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ADMINISTRATIVE POLICY
Home : Human Resources : Hiring

Senior Leader Compensation and Separation

Effective Date: October 2012
Last Update: October 2012
Responsible University Officer:
  • University President
Policy Owner:
  • University President
  • Vice President for Human Resources
Policy Contact:

Printed on: . Please go to http://policy.umn.edu for the most current version of the Policy or related document.

POLICY STATEMENT

This policy covers the compensation and separation for senior leaders, as defined by Board of Regents Policy: Reservation and Delegations of Authority.

COMPENSATION

The president will determine the compensation for senior leadership positions, after taking into consideration:

  • appropriate market comparisons for the specific senior leader position;
  • all aspects of a total compensation plan (base salary, benefits, retirement, and other best-practice design concepts from other higher education institutions, public and private, and corporations);
  • performance markers and associated incentives; and
  • equity among the senior leaders with portfolios of similar scope, complexity, risk and responsibility.

All annual salary increases for senior leaders will be awarded based on meritorious performance.

All salary determinations at the University must be non-discriminatory. Initial salary offers, periodic increases, and retention offers may not be based on considerations related to the race, color, creed, religion, national origin, gender, age, marital status, disability, public assistance status, veteran status, sexual orientation, gender identity, or gender expression of the person affected.

MARKET COMPARISONS

The University will ensure the completion of market comparisons of total compensation with peer groups for each senior leader position at the time of hire, and thereafter on a regular basis. This benchmark is to assure that senior leadership compensation is appropriate and competitive, and to identify plan design alternatives and emerging trends in senior leader compensation.

EMPLOYMENT AGREEMENTS

All newly hired senior leaders will have a standard, written employment agreement. The president will submit initial employment agreements for senior leadership positions to the Board of Regents for approval, after review by the General Counsel and the Vice President for Human Resources. The submission to the Board of Regents will include the appointment term, all compensation elements, and any unique responsibilities or other features of the appointment.

SEPARATION FROM A SENIOR LEADERSHIP POSITION

Senior leaders who conclude an administrative appointment: a) may receive a severance benefit if separating from the University; or b) may request a sabbatical or single semester leave, if returning to a faculty position.

The president may alter the separation provisions below or negotiate additional terms, only with advance approval of the Chair and Vice Chair of the Board of Regents.

  1. Severance

    The severance benefit for senior leaders, if granted, is as follows:

    • one month of pay for one year of service or less in a senior leadership position
    • three months of pay for greater than one year of service, but less than five years of service, in a senior leadership position
    • six months of pay for five years of service or greater in a senior leadership position

    Every severance agreement under this policy must be in writing, require a release of claims by the individual, and is subject to review by the Offices of the General Counsel and Human Resources.

  2. Return to Faculty

    Senior leaders who simultaneously hold tenured faculty appointments at the University may return to their faculty position following their administrative service.

    The president, in consultation with the appropriate dean, may grant individuals returning to the faculty a sabbatical or single semester leave.

    The leave, if granted, will be at the faculty salary rate. If the individual separates from the University during the leave period, the individual must repay the amount of the salary, retirement contributions, and all other fringe benefits received during the leave.

    Individuals granted a sabbatical or single semester leave will not be eligible for a severance benefit.

REASON FOR POLICY

To implement Board of Regents Policy: Employee Compensation and Recognition. The Board of Regents endorses a total compensation strategy for the University’s senior leadership that is competitive, market-driven, performance-based, equitable, and transparent. This is necessary for the University to attract, retain, motivate, and reward world-class talent to effectively lead the institution in fulfilling its academic, research, and public outreach missions.

PROCEDURES

There are no procedures associated with this policy.

FORMS/INSTRUCTIONS

There are no forms associated with this policy.

APPENDICES

  • Benchmarking Guidelines (under development)

FREQUENTLY ASKED QUESTIONS

There are no FAQs associated with this policy.

ADDITIONAL CONTACTS

Subject
Contact
Phone
Fax/Email
Primary Contact(s)
612-625-2016

DEFINITIONS

Benchmark
A standard or point of reference against which total compensation may be compared or assessed.
Compensation
The base salary and additional payments to employees, such as augmentations, lump sum payments, and incentives.
Senior Leaders
Individuals specified as senior leaders in Board of Regents Policy: Reservation and Delegation of Authority. This includes senior vice presidents, chancellors, vice presidents, provost, general counsel, University librarian, the director of audits, deans (on all campuses), athletic director (Twin Cities), and others as directed by the Board to include the Executive Director and Corporate Secretary, Board of Regents, and the Chief of Staff (Office of the President).
Separation
Either conclusion of a senior leadership position to return to another or prior position at the University, or departure from the University after concluding a senior leadership position.
Severance
A sum of money paid to an employee upon termination.

RESPONSIBILITIES

President
Submits the employment agreement for senior leadership positions to the Board of Regents for approval. Grants, in consultation with the appropriate dean, single semester or sabbatical leaves to senior leaders returning to a faculty position. Approves any severance benefit for senior leaders separating from the University.
Office of the General Counsel (OGC)
Reviews employment agreements for senior leadership positions prior to the President forwarding them to the Board of Regents.
Reviews severance agreements for senior leaders.
Board of Regents
Approves appointments to senior leadership positions. At the request of the President, the Chair and Vice Chair approve all separation provisions that differ from this policy.
Vice President, Human Resources
Conducts market comparisons of peer groups. Reviews severance agreements for senior leaders.

RELATED INFORMATION

HISTORY

Effective
October 2012

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The University of Minnesota is an equal opportunity educator and employer.
Last modified on November 12, 2012