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Regents could boost NU president's total compensation to $1.5 million next year

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The University of Nebraska Board of Regents will consider giving the system’s top administrator a contract extension when it meets next week, and with it, a pay increase and chance at a lucrative bonus.

Incentivizing President Ted Carter to stay at NU through 2027, giving him a 3% increase in his base pay, and providing a healthy deferred compensation package should be seen as a vote of confidence in his leadership, Regent Bob Phares said.

Ted Carter, 2.16

University of Nebraska President Ted Carter speaks before the Appropriations Committee in February 2021 at the Capitol.

“Ted Carter has been the right leader at the right time for the University of Nebraska system and our state as a whole,” said Phares, of North Platte, ahead of the Aug. 11 meeting at Varner Hall. “We want to keep him as long as we can.”

All told, Carter’s total compensation could surpass $1.5 million in 2023.

The details of Carter’s restructured contract include:

* Carter was hired by NU in 2019 and given a 5-year contract that expires Dec. 31, 2024, but regents want to extend his time leading the university system with campuses in Lincoln, Omaha and Kearney until Dec. 31, 2027.

* A 3% increase to Carter’s base pay – the same merit increase provided to all NU employees this year through an agreement with the Legislature and Gov. Pete Ricketts – would push his annual salary from $934,600 to $962,638.

The increase in pay comes from NU’s state-aided budget, which includes appropriations from the Legislature and tuition revenue.

* The board will also consider awarding Carter a performance bonus for his work during the 2021-22 academic year.

Under the terms of his contract, Carter is eligible to receive an amount equal to 15% of his salary if he hits a series of metrics determined by the board.

Last year, regents said Carter met 95% of the benchmarks set for him and voted to give him a performance bonus of $140,190.

This year, however, with first- to second-year retention numbers falling for NU students across the system, Carter met just 89% of the performance metrics set for him.

The board will consider awarding him a bonus equal to three-quarters of the full amount he is eligible to receive, or roughly $105,000.

* Under the new contract up for consideration, regents could also provide Carter a second deferred compensation package – money he is eligible to receive each year he stays at NU.

Carter already has a deferred compensation package -- funded by private donors -- equal to 11.5% of his base salary.

Regents could award him a second privately funded package that would put $340,000 into an investment account beginning in 2023 that he would be able to draw from beginning in January 2024.

Both deferred compensation packages would be managed by the University of Nebraska Foundation.

James Finkelstein, a professor emeritus of public policy at George Mason University in Virginia who researches the contracts of university presidents, said deferred compensation packages have become increasingly more common across higher education.

In the corporate world, deferred compensation packages are designed to keep high-performing executives in the company by promising them a payout after a certain number of years – something often referred to as “golden handcuffs,” according to Finkelstein.

While a deferred compensation package can be used to keep a leader in higher education at an institution – the tenure of chancellors and presidents has shortened in recent years – Finkelstein said most top administrators do not move into other leadership positions.

“What (a deferred compensation package) really accomplishes in higher education is that the public doesn’t know the true value of a president’s compensation until the compensation is received,” he said, often deferring public scrutiny until the compensation is paid years later.

Still, deferred compensation packages are becoming the norm, particularly among universities in the Big Ten Conference.

Penn State University’s board will pay its new president, Neeli Bendapudi, a base salary of $950,000 with $350,000 in supplemental retirement contributions.

And the University of Minnesota Board of Regents approved a deal with President Joan Gabel that increases her supplemental retirement contributions of $250,000 with $10,000 annual increments.

Gabel's total compensation will reach $1.2 million this year.

Reach the writer at 402-473-7120 or cdunker@journalstar.com.

On Twitter @ChrisDunkerLJS

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