Friday, July 15, 2011

The Governor on CIRM Chair's $400,000 Salary: The Board Did It

This week's hooha over high government salaries, including a couple at the California stem cell agency, has found Gov. Jerry Brown delicately ducking any role in the $400,000 part-time salary for the new chairman of CIRM.

The flap has implications for the future of the California stem cell agency. It has triggered public comments ranging from extreme indignation to a cynical, shoulder-shrugging "what's new" reaction. It also found the governor deploring a $400,000 salary at one California state institution but declining to do so in the case of CIRM. Instead he basically said the CIRM board has to take the heat for the $400,000 salary for its new chairman, Jonathan Thomas, who was nominated by Brown for the job.

On July 7, the Los Angeles Times editorialized that the salary could doom the $3 billion stem cell agency to extinction. It reasoned that the compensation matter is almost certain to be a significant and negative issue in an election on the proposed $3 billion to $5 billion bond measure that CIRM needs to continue its operations beyond 2017 or so.

The governor amplified the salary controversy earlier this week when he opposed the $400,000 deal for the new president of San Diego State University, which has 35,000 students and a budget of close to $800 million.

Brown said the executive would be paid more than twice the salary of the chief justice of the United State Supreme Court. Brown said,
"At a time when the state is closing its courts, laying off public school teachers and shutting senior centers, it is not right to be raising the salaries of leaders who--of necessity--must demand sacrifice from everyone else."
Despite the opposition from Brown and Lt. Gov. Gavin Newsom the salary was approved by the state university board of trustees. Newsom also nominated Thomas for his $400,000 job.

The California Stem Cell Report queried both the Brown's and Newsom's offices via email about how they could oppose the salary for the San Diego State president but not be opposed to the same salary for part-time work (80 percent) at the stem cell agency, which has only about 50 employees and an operational budget of $18 million.

Elizabeth Ashford, a spokeswoman for Brown, replied via email,
"The governor has not endorsed this salary. The (CIRM) board approved the hire, and the board set the salary. These actions were independent of our office. As we've said many times on record, the governor is troubled by high public service salaries - in this case, however, it is in the board's hands."
As a courtesy, we then emailed Ashford,
"Just so you are not surprised, I expect to say something along the lines of that it was widely known that Thomas wanted $400,000 for part-time work and that if the governor didn't know that, he should have. I probably will also say something about how the $400,000 salary for the president of San Diego State was also in the hands of a body independent of the governor's office....As to why there was a difference in the reaction from the governor, I will probably suggest that it was a case of juggling a lot of balls and losing sight of one. Plus Thomas was the governor's nominee while the president of San Diego State was not."
Ashford responded,
"This is not an accurate or factual representation of the governor's relationship to the board or this decision. He does not set or influence salaries for the board, as I stated previously. Your hypothesis is just that - a theory."
The lieutenant governor's spokesman, Francisco Castillo, also responded and ducked the issue of whether the Newsom opposed the $400,000 CIRM salary. Castillo said,
"These institutions have an obligation to live within their means and, when they can't, they shouldn't be asking California's middle class to bear the cost. Unlike the stem cell institute, which the lieutenant governor is proud to have based in San Francisco, our CSU (California State University) has suffered devastating budget cuts offset by record tuition hikes and any salary increases need to be carefully scrutinized in that context."
Controversy over compensation is not peculiar to government. Some segments of the public are not pleased by the 35 percent increase in the median pay of CEOs of Standard and Poor 500 companies in 2010. That compares to a 1.6 percent decline in average hourly earnings of U.S. workers over the last 12 months ending in May. It all adds up to a public opinion environment unfavorable to enterprises perceived as greedy i.e. rewarding executives with excessively high salaries. And that translates to a critical and major minus for CIRM's hopes of winning voter approval of another bond measure.

As for the governor's inconsistencies, here is a personal footnote from Brown's first term in office. In 1974, shortly after Brown was first elected governor, I was the press aide for the Brown transition team. The tiny group had moved into offices in the old State Capitol, which had been declared an earthquake hazard during a campaign to approve tens of millions of dollars for its reconstruction.

A year or so earlier, Brown, then secretary of state, had occupied offices in the Capitol. But when the hazard notice was publicized, he piggybacked on the reconstruction campaign to move out to private offices nearby, declaring that he would not endanger his employees by compelling them to work in an unsafe building. Virtually all of the other occupants of the Capitol remained in their offices.

A UPI reporter recalled the news release in which Brown announced his flight from the Capitol and wrote a somewhat embarrassing story. Brown was privately philosophical about the story. "That's the price of excessive rhetoric," he said.

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