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UC Regents discuss operating budget, approve salary increases at September meeting

The UC Board of Regents meets at UCLA on Sept. 19. The Board discussed the University’s budget, employee salaries and investments during its bimonthly meeting. (Sam Mulick/Daily Bruin senior staff)

By Saya Mueller

Sept. 28, 2024 7:58 p.m.

Correction: The original version of this article incorrectly stated that the UC Board of Regents met from Sept. 18 to 19 for their monthly meeting. In fact, it was for their bimonthly meeting. The original version of this article also incorrectly stated that the UC currently has a $48.6 billion deficit. In fact, it is the state of California.

This post was updated Oct. 1 at 10:48 a.m.

Three UC Board of Regents committees discussed the University’s 2025-2026 operating budget, salary increases for top-level University employees and the past year’s fiscal performance at its September meeting.

The regents met at UCLA from Sept. 18 to 19 for their bimonthly meeting. The finance and capital strategies, governance and investments committees covered action items relating to the allocation of University funds.

The finance and capital strategies committee conducted a preliminary discussion of the University’s 2025-2026 operating budget. The budget plan is centered around continuing core operations, broadening student access and addressing capital needs, according to the item.

Nathan Brostrom, executive vice president and chief financial officer of the UC Office of the President, said the preliminary plans are part of a multiyear approach that addresses current budget shortfalls. The state of California currently has a $48.6 billion deficit for 2024-2025 and a projected deficit of $28.4 billion next year.

“UC and CSU are two of the only state entities to see an increase in funding this fiscal year,” Brostrom said. “However, we also must move forward recognizing that the state has signaled its intent to reduce the University’s ongoing support next year by over $270 million.”

A primary objective of the budget plan is to expand resident student access, according to the item.

State funding will allow increased enrollment for 209,535 full-time-equivalent California residents by 2025-2026, according to the item. This can be done through the University’s base budget increase of 5% that year and a reduction in nonresident undergraduates at the UC Berkeley, UCLA and UC San Diego campuses, according to the item.

The governance committee convened to discuss a number of action items, including the appointment and compensation of the vice president of UC National Laboratories, salary adjustments and approval for the investment award allocation to Jagdeep Singh Bachher – the chief investment officer – under the Office of the Chief Investment Officer Annual Incentive Plan.

The meeting started with a unanimous approval for June Yu’s appointment and base salary as vice president of the UC National Laboratories.

“Her extensive leadership experience and keen understanding of the importance of the National Labs and the University’s partnership with the federal government will be a tremendous asset to the University of California,” said UC President Michael Drake.

Yu was appointed as the interim vice president on Feb. 1, which moved her to a full-time position with an annual base salary of $456,500, 5.4% above the previous incumbent’s salary upon retirement.

The regents also approved 2024-2025 general salary increases of 4.2% for level one senior management group members – including the University’s C-suite executives and vice presidents. Increases for UC locations under the 2024-2025 salary programs are partially or fully state funded and are in accordance with 2024-2025 systemwide guidelines and location-specific guidelines, according to the item.

The total amount for the increases for the level one senior management group members adds up to $886,672, which the regents unanimously approved.

The regents then approved salary increases totaling $1,317,440 for seven systemwide chancellors – not including UCLA or UC Berkeley, which have newly appointed Chancellors.

The increases range from 16.6% to 33.7% across the UC campuses, according to the item. The increases were initiated as base salaries for UC chancellors and trail by 20% compared to other public Association of American Universities member institutions – and bring the average market alignment of the chancellors from the 32nd to 48th market percentile, according to the item.

The regents also approved salary increases for the UC President, secretary and chief of staff.

Regent John Pérez – who abstained from the vote – said he was concerned that the increases appeared to rely solely on market reference zones for higher-level employees. He added that solely MRZ-based adjustments are often only used for higher-level executives.

“I am very uncomfortable with the overreliance on MRZs. They should be a factor, not the factor,” Pérez said.

The regents also discussed and unanimously approved $357,203 in incentive compensation for Bachher, per the Office of the Chief Investment Officer Annual Incentive Plan.

The investments committee then reviewed the 2023-2024 fiscal year performance report for UC retirement, endowment and working capital assets.

Bachher said the University’s total investment assets have doubled since 2014 and spoke about the total annual growth in the University’s investment portfolios.

In regard to global markets, 72% of investments are concentrated in the United States, 12% is invested in Europe and 11% goes to Asia, Bachher said. His team is looking to pull three to five percent of European investments to concentrate in the United States over the next five years because of the familiarity of domestic investments, Bachher said.

“I find it (Europe) to be anemic, boring, convoluted, dysfunctional, decentralized and just not exciting – that’s a humble opinion on Europe,” Bachher said. “I find Asia is fabulous, but it is just too complicated.”

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Saya Mueller
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