Tuesday, September 06, 2011

High Salary Stories Hound State Stem Cell Agency

In most states, it is probably illegal nowadays to tie a can to a dog's tail. But that doesn't much help the $3 billion California stem cell agency.

 It has a can on its tail, and nobody seems likely to come to its rescue.

 The nagging irritation trailing CIRM comes in the form of repeated news stories about salaries at its executive levels. Just a few weeks ago, a round of pieces surfaced concerning pay at CIRM. The touchy subject popped up again this past weekend.

 The Orange County Register carried a page-one story on Sunday with the headline "'Special fund' salaries fall off the radar." The fourth paragraph of the piece by Ramon Solis said,
"Alan Trounson, president of the California Institute for Regenerative Medicine, the state stem-cell research agency, is the highest-paid nonacademic employee in the state, making an annualized salary of $490,008 as of June 2011. His salary is paid by bond funds."
Solis continued,
"The regenerative medicine institute is a prime example of a well-funded state agency operating outside of the constraints of the General Fund. 
"On average, institute employees made $103,435.08 in 2010, according to 2010 salary data from the State Controller’s Office – the most of any department in state government. 
"In addition to employing the state’s highest-salaried nonacademic employee, Trounson, the institute also employees the state’s highest-paid part-time employee, Art Torres, the former chairman of the state Democratic Party, who made $230,000 last year as the institute’s co-vice chairman. Institute staff members, however, say Torres handles the responsibilities of two people. Staff maintain that the institute would have to spend more money on two separate employees if not for Torres. 
"'Given the fact CIRM is a research funding institution, it is critical that CIRM have the ability to competitively recruit and retain employees who have the skills and backgrounds necessary for these positions,' said Melissa King, the institute’s executive director of the governing board, when asked about Torres’ and Trounson’s salaries. 
"The institute has one of the smallest payrolls in state government, with just 46 employees who account for around 1 percent of the agency’s $3 billion budget, King said. Unlike other agencies in state government, the institute’s payroll and administrative overhead is capped at 6 percent of its budget, to ensure that most of its money goes to stem-cell research. The institute also has an added protection in that an independent committee composed of leaders in the biotech and medical industry as well as patient advocates set the salaries of its employees."
It could be said that CIRM fared better in the Orange County Register story than many of the others in the past about its salaries. The piece noted that CIRM has a tight operational budget. The article also cited as "an added protection" an "independent committee" that sets CIRM salaries. The committee is the CIRM board of directors. The story also did not report that, with interest on the borrowed funds for Trounson's salary, its actual cost is around $1 million.

 Nonetheless, the issue of high salaries will dog the agency as long as they exist. CIRM pay is also likely to surface in a much more visible way in the event that the agency goes to the voters for another multibillion bond issue in a few years.

 The agency's new chairman, Jonathan Thomas, has said that the agency is in a communications war. As part of its arsenal, it needs to devise strong counter measures to deflect what will be a continuing assault tied to its high salaries.


  1. Jim Fossett9:46 AM

    Sigh--here you go again. The Soltis piece is better than the average in that it notes that many of the highest salaries actually aren't being paid by taxpayers. This makes it a well done cheap shot, but a cheap shot nonetheless. Couldn't he find anybody to comment on this situation besides a couple of right wing foundations? As a matter of arithmetic, CIRM's average pay is heavily influenced by the large amounts paid to Thomas and Torres. My guess is that if you took those out, CIRM's average pay would be significantly lower--not everybody at CIRM makes salaries at that level. My memory of the Little Hoover Commission report is that CIRM, if anything, is understaffed and relatively lean administratively. A comparison to a body like NIH would be instructive--while Thomas makes more than Francis Collins, the folks who actually run the review processes and hand out the money may be both more numerous and better paid than the worker bees at CIRM.

  2. Re the comment by Jim Fossett on the continuing saga of media coverage of high salaries at CIRM, another item surfaced today. This one on American Spectator by a former Reagan staffer. The point about all these stories -- fair, inaccurate or whatever they may be -- is that CIRM is going to have to learn to deal with them in a fashion that minimizes their impact. Here is a link to the Spectator story. http://spectator.org/archives/2011/09/08/when-gold-turns-to-dross

  3. Anonymous9:32 AM

    The salaries get everyone angry, including the scientists who are doing the research that will ultimately save or sink CIRM.

    If I were Alan, I would say, gosh, I see that this is a problem, and I am voluntarily reducing my salary to match the maximum salary that CIRM pays its grantees: $200,000. This is still a bit more than the highest NIH salary, but reasonable for a senior scientist.

    Alan, you can live on 200K. We do.

  4. Regarding the $200,000 salary limit on CIRM grant recipients mentioned in an anonymous comment this morning, we asked CIRM to clarify the matter.

    James Harrison, outside counsel to the board, responded:
    "The actual salary is set, and paid for, by the institution and is not regulated by CIRM. CIRM's rules limit the amount of CIRM funds that the institution can use to cover those costs.

    Investigator compensation chargeable to a CIRM grant is capped at that individual's percent effort on the grant multiplied by that person's salary. If the salary is more than $207,000, the amount above that is not included in the calculation. For example, if an investigator devotes 10% effort to a CIRM award, with a base salary of $100,000 per year, CIRM's salary support would be limited to $10,000 per year. If the base salary were $300,000, CIRM's salary support would be limited to $20,700 per year (i.e., 10% of $207,000).

    "My understanding is that NIH has the same rule."

    Here is the text of CIRM's policy.

    "Salaries for PIs and PDs and Key Personnel shall not exceed an annual rate of $207,000. CIRM will adjust this limitation biennially beginning July 1,2010 as follows: (a) the base dollar amount of $207,000 shall be increased or
    decreased by the cumulative percentage change in the annual average California Consumer Price Index for All Urban Consumers from 2008 to the end of the calendar year immediately preceding the year in which the adjustment will take effect and (b) the dollar amount obtained by Application of the calculation set forth in subdivision (a) shall be rounded to the nearest $1,000. The resulting figure shall be the adjusted maximum annual salary in effect until June 30 of the next even-numbered year. Biennial adjustments will be posted at www.cirm.ca.gov."

    The text above can be found on page 27 at http://www.cirm.ca.gov/files/Regulations/NPGAP_042809b.pdf


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