board might create a monetary incentive for a president to boost a university’s enrollment. There are any number of strategies for accomplishing such a goal: spending more money on marketing, lowering admission standards, increasing acceptance rates, allocating funds to financial aid, or tweaking policies that the public would never think of. (In theory, universities could lower their tuition & fees, but that option never seems to be on the table.)

Citing an article in the Chronicle of Higher Education, Koch describes how in 2006 UVa terminated its early-decision admissions program for freshmen out of concern that relatively few lower-income students used it. Under early decision, high school applicants had to commit to UVa by December — before lower-income students knew how much financial aid they would receive. In June 2019, shortly after Ryan became president, the university announced that it was restoring its early-decision admissions program.

Was Ryan monetarily incentivized to make the change? Had he and the Board agreed to a goal to boost the exclusivity of the student body, perhaps in order to improve UVa’s rankings in Best College ratings? We have no way of knowing.

Due to the FOIA exclusion, members of the University of Virginia community are left in the dark about what the Board of Visitors and President Ryan regard as the most important goals for the university as well as the criteria by which Ryan’s performance will be evaluated. We have no way of knowing which of his actions might be rewarded monetarily.

I can understand the importance of keeping the evaluations themselves confidential. But there is no excuse for keeping the goals and objectives a state secret. This FOIA exclusion is detrimental to the public interest. The General Assembly needs to roll it back.

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39 responses to “What Must Jim Ryan Do to Earn a $100,000 Bonus?

  1. Why does the “personnel” reason apply? As you say, you are asking for what amount to the terms and conditions of this contract, which they have already given to you. I would write back to them further requesting that information and specifically asking that they exclude any personnel evaluations. Make your record for when you go to court and sue the bastards. I think they may be hoping you will just go away.

  2. Jim, file a request for a ruling with the Virginia Freedom of Information Advisory Council, a state agency. It is the office charged with helping to resolve disputes over Freedom of Information issues. Email: [email protected]

    “The FOIA Council answers questions from private citizens, state and local public officials, and the media about access to public records and meetings. Under Virginia law, the presumption is that all documents in the possession of public officials and all meetings of state and local public bodies are open to citizens of the Commonwealth. Of course, there are exceptions and these exceptions can lead to good faith disagreements between citizens or media and public officials.”

    “By issuing advisory opinions, whether oral or written, the FOIA Council hopes to resolve disputes by clarifying what the law requires and to guide future practices. The FOIA Council has no authority to mediate disagreements, but may be called upon as a resource to offer solutions to resolve FOIA disputes. As part of its statutory duties set forth at § 30-179 of the Code of Virginia, the Freedom of Information Advisory Council is charged with providing opinions about the application and interpretation of Virginia’s Freedom of Information Act (FOIA), conducting FOIA training seminars, and publishing educational materials.”

  3. I was looking at the Va Code. It does not look like it was tailored for a specific situtation – looks broader than that.

    Which makes me wonder about where it came from originally and what the original focus was.

    The Virginia Coalition for Open Government may also be worth consulting. They tend to be fairly independent and knowledageable about issues.

    https://www.opengovva.org/

    But it could also be that BR is becoming “known” at UVA and other targets of BR and they are no longer going to be quite as “accommodating” as they now sense “trouble” when they see it! 😉

  4. Less that 12% of his total possible cash compensation is variable? Maybe someone should ask Rector James B Murray what percentage of the CEOs in the portfolio of companies where his company (Court Square Ventures) invests has variable cash comp of less than 12%?

  5. If you send me a copy of their foia response, I’ll take a look at and give you my take.

  6. What is the practical effect of this provision:”allow him to accrue Sabbatical leave at the rate of two months per year?”

    Can Ryan convert this into cash at the end of the contract? So, for example, at end of 10 years on termination, has he earned 20 months of pay, as if a golden parachute?

    Or, if he stays on at UVA as an eminent professor at very high salary with little work, has he earned 20 month’s traveling the world on sabbatical at taxpayer expense, in addition to his eminent professor salary?

    On what basis does Ryan earn bonus? Knowing UVA’s value system and how it values money it received for its own “private” purposes, I would bet dimes to donuts that his bonus is based on:

    1/ total gross monetary figure of annual government and private research grants received, and

    2/ total amount of annual (charitable) giving received, and

    3/ Total amount of annual tuition collected.

    Here, please understand that most all research grants (government or private) are lost leaders, enriching those working at UVA, while losing money for the University, thus requiring internal subsidies, typically from undergraduate tuition, and non STEM Departments like humanities.

    In addition charitable giving often also requires addition funding from “internal” sources.

    Quite likely this explains the chronic refusal of FOIA requests.

    As to this contract provision:

    “An evaluation of the President’s performance shall be conducted annually by the Rector after consulting with the Board of Visitors. The evaluation shall be based on the achievement of mutually agreed upon performance objectives determined by the Board of Visitors and Mr. Ryan.”

    Here MUTUALLY AGREED are key words. This reflects the fact that the Board of Visitors is by and large a rubber stamp, NOT a direction or supervising, body. This was the intent made plain by various documents that could be seen on the internet as early as 2012 until scrubbed therefrom.

  7. Baconator with extra cheese

    I got it. He has to beat Dr Governor Coonman in a Moonwalk-off to win the $100k prize….

  8. I presume part of the $100,000 bonus achievements does not include allowing a 22 year old woke student to post crass, obscene signs on her Lawn room door. One would hope.

  9. James Wyatt Whitehead V

    Ryan is the highest paid employee of the Commonwealth of Virginia. Some professor at UVA named Magill is number 3 at 675 grand. It gives me great comfort to know that His Excellency, Ralph Northam, Governor of the Commonwealth of Virginia makes a paltry $175,000.
    https://www.bizjournals.com/washington/news/2019/10/04/public-paychecks-who-earns-the-most-on-virginias.html

  10. Dumb question – why are these University folks state employees when K-12 folks are not?

    • That’s the “State Support” in State Supported Higher Education.

    • For once I agree with you. That was a dumb question.

    • What percent of Higher Ed salaries are paid for by the state and not fees and tuition? Or are fees and tuition paid to the State then back as salaries?

      yep – lots of ignorance – but pretty sure not alone….

      • That is a difficult question to answer, due to the lack of transparency in higher ed funding. State general fund appropriations and revenue from tuition and fees are mixed in one money pot (same coding for expenditures). In the Appropriation Act, the tuition and fee revenue is shown as nongeneral fund (fund code 3000 series) and the general fund appropriation is identified as fund code 1000 in the computer code that backs up the budget. However, when the budget is implemented, the Dept. of Planning and Budget administratively transfers the general fund appropriation (fund code 1000) to the 3000 fund code series for expenditures. To sum up this description of budget arcana, it is not possible to determine what percentage of higher ed salaries is state general fund appropriation and how much comes from tuition and fees.

        To make it even harder, only a small portion of a university president’s compensation comes from state appropriations. Jim Bacon reports that the UVa president had a salary of $750,000, plus all the perks and a bonus. However, if you look in the Appropriations Act, you will discover that the salary of the UVa president is designated as $192,656. But, there is also this provision:

        “The board of visitors of each institution of higher education or the boards of directors for Southern Virginia Higher Education Center, Southwest Virginia Higher Education Center, and the New College Institute may annually supplement the salary of a president or director from private gifts, endowment funds, foundation funds, or income from endowments and gifts. Supplements paid from other than the cited sources prior to June 30, 1997, may continue to be paid. In approving a supplement, the board of visitors or board of directors should be guided by criteria which provide a reasonable limit on the total additional income of a president or director. The criteria should include a consideration of additional income from outside sources including, but not being limited to, service on boards of directors or other such services. The board of visitors or board of directors shall report approved supplements to the Department of Human Resource Management for retention in its records.”

        So, the salaries and other compensation of higher ed presidents are largely paid for out of private funds raised by the institutions

        • Thank you Dick. This is perfect example of how Virginia leaders using very clever lawyers, go to great extremes to hide from the public, their supposed masters, how the elites split up the pie collected from public monies of all sorts. This is one reason why the leaders of the state government, and their crony allies in related institutions are, by and large, as of today, illegitimate. And why this corrupt system and those who run it for their own personal benefit need to be confronted, and called to account.

        • Put more simply, tuition and state appropriations are not restricted funds and are typically lumped together to pay most salaries. A small number of salaries are paid from restricted funds like grants, and must be used for the specific purpose intended.

          An example of other restricted funding would be the Equipment Trust Fund, which as the name implies must be used for equipment.

          https://www.schev.edu/index/institutional/guidance-policies/finance-and-facilities/higher-education-equipment-trust-fund

    • The state constitution gives the responsibility of running K-12 to the localities.

      Article VIII, Section 7:

      The supervision of schools in each school division shall be vested in a school board, to be composed of members selected in the manner, for the term, possessing the qualifications, and to the number provided by law.

      Although state law has numerous provisions regarding teachers, they are employees of the local school board.

      Sec. 22.1-295, Code of Virginia: “The teachers in the public schools of a school division shall be employed and placed in appropriate schools by the school board upon recommendation of the division superintendent.”

  11. The Board of Visitors of the College of William and Mary recently awarded a $75,000 bonus to the president of William and Mary and a $50,000 bonus to the president of Richard Bland College (a two-year institution which also comes under the governance of the William and Mary BOV). (To be fair, President Rowe did request last summer that the Board reduce her salary by 15 percent, in light of the possible decrease in college revenues due to the pandemic.)

    Given the turmoil on the William and Mary campus this fall over the cutting of numerous non-money earning athletic programs and her obvious complicity in this plan, I was astonished at the board giving President Rowe such a hefty bonus. In an e-mail to the Board of Visitors, I asked for the justification of such a bonus. To my delightful surprise, I received a quick reply from the Rector. First of all, the bonus for the fiscal year ended in June 2020. Here is his explanation for the bonus:

    “In the BOV’s view, both presidents [W&M and Richard Bland] exceeded their established goals for the year. In Dr. Rowe’s case, among her accomplishments were the following: successfully completing the multi-year capital campaign; significant realignment of operations — onboarding the Provost and leading searches for 3 new deans, creating a new position of chief financial officer and restructuring financial operations, and reorganizing IT; developing additional admissions initiatives which allowed us to exceed our enrollment targets despite the pandemic; and, steering the university through the first months of the pandemic – bringing 2,000 classes online in less than 10 days and closing an anticipated $15M budget gap. W&M has made great strides under President Rowe’s leadership in just 2 short years. Dr. Sydow has similar accomplishments, though on a smaller scale, at RBC, which included completing the decennial accreditation process; restructuring all on campus services; and addressing financial and operational issues caused by the pandemic.”

    As I replied to the Rector, it seems to me they were just doing the jobs they were hired to do.

  12. So tuition and fees are paid to the State and then the State pays salaries for Higher ED?

    My thinking on K-12 was this. If the State pays money towards a teaching position – can we say that they do it for Higher Ed – as well as K-12 since the State does pay localities dollars for each enrolled student and those dollars go to pay salaries (along with local money).

    It appears to me that both Higher Ed and K-12 “comingle” funds from the State with funds from other sources.

    And because of that – the law allows citizens to know the salary of a state-funded employee?

    I know they are not exactly the same. Although both higher Ed and k-12 have pensions with the state, K-12 has local health insurance while (I think) higher ed has State Health sponsored health insurance.

    And on the “extra” money paid from non-state sources to Higher Ed – why is that alslo subject to disclosure if it is from other sources than taxpayer money?

    • Tuition and fees are paid directly to institutions of higher education. However, they must have an appropriation to spend that cash. The appropriation is what appears in the Appropriation Act. The schools also get state general fund appropriations. A general fund appropriation brings general fund cash with it.

      The Freedom of Information Act allows any member of the public to know the salary of any publicly funded (state or local) employee. Must to the consternation of many, the Richmond Times-Dispatch has compiled a database listing the salaries of all state employees, as well as the salaries of employees of local governments in the Richmond area. https://data.richmond.com/

      • Thanks much for the info. So even if the State only pays a portion of an employees salary – that means the public can see their total salary…

        But the state has no role at all in how much the salary is for higher ed or local ? It appears the State pays a certain amount and then other can be added to it from other non-state sources – that the state has no control over but the total amount received is still required to be disclosed.

        A little tricky. I’m sure each State has different ways… This is just how Virginia does it.

        • Salaries are set for teachers at the local level. For higher ed, the individual institutions set salaries. Many faculty members have outside sources of income, as well, such as research grants.

          • Reed Fawell 3rd

            “Many faculty members have outside sources of income, as well, such as research grants.”

            Almost all of which would be impossible without public monies subsiding the time, equipment, space, administration, inbuilt loses, and risks of failure. In fact, most university research now is highly inefficient, and increasing shoddy and non productive, and indeed it is now often make work.

      • That’s why I stopped getting the R-T-D several years ago.
        The public has the right to know the salary range & average for employees by agency & position, but nobody needs to know an individual’s salary by name.

        • A lot of us in state government agreed with you. Having that individual information out there led to internal resentments.

        • I tend to agree that it’s too invasive for a specific person but don’t blame the RTD, blame the law.

          Also – if you take away this specific info, it’s not going to make the critics happy as they use that info to make their complaints.

          One of the things that has changed is that critics not go after specific individuals. Used to be , critics would go after the agency or institution or policy or law but now they target individuals.

    • The onion is there to be peeled. Notice that the data shows salary from all sources.

      • Example – “Non-state salary: $557,344.”

        What is it paid for? Who pays it? And Why? UVA is a state institution. State should be able to answer these questions, and explain and justify them. And require Board of Visitors to do so.

        The same hold true with this earlier example given above.

        “Many faculty members have outside sources of income, as well, such as research grants.”

        Almost all of which would be impossible without public monies subsiding the time, equipment, space, administration, inbuilt loses, and risks of failure. In fact, most university research now is highly inefficient, and increasing shoddy and non productive, and indeed it is now often make work.

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