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.

Implications of Perceptions of Waste and the Stem Cell Agency

The headline in The Sacramento Bee this morning read "Why raise taxes when officials squander our money?"

And prominently mentioned was the California stem cell research agency and the $400,000 salary of its new chairman.

The opinion piece was written by Dan Walters, The Bee's longtime time political columnist, whose articles are reprinted in many other newspapers around the state.

Walters was discussing efforts to raise taxes to help solve the state's ongoing budget crisis. He wrote,

"It's a valid debate to have, but voters' instinctive reluctance to pay more taxes is bolstered by a steady stream of incidents implying that the taxes they already pay are often wasted.

"Take, for example, what occurred as California State University system trustees raised student fees due to budget cuts. Simultaneously, they approved a $400,000 salary for the new president of San Diego State University, $100,000 higher than his predecessor.

"Brown publicly castigated the trustees.  '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,'  Brown said.

"But Brown didn't utter a peep when the board that oversees a $3 billion stem cell research bond issue decided to pay its new Brown-appointed chairman – ironically – $400,000.

"So much for demanding sacrifice."

Walters continued,

"We can't solve our basic fiscal problems by just rooting out waste. But when officials squander our money, they undercut their own efforts to persuade voters to give them even more to spend."

Walters cited two other examples in addition to the stem cell agency. One involved the high speed rail project and the other state prisons.

Again, the point about all this is not the specifics on CIRM salaries but the environment in which the agency is operating. Concern about waste and/or excessive public sector salaries is not going to vanish, and the agency must deal with it if it is going to be successful in asking voters to approve another multibillion bond measure to continue its existence.

(A footnote: Walters was in error when he said Brown appointed new CIRM Chairman Jonathan Thomas. He was nominated by Brown and two other statewide officials and elected by the CIRM board.)

Klein's Role as CIRM Chairman Emeritus

Robert Klein, left, at his last meeting as chairman of CIRM.
Klein's wife, Danielle, is in the center, with newly elected
chairman Jonathan Thomas on right. 

Bob Klein, who has spent the last six-and-half years as chairman of the $3 billion California stem cell agency, is now officially chairman emeritus.

So what does that mean, we asked agency spokesman Don Gibbons awhile back, and does it carry compensation? Gibbons replied,

"The role of the chair emeritus is to be determined. If he volunteers for a special project for CIRM in the future, the agency would probably cover his expenses, again TBD(to be determined) on a case-by-case basis."

Gibbons said Klein traveled last month at CIRM expense to the BIO convention in Washington, D.C., with newly elected CIRM Chairman Jonathan Thomas "to make introductions and hand off his connections."

Klein, a real estate investment banker, served most of his term without seeking compensation. In December 2008, the board authorized a $150,000, half-time salary. Klein stopped drawing that salary on Dec. 17, 2010, and served until June 23 without a salary. Gibbons said Klein received no severance or final payment.

Here is a link to the resolution the board approved last month designating Klein as chairman emeritus and recounting his contributions to the agency.

San Jose Mercury News: Stem Cell Bond Proposal Is Financially Spacey

The San Jose Mercury News today said that California is in "no position" to make an additional multibillion dollar bet on the California stem cell agency and its efforts to come up with a new stem cell therapy.

Commenting on the possibility that CIRM would seek voter approval of another mammoth bond measure, the newspaper said in an editorial,

"What planet are these guys from? "

The newspaper continued,

"Going back for more would make no sense regardless of the economy, but even contemplating it now shows either ignorance or an incredible disregard for the magnitude of California's financial crisis. How could the agency ask for an additional $3 billion when the state is trimming more than $10 billion from essential services?

"The stem cell agency has fulfilled its promise to build a research infrastructure that would attract some of the world's greatest scientific minds. But Californians have yet to see any tangible evidence that their investment is producing the cures that were also promised. And even if they had, $3 billion is a substantial investment for one state to make in a worldwide research challenge."

After seven years, the newspaper said,

"...(T)he research should be far enough along for venture capitalists to see the wisdom of investing."

The editorial's starting point was the kerfuffle over the $400,000 salary of CIRM's new chairman, which the newspaper withheld judgment on. What caught our attention is that the newspaper seem surprised by what it called a "real eye-brow raiser" – the proposed bond measure.

The bond proposal has been publicly known for many, many months. Much of the CIRM funding is being spent in the Mercury News' backyard. For the newspaper not to be aware of the plan says a great deal about the state of coverage of the agency by the mainstream media. It also reflects the current sad state of the newspaper industry in general.

Governor Defied; State College Trustees Approve Controversial $400,000 Salary

You could say so much for political power.

Trustees of the 19-campus California State University system today defied Gov. Jerry Brown and the lieutenant governor and approved a $400,000 salary for the new president of San Diego State University.

Both Brown and Lt. Gov. Gavin Newsom, both of whom are among the trustees, opposed the salary, although both men have remained mum on the $400,000 salary of the new chair of the California stem cell agency, who they nominated in June.

Laurel Rosenhall of The Sacramento Bee reported that Newsom noted that the increase came on the same day as undergraduate tuition was boosted $1,000 by trustees.

Rosenhall wrote,

"'I caution us today with these two decisions, and I feel compelled to make this point,' Newsom said. 'There are plenty of people watching, and people we need as supporters.'

"Newsom said he had heard from two lawmakers earlier in the day who were concerned about the proposed salary hike. One of them, state Sen. Ted Lieu, posted his thoughts on Twitter:

"'To CSU full board, let me be very clear: I will find it extremely difficult to vote to restore CSU funding if SDSU Prez salary is approved,' Lieu wrote."

$400,000 Salary Riles Governor But Not at Stem Cell Agency

High public salaries made the news again today in California. And again it involves a $400,000 pay package but not at the California stem cell agency.

This time it involves San Diego State University. Gov. Jerry Brown says the school, which has 35,000 students and a $794 million operational budget, doesn't need to pay $400,000 for a new, fulltime president. Ironically, Brown and other state officials nominated a man who is being paid $400,000-a-year for part-time (80 percent) work as the new chairman of the California stem cell agency, which has an operational budget of $18 million and a staff of about 50.

According to The Sacramento Bee, Brown wrote the California State University trustees, who are considering the salary today,

"I fear your approach to compensation is setting a pattern for public service that we cannot afford."

He continued,

"The assumption is that you cannot find a qualified man or woman to lead the university unless paid twice that of the Chief Justice of the United States. I reject this notion.

"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."

The point in all this salary hooha is not whether the chairman of CIRM or San Diego State really deserves the salary. It is how it is perceived by large segments of the public, in this case, including the governor. In the case of CIRM, the salary flap is also likely to have an impact on its ability to pass another multibillion dollar state bond measure to continue its existence.

We are querying the governor's office about how it squares the San Diego state salary letter with Brown's nomination for CIRM chair. So far, the governor's office has failed to answer other, earlier queries concerning Brown's role in the CIRM chair nomination process.

For out-of-state readers, the California State University system is separate from the University of California.

Reader Calls for More Context and Comparison on CIRM Salaries

Jim Fossett filed a comment on the "Salary Hooha" item that deserves more attention.

Here is one key paragraph from his remarks:

"The coverage of CIRM salaries is a cheap shot calculated, and quite successfully so, to incite public outrage without providing any context or consideration of what other people doing similar kinds of jobs get. None of this context appeared in any of the original coverage and it should have."

Fossett makes a good point about the need for context by the mainstream media in reporting public salaries. We differ with him about inciting public outrage. There is no need to incite public outrage about public salaries. It has existed in abundance for years, for good and bad reasons. It is not likely to vanish, no matter how much context and comparison is provided.

CIRM is not alone in being targeted in the media in the past week or so. A proposal to pay the president of San Diego State University $400,000 and a press release on state salaries statewide also triggered hostile public commentary.

For the record, here is a list from The Sacramento Bee of the top five public salaries in California in 2009, all of which seem dubious to the California Stem Cell Report, particularly the coaches' salaries. However, that's because we believe the UC system has no business in bigtime intercollegiate athletics – that despite enjoying many football and basketball games while at UCLA. But that is a topic for another web site.

• Jeff Tedford, UC Berkeley football coach, $2,338,409.39
• Benjamin Clark Howland, UCLA basketball coach, $2,135,188.22
• Timothy H. Mccalmont, UCSF professor of medicine, $1,902,464.33
• Philip E. Leboit, UCSF professor of medicine, $1,854,158.22
• Ronald Busuttil, UCLA professor of medicine, $1,782,044.62

Fossett's comment can be seen in full at the end of the "Hooha" item.

Simpson on Salary Coverage: Basic Journalism

Here is a statement by John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., concerning questions about news coverage of the $400,000 salary of the chairman of the California stem cell agency. Prior to joining Consumer Watchdog, Simpson had a long career as a newspaper editor. His statement came in response to an anonymous comment on the "salary outrage" item on the California Stem Cell Report. The comment can be found at the end of that item. What follows here is Simpson's statement.

"It's not a cheap shot to report what salaries taxpayers are paying their public servants. It's simply basic watchdog journalism. If this sort of reporting had happened in the mainstream media before the vote, perhaps the outcome would have been far different.

"The comparison to medical school deans' salaries is inappropriate.  CIRM is a 50-person state agency dedicated to funding research. It does what NIH does, except on a much smaller scale. Being the dean of a medical school is far more complex and demanding than being the Chair of CIRM, a part-time job, that should be an oversight function.

"Perhaps the deans on the board weren't troubled by the eye-popping salary because they make so much themselves. They need to think like the average person when evaluating salaries. It's clear that a well-qualified candidate was available at a fraction of the cost.

"So what if the NIH director took a cut in salary when he assumed that position? That's what the idea of public service is all about.  The salary should be reasonable, but one ought not to be able to feather the nest on the taxpayer's dime.  No mater how you spin it, $400,000 for a four-day-a-week job is too much money.

"There are questions that need to be answered.  When does Jonathan Thomas vest in the state's pension fund? What will his benefit be?"

LA Times Editorial on New CIRM Chair: Tin Ears and Extinction

The Los Angeles Times said this morning that it suspects that the election of Jonathan Thomas as chairman of the $3 billion California stem cell agency "will go a long way toward assuring the institute's extinction."

In an editorial, the state's largest circulation newspaper said,

"It always annoys voters to discover that government workers make more than they do, but what especially rankles about Thomas' big paycheck is that his hiring comes at a time when most state agencies are making radical cutbacks and when the institute itself is considering a ballot measure to ask voters for billions in new funding."

The editorial is the latest in several negative pieces in the mainstream media about the choice of Thomas, a Los Angeles bond financier, to become chairman. The articles focus primarily on Thomas' $400,000, part-time (80 percent) salary.

The Times wrote,

"The new head of California's stem cell research agency, which has a staff of 50, not only makes more money than the governor, he makes twice as much as the chief of the National Institutes of Health, which has 17,000 employees. Does that make him overpaid? Not necessarily. But it does make the board that hired him remarkably tin-eared about politics."

The editorial did note that "it's possible" that Thomas "could earn his big bucks," given his background in finance, if CIRM is forced to try to sell state bonds privately.

The selection of Thomas also drew attention this week in the San Francisco Bay Area in a commentary by San Francisco Chronicle columnist Phil Matier in a report on KCBS television station.

The station picked up the LA Times news story on Thomas' salary, adding that it was one of the highest in state government. Matier said during the news story that it was all part of the "birth of a bureaucracy." He said voters shouldn't expect a stem cell breakthrough for another 10 years. He also called CIRM the "high speed rail of medicine." For non-Californians, that is a reference to another multibillion dollar California bond program that is staggering under heavy public criticism.

In another commentary on a blog called Secondhand Smoke, Wesley J. Smith, author and bioethicist, posted a video of the song "Hey Big Spender." Smith wrote,

"The state is sinking financially.  Cutbacks are being forced across the board.  But not at the CIRM....

"These people live in a different world of 'entitlement' (there’s another word) and 'luxury.'  This is just another reason for the people of California to turn off the borrowing money spigot in 2014."

Prior to the LA Times salary story, Pete Shanks of the Center for Genetics and Society of Berkeley, Ca., on June 29 wrapped up the election of Thomas on its Biopolitical Times blog, quoting John M. Simpson of Consumer Watchdog of Santa Monica, Ca. Simpson said that the selection of Thomas is "a public relations disaster from which the stem cell agency will never recover."

For other articles on the Thomas election and the situation at CIRM, see here, here, here, here and here.

CIRM Salaries Spark Outrage from LA Times Readers

"Rathole," "Alice in Wonderland," "shut the whole thing down," "they just lost my vote" – some of the reaction to the Los Angeles Times story this morning about the California stem cell agency.

By 3:10 p.m., 142 Times readers had commented – mostly angrily – about CIRM and its salaries, particularly the $400,000 pay for Chairman Jonathan Thomas for a four-day work week. The article  by Jack Dolan was among the top five most emailed stories on the LA Times web site. The article was promoted on the front page of the print edition of the Times. By mid-afternoon today, the story was "recommended" 142 times on Facebook and "tweeted" 58 times, drawing even more unpleasant attention to CIRM.

Obviously, the negative comments are coming from the people who feel the most strongly about the subject and do not necessarily represent a complete view of the sentiments of all readers. And the number of comments is not huge. But they do illustrate the serious PR problem facing CIRM as it ponders whether it should go to the ballot in the next few years and ask voters for another $3 billion to $5 billion.

One can only imagine what the opposition will do when it wraps some of these comments into a TV ad against such a bond measure.

Not all of the comments amounted to simple anti-government venom, however.

One reader wrote,

"Okay let's pretend an agency chairman's main job is fund raising and not running the agency, not evaluating the research, and not recruiting the best researchers.  Shouldn't we give him a small salary plus commission?  Wouldn't that focus him more on successful fundraising?"

Another wrote,

"The Bush-era stem-cell-research restrictions are gone. If the scientists are good enough, they will be able to compete successfully for grants from the National Institutes of Health (your federal tax dollars hard at work). If they are really good, and really lucky, they will be able to get funding from the Howard Hughes Medical Institute. There is no longer a reason for this separate California stem cell agency to exist. It's a boondoggle. But like so many government programs, it has taken on a life of its own, and it will consume vast amounts of wealth fighting for its own survival. It's time to shut them down. "

The story received front page attention in the print edition of the Times, a rare occurrence for a story about the stem cell agency. The paper carried the following tease on page one to the article. We should note that the tease may be all that many readers actually read.

"High salaries at state’s stem cell agency
"It will pay its new part-time chairman $400,000, pushing the combined annual income of its two top officials to nearly $1 million."

More media unpleasantness may be in the works for CIRM. If the Times works like most newspapers, an editorial critical of the agency is likely to appear in the next few days.

LA Times on $400,000 CIRM Chair Salary: Not a Clipping for CIRM to Parade Around

Until today, the Los Angeles Times, California's largest circulation newspaper, has remained silent on the election 11 days ago of bond financier Jonathan Thomas as the new chairman of the California stem cell agency.

The Times' first story on Thomas' election, however, was not the sort of good news that Thomas has made one of his top priorities in his new post at the $3 billion enterprise.

The piece by reporter Jack Dolan focused on Thomas' $400,000 salary for part-time work (80 percent) as well as other salaries at the agency. And they were not placed in a favorable context.

The first three paragraphs of the story said,

"California's stem-cell research agency says it needs billions more taxpayer dollars to deliver on promised cures to major diseases. Yet at a time when other departments are cutting back spending, the agency recently agreed to pay its new boss one of the highest salaries in state government.

"The 50-person grant-making body will pay a Los Angeles investment banker $400,000 to serve as its new part-time board chairman, pushing the combined salaries of its two top officials to nearly $1 million per year.

"Santa Monica-based Saybrook Capital founder Jonathan Thomas - chosen over a former cardiologist who was willing to take the job for less than half the salary - said his pay is 'reasonable' because he has the background to help the agency raise the money it needs to survive. 'Without funding, everything else suffers,' Thomas said."

The story appears to be destined for publication in tomorrow's Los Angeles Times and will probably receive prominent play, perhaps even page one. But the piece first surfaced, as best we can tell, on the web site of the Bellingham Herald in the state of Washington. Presumably the paper subscribes to the Times news service, and the story was posted automatically to the Bellingham web site. (The Times has now posted the story, which can be found here on its web site.)

Dolan's story noted that Thomas' well-qualified rival for the chairman's job, Los Angeles cardiologist Frank Litvack, would have served for $123,000 a year. Dolan quoted John M. Simpson of Consumer Watchdog of Santa Monica, Ca., as saying that the decision on Thomas was "tone-deaf" in a state mired in a financial crisis. Simpson said it will come back to haunt the agency.

The last two paragraphs of the Times story said that Thomas told CIRM directors last month that "they were in a 'communications war' in which 'the world seems to be focused on internal issues instead of the grand big picture' of the institute's mission to cure disease.

"His solution? In late June the agency posted an ad for a new public relations director who will make as much as $208,520 per year."

CIRM Media Coverage: PR Problems, Salary Issues and Bond Election

The California stem cell agency has picked up additional media coverage this week, including a Q & A on Nature magazine's web site in which CIRM's new chairman stressed the need for better PR.

Also appearing this morning was an editorial in the San Diego Union-Tribune and, earlier this week, an item in a political column in the San Francisco Chronicle.

But first the piece in Nature, written by Erika Check Hayden. It consisted of questions and answers from Jonathan Thomas, who was elected chairman last week.

Here is the first question and answer:

"Name one thing that needs to change at CIRM and one thing that the agency is doing well.

"The agency is doing a fantastic job of developing projects that are on the cutting edge of science, and going after a wide range of currently incurable diseases. The science side is a huge success.

"But the public-communication and information efforts need to be dramatically improved. The agency has done a very good job of informing the scientific media about the projects that it has funded, but I don't think it has given sufficient attention to educating the public or the elected officials that oversee the agency. So I am starting a robust public-communication programme."

Hayden also asked about Thomas' $400,000 salary, which is part of the public relations problem facing CIRM. Nature wrote,

"You will be paid US$400,000 a year. Why do you deserve a higher salary than the governor of California or the director of the National Institutes of Health?

"The voters approved the maximum salary for the position to be a little over $500,000. (clarification: Proposition 71 did not state a salary for the CIRM chair; it directed the board to set the chair's salary. The board did this 2008. See 'Salary for CIRM head despite deficit') The board felt that it was a job that would take up 80% of the incumbent's time. My feeling is that if there's somebody that you really want in the position, that somebody should be paid commensurate with what the voters approved. So 80% of $500,000 is $400,000, and I believe that salary is in keeping with voter intent."

The parenthetical clarification is from Nature – not the California Stem Cell Report – but it is an accurate description of how salaries are set at CIRM. If a $500,000 salary had been included in the ballot measure, it probably would have doomed the initiative's chances at the polls.

Thomas also discussed a possible bond election, perhaps as much as $5 billion, to provide more funds for CIRM. He also briefly discussed creation of a nonprofit organization to help reduce the size of the proposed bond issue. CIRM will be making its last grants in just four years or so, depending on its burn rate.

The San Diego editorial said that the stem cell agency is "at its most critical stage since its creation." The newspaper wrote,

"And it is our guess that many who have followed CIRM would agree that the institute’s awkward overlapping management structure, the controversies over conflicts of interest, its internal and external politicking, and the lack of legislative oversight were not what they bargained for when they voted for it."

The editorial concluded,

"Stem cell research remains one of the most exciting and important fields in medicine. With a new era beginning at CIRM, it is our hope that headlines to come can highlight the scientific successes and not the managerial failings."

 The San Francisco Chronicle's Matier and Ross column on Monday reported the election of Thomas. The column said Thomas' salary will include $250,000 in private funds, which is incorrect. The funds are public. They were donated to the state some years ago by private individuals to be used as the agency wished. Outgoing Chairman Robert Klein and the CIRM board are trying to avoid public outrage at the salary by using the funds from the donors and portraying them as non-public.

Stem Cell Agency Seeking High Level PR Person; Salary Could Top $200,000

The California stem cell agency is seeking to hire a public relations person at a salary of up to $208,250 to peddle the good news about its efforts and pave the way for voter approval of a $3 billion to $5 billion state bond issue.

The CIRM board approved the position last week. It was promptly posted yesterday on the CIRM web site.

The job description does not mention the bond measure, but that is clearly in the minds of the board. Last week, they chose a man to head the $3 billion agency who says it is in "communications war." Jonathan Thomas, a Los Angeles bond financier, said he is embarking on a misssion to tell CIRM's "great story" and assure its continued financing.

The new PR person will work under the direction of Thomas and Co-vice Chairman Art Torres, a former longtime state legislator and head of the state Democratic Party. Torres himself has a better-than-average understanding of PR and what it takes to win elections. Torres is also chair of the CIRM board's Communications Subcommittee.

The salary for the new position, with a range from $139,048 to $208,520, is likely raise some eyebrows. It could exceed that of the head of the NIH, who earns $200,000 and oversees a $40 billion budget, but who is obviously underpaid. It is certain to exceed that of the media director for the University of California system, who earned $110,437 in 2009 and that of the communications chief at UCLA, who was paid $156,180 in 2009.  The chief communications officer at CIRM was paid $194,409 in 2010, but the new person is virtually certain to be paid more. (The salary figures were reported by The Sacramento Bee's state salary database.)

Significantly, the position – director of public communications -- is within the chairman's office and not the office of the president of CIRM, Alan Trounson. Left within Trounson's purview, perhaps only nominally in terms of its strategic direction, is scientific communications. The California Stem Cell Report has commented earlier on the difficulty of running a PR operation with a bifurcated structure.


The job description makes it clear that the new PR person will be contracting with an outside firm for additional help. The description also indicated that CIRM expects to see "quantitative and qualitative growth" in media coverage of the stem cell research effort.

Public Already Commenting Negatively on $400,000 Salary for New CIRM Chair

Initial mainstream media reports about the $400,000 salary of the new chairman of the California stem cell agency, Jonathan Thomas, today promptly triggered compaints from the public.

By late afternoon, the story on The Sacramento Bee website had attracted 39 comments, many of which remarked quite unfavorably on the pay. Torey Van Oot wrote The Bee story.

One anonymous reader said, "'We' the tax payer getting screwed again with this high salary."

Also posting a story on the election of Thomas was Katie Worth of the San Francisco Examiner.

Consumer Watchdog: $400,000 CIRM Chair Salary Will Incense Public

Consumer Watchdog's John Simpson, a longtime observer of the California stem cell agency, today said that the public will be outraged by the salary of its new chairman, damaging the prospects of a new multibillion dollar bond measure for stem cell research.

Simpson, stem cell project director for the Santa Monica, Ca., organization, supported the candidacy of Frank Litvack, writing an op-ed piece May 31 in The Sacramento Bee. Jonathan Thomas, a Los Angeles bond financier, was elected last night on a 14-11 vote.

Asked for comment on the outcome of the election, Simpson said in an email,

"The election of Bob Klein's successor was an opportunity for the board to end the dysfunctional dual executive model that has plagued CIRM since its launch and move to a structure where the chair serves in an oversight capacity. All outside evaluators have advocated this.

"Instead, after considerable arm-twisting from some of the state's top Democrats, the board picked a $400,000-a year candidate, Jonathan Thomas, who plans to be deeply involved in the agency's day-to-day operations. CIRM already has one executive who makes a half-million-dollar salary, President Alan Trounson. It's pure folly to spend nearly that much again so that two overly paid executives can trip over each other in a 50-person state agency.

"By comparison Dr. Francis S. Collins, director of the National Institutes of Health, gets a salary of $199,700, according to the NIH Department of Human Resources.

"The public outrage that will result from hiring a $400,000-a-year chairman will prove to be a public relations disaster from which the stem cell agency will never recover. Those contemplating going to the public in the future to seek another bond issue should have considered the negative impact such a salary will have. Opponents of a bond initiative will have a field day.

"The board had the chance to correct CIRM's management structure and put the agency on the right track for the future. They squandered that opportunity, opting instead to select the candidate with the best political connections, and did so at considerable unnecessary expense to the public."

Papering over the Pay Problem at CIRM: When is a $400,000 Salary Not $400,000?

Three top leaders of the California stem cell agency have come up with a plan that they hope will allow CIRM to avoid the wrath of the public when its new chairman is paid a salary that could be seven times the income of an entire, typical California household.

The proposal, which has not been laid out in public, was advanced in a March 17 letter sent to the four state officials who have responsibility for nominating a person this spring to replace outgoing Chairman Robert Klein, who is a real estate investment banker. He and Art Torres, co-vice chair of the agency and a former state legislator, and Ted Love, a San Francisco area biotech executive, signed the letter.

Under terms approved last month by the CIRM board, the new chair could be paid as much as $400,000, which is nearly seven times the median California household income of $61,000. The Klein proposal calls for only $150,000 of the $400,000 to come from "taxpayer" funds. The remainder would come from so-called "private" funds donated to CIRM several years ago by philanthropists. In fact, those "private" funds are now "taxpayer" funds, just as any gift becomes the property of the recipient, and the cash is in state/CIRM coffers.

The plan also would establish a dubious precedent and raise conflict of interest questions. It would place private individuals and possibly biotech companies in the position of paying for the salaries of CIRM leaders, as John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., pointed out.

Asked for a comment, Simpson said,

"This plan sounds like an incredibly dubious course to me. If you want to influence CIRM, just donate to the ICOC(the CIRM governing board) chair's salary. Folks used to call that bribery."

In their letter, Klein, Torres and Love wrote,

"We are...cognizant of the difficult financial situation confronting the state and the need for agencies like CIRM to ensure fiscal restraint."

They also said,

"It is very important, however, for CIRM to have the right leadership and not limit our choice to individuals who have sufficient personal wealth to serve for little or no compensation. CIRM is at a critical juncture as it moves towards the funding of human clinical trials, Given the complexity of this effort and the importance of providing rigorous overesight, it is essential for CIRM's governing board to have strong leadership."

In addition to attempting to minimize negative public reaction, the pay plan would provide political cover for the state officials nominating candidates for chair. The officials are the governor, treasurer, controller and lieutenant governor.

As Torres mentioned at the March board meeting, none of those officials are likely to be enamored of the idea of recommending somebody for a lucrative state post while state funds to aid the poor and children are being slashed in the face of California's financial crisis.

High salaries for public officials are an anathema to much of the public, which has a visceral, hostile reaction to them. That is the case whether the salaries are deserved or necessary to attract the appropriate talent. The Klein plan, however, only compounds the PR problem. Attempting to make a $400,000 salary appear to be a mere $150,000 only makes CIRM appear deceptive and less than trustworthy. That is not to mention the dubious precedent it would set for the agency by relying on private handouts for essential operations.

The pay plan has yet to be acted on by the CIRM board. The letter said it would go to the directors' Governance Subcommittee at its next meeting and then to the full board if it is approved by the subcommittee. That could take place at the May meeting of the directors.

(An earlier version of this item incorrectly said that the letter was signed by Duane Roth, co-vice chair of the agency.)

CIRM Clarifies Directors' Pay Proposal

Directors of the California stem cell agency next week are expected to approve a plan to compensate some members of its board up to $15,000 a year, but confusion about the pay rate has arisen because of a footnote in the proposal.

The plan would affect six patient advocate members of the 29-member CIRM governing board. The proposal posted on the CIRM web site for the board's Jan. 27 meeting in Burlingame states:

"A regular Patient Advocate member of the Grants Working Group would be eligible to receive 75% of the daily compensation paid to a regular Scientific member of the Grants Working Group and the Patient Advocate Vice Chairs would be eligible to receive 75% of the daily compensation paid to the Review Chair."

The compensation for a scientific member of the group is $750 a day. Seventy-five percent of that is $562.50.

However, CIRM says the formula in the footnote does not exactly represent what is being proposed.

James Harrison, outside counsel to the board, said in an email,

"First, the footnote has understandably caused confusion -- we plan to delete it and repost.

"Second, under the policy, the rate of the stipend would be the same for the regular Patient Advocate members and for the Patient Advocate Vice Chairs -- $562.50 per day. The variable is the number of days required for preparation and participation in a particular review session.

"If the Board were to adopt the policy, the Chair of the Board would consult with the Scientific Staff regarding the volume and complexity of applications for a particular review session and their expectation regarding the number of days required for the scientific members of the Working Group for that session. The Chair would then determine the number of days required for the regular Patient Advocate members and for the Patient Advocate Vice Chairs. The Chair could determine that the Vice Chairs will require additional preparation time, so the total amount paid to the Vice Chairs could be different than the total amount paid to the regular Patient Advocate members for a particular review session."

Regarding the deletion, we would recommend that CIRM note on the document that it has been altered since its first public posting. Given that it is an official government document and part of the public record, it is important that an accurate record of its history be maintained.

For additional background on the plan, see this item.

Feigal Salary

In response to a query, CIRM said this afternoon that the new vice president of research and development, Ellen Feigal, would be paid $332,000. You can find the full story on her appointment here, with the updated salary information.  

CIRM Salaries: More Than You Want to Know

Salaries at the California stem cell agency tend to be generous when compared to most other state agencies and have triggered comments from some that they are, in fact, “outrageous.”

However, in 2009 the salary of CIRM President Alan Trounson was only $490,182.97, well below the $2.3 million for the head football coach, Jeff Tedford, at the Berkeley campus of the University of California. Tedford earned the most of any of California's public servants that year. No. 2 was another UC coach. No. 3 was an academic with $1.9 million. He is Timothy H. McCalmont, a professor of clinical pathology and dermatology at UC San Francisco.

Nonetheless, Trounson, Tedford and McCalmont all share one common characteristic. Their salaries are of a magnitude that makes California voters gasp and shudder. They have a visceral, negative reaction to what they regard as excessive wages for government employees – a reaction that is not necessarily perfectly rational.

The governor, who makes $212,179, and state lawmakers, who make $116,208, effectively can do nothing to change CIRM salaries. Prop. 71, which created the stem cell agency, walled it off from mischievous fingers that might want to meddle.

Currently CIRM's executive salaries are below the radar of both public and news media. But CIRM is considering proposing, as soon as two years from now, another multibillion dollar ballot measure to extend the existence of the stem cell research effort. That could raise significantly the attention level of the salaries.

Interestingly, the agency partly justifies its salaries on the basis that the agency could go out of business as soon as 2015 when it may run out of its original $3 billion. However, an additional $4 billion bond measure could prolong its life for another 10 years or more.

We have written from time to time about salary issues at CIRM. The agency itself has a number of pertinent documents. But dredging up all the relevant material can be laborious. To help readers navigate the salary information, we have prepared a reading list of stem cell agency documents, a state salary database and selected articles from the California Stem Cell Report. More items can be found on this web site by searching on the term “salaries.”

We will be preparing more reading lists on California stem cell topics. If you would like to see a reading list on a particular subject, please send a note along to djensen@californiastemcellreport.com. Or you can simply make a request via the “comment” function at the end of this item. Just click on the word “comment.”

The salaries reading list can be found here and here.

CSCR Reading List: Salaries at the California Stem Cell Agency

Here are links to articles and California stem cell agency documents dealing with CIRM salaries, which are high compared to many state agencies and which have come under fire from time to time.

CIRM salary ranges

Searchable Sacramento Bee database on salaries of all state employees, including the University of California and the California state university system

CIRM compensation policy

CIRM compensation philosophy
This document attempts to make the case for the high salaries that exist at CIRM at some levels. Among other things, the agency says,

“CIRM employees must be intelligent, entrepreneurial, motivated, flexible, confident in their own abilities, and committed to stem cell science. To retain this special level of employee, CIRM’s employment policy must reflect and reward the uniqueness of a CIRM employee.”

It also says,

“CIRM’s anticipated life-span is 10-14 years, which rules out the possibility of a long-term career track that is available for many civil service positions in the UC system.”

Here are California Stem Cell Report articles dealing with compensation. Others have been published and can be found by searching on the term “salaries” on this web site.

A Matter for CIRM to Ponder: California's Visceral Reaction to High Salaries for Public Servants, July 25, 2010

Science vs. Salaries: What Do People Talk About? Dec. 14, 2009

Stem Cell PR, Salaries and Mixed Messages, Dec. 10, 2009

New CIRM Figures Show 25 Percent Budget Increase, June 17, 2009

“The largest component of the budget goes for salaries and benefits, which are projected at $7.4 million for 47 employees. That is $1.9 million more than this year's estimated figure of $5.5 million. Personnel costs next year amount to an average of roughly $150,000 in salaries and benefits for each CIRM employee.”

CIRM Executive Salaries Take a Hit, April 9, 2008

"Should the president of the California stem cell agency, with roughly 26 employees, be paid $300,000 more annually than the director of the National Institutes of Health, which has nearly 19,000 staffers?"