Latest on New CIRM VP and Compensation

The California stem cell agency could be eyeing the possibility of beefing up non-salary compensation for a new vice president, who it has been seeking to hire since last summer.

The move appears to be in lieu of boosting the existing VP pay range beyond $332,000 and comes as CIRM President Alan Trounson seems to closing in on a candidate. On two recent occasions, the question of compensation for the new VP for research and development has been on the agenda of CIRM directors. In both cases, however, it was removed with no action. CIRM Chairman Robert Klein explained on one occasion that negotiations were not quite at the appropriate stage.

We have reported that directors were expected to be asked to increase the salary to meet the demands of the new VP. Otherwise there would be no reason to place VP compensation before directors. However, Don Gibbons, chief communications officer for CIRM, said in an email:

“You should know that despite your repeated assertions otherwise, there has never been any discussion of exceeding $332,000.”

We then asked Gibbons whether other types of compensation were being considered or the compensation package restructured in some way. Gibbons replied that “parts of compensation packages other than annual salary can require board review,” but did not elaborate.

The salary is touchy politically because California remains in the throes of a financial crisis that has resulted in major cutbacks around the state. CIRM, on the other hand, has not felt the impact because its budget cannot be touched by the governor or the legislature.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., attended the last directors meeting that was scheduled to address the compensation issue. He asked CIRM Chairman Klein about the matter.

According to the meeting transcript, Klein replied:

“We continue to calendar it and will for flexibility in each of our calls until we have gotten to a point that we can make a decision. It provides us the flexibility to consider it. But until we get to the point where we have done all of our due diligence and come to final terms, we're not in a position to take any action if, in fact, action is required. The president has the authority to hire this person. And to the extent that they need any additional approvals from us, we carry that on our agenda. So until we've hired him, we'll continue each time to have it on the agenda because it gives us flexibility.”

CIRM Moving to Hire VP at More Than $332,000

The California stem cell agency may well have a new vice president of research and development by the end of this month and at a salary exceeding the $332,000 allotted for the position.

CIRM directors will meet one week from today to consider raising the existing pay range for the position. CIRM President Alan Trounson obviously has a candidate that wants more than $332,000, and the board is not likely to reject Trounson's choice. To do so would indicate a lack of confidence in Trounson.

CIRM has not disclosed exactly what the new salary will be or explained why it is needed. Don't look for that information until the day of the meeting and probably only if you are in attendance at one of the telephonic meeting locations around the state. CIRM generally has not posted such sensitive salary information in advance of meetings.

Trounson was eager to find someone with industry experience. Last July, Trounson told directors that he wanted “someone with the skill base to have more of a focus in their role with biotech/pharma – translation – clinical applications, which is where we are moving with our translational, disease teams and clinical grants and where we are thin in capacity.”

Trounson hired Levin and Company at a cost of $100,000 to help with the search.

The new position was created by Trounson after Marie Csete resigned suddenly last June as CIRM's chief scientific officer. She said her advice was not respected. Her position will not be filled, but her responsibilities are being parcelled out to the new VP and Patricia Olson, executive director of scientific activities, who has been with the agency since its early days. Under a new structure announced last August, Olson reports directly to Trounson as will the new VP. Previously Olson reported to the chief scientific officer.

The compensation for the new post was scheduled to come up at the CIRM board meeting earlier this month in the State Capitol. CIRM chairman Robert Klein took the matter off the table the day of the meeting, saying negotiations were not at the right stage.

The move came on the same day as The Sacramento Bee carried a front page story that said California state workers received 4 percent less pay last year than in 2008 as a result of the state's financial crisis. Approval of a salary beyond $332,000 creates a public relations risk for CIRM, given the severe cutbacks elsewhere around the state. CIRM's salaries are already quite generous compared to other state agencies.

Salaries are easy for the public to criticize and to understand, especially compared to arcane scientific studies that may not seem immediately relevant to many people. Additionally, boosting a $332,000 salary without telling the public in advance why or specifying the size of the increase plays into the hands of those who are critical of CIRM's lack of transparency and openness.

The new VP will have a financial impact on CIRM beyond the salary. He or she is expected to have at least two or more staffers assigned to work for him or her. They will be new hires at CIRM, which is already chafing under the legal limit of 50 employees. In fact, Trounson has warned that the quality of work could slip unless a way is found to circumvent or repeal the cap.

Another matter is on the table as well next Monday. The item says,

"Consideration of guidance and CIRM’s Medical and Ethical Standards regarding use of previously NIH approved lines in CIRM-funded research and additional lines that are comparable to CIRM’s recommendations to the NIH and/or would be grandfathered or approved under those recommendations.”

No further explanation was offered by CIRM.

Interested parties can take part in the board proceedings at teleconference locations throughout the state including San Francisco(4), Los Angeles(2), La Jolla(2), San Diego, Duarte, Berkeley, Sacramento, Pleasanton and Healdsburg. More locations could be added in the next few days. Specific addresses can be found on the agenda.

CIRM Directors Take Up Evaluation of Top Management

How should CIRM Chairman Robert Klein be evaluated? How should the performance of Art Torres, co-vice chairman of the $3 billion effort, be assessed? What about President Alan Trounson?

These matters are being considered at the first-ever meeting of the CIRM directors Evaluation Subcommittee, which comes five years after the agency was created and Klein selected for his post. Friday's session could provide an unusual opportunity to peek inside the nitty-gritty of management of a chimeric enterprise that combines big business, big science, big academia and big politics.

Depending on the job, the evaluation process will include solicitation of written comments from the governor, treasurer, state controller, some recipients of CIRM funding, patient advocates, the biotech industry and “other stakeholders.”

Questions to be addressed, in Klein's case, include whether he

• Shows “comfort with and tolerance in managing diverse and conflicting opinions”
• Demonstrates “a record of effectively communicating CIRM’s mission and accomplishments to stakeholders and public”
• Works effectively with lawmakers to ensure on-going support of CIRM

One section on Klein's evaluation form deals with accountability. It asks whether he “effectively manages compliance with CIRM’s public accountability requirements, including (1) the annual public report (2) the independent financial audit; (3) the Citizens’ Financial Accountability Oversight Committee; (4) public meeting and records laws; (5) competitive bidding; (6) conflicts of interest; and (7) intellectual property standards.”

We should note that “compliance with...requirements” is rather minimal, just meeting what is needed by law. That standard does not, for example, reach Klein's oft-repeated assertion that CIRM adheres to the highest standards of openness and transparency. CIRM's accountability or lack of it has surfaced recently in news reports and in a statement by an influential state lawmaker, Sen. Elaine Kontominas Alquist, D-San Jose.

We should also note that state law that requires public sessions of some meetings of the directors Evaluation Subcommittee, including the one this week. However, the specific evaluation of the individuals will be private.

Klein, a Palo Alto real estate investment banker, initially declined a salary for the chairman's job, which has a pay range of $275,000 to $508,750. But in 2008, he said he would like to be paid. Directors approved $150,000 for what they specified was a half-time position.

Torres' job is also considered a part-time position; in his case, four days a week. In December, his salary was boosted from $75,000 for halftime work to the current $225,000. The range for the position fulltime is $180,000 to $332,000. Torres was formerly head of the state Democratic party and was a longtime state legislator.

The other co-chairman, Duane Roth, a San Diego area businessman, has declined a salary.

Trounson began work in January 2008 at a salary of $490,008. His job has the same range as that of the chairman.

Here are links to  the evaluation procedure and the evaluation forms for Klein and Trounson.

Evaluation of the vice chairmen is not specifically on the agenda but is mentioned in the committee's background information. More specifics are likely to surface at a later date and be colored by experience with evaluation of Klein and Trounson. Also to be considered later is the question of just how to evaluate an employee who is not being paid – Roth.

Teleconference locations for the meeting are available for public participation in India and throughout the state, including San Francisco, Los Angeles(2), Elk Grove, La Jolla, Pleasanton, Menlo Park and Emeryville.

All locations, including the one in India, must be open to the public by state law. CIRM has not responded to our question about which CIRM director is in India.

Specific addresses of the teleconference locations can be found on the meeting agenda. To avoid confusion at the time of the meeting, you may want to call CIRM in advance if you plan to attend one of the teleconference locations.

Sacramento Bee: CIRM is 'petri dish for patronage'

The leading newspaper in the California capital today deplored the $150,000 salary increase for Art Torres, co-vice chairman of the California stem cell agency.

The Sacramento Bee said the pay is “the latest example of how people who owe their livelihood to California's taxpayers refuse to share their pain.”

The Bee's editorial was headlined, “Institute is a petri dish for patronage.”

The Bee said that Torres “has apparently improved CIRM's relations with both the Legislature and the state treasurer's office,” but that does not justify the increase.

The newspaper concluded,

"CIRM leaders continue to claim that it is vital for California to spend billions of dollars on this science, even though the new administration in Washington is funding forms of stem cell research that the previous one restricted.

“But when the institute spends money like this, taxpayers have to wonder: Does California still need a stem cell institute – one with this type of leadership?”

Stem Cell PR, Salaries and Mixed Messages

Directors of the California stem cell agency today created a special panel to come up with better and more effective ways to tell the good news about the $3 billion stem cell research effort.

That was shortly after it voted to triple the half-time salary of one of its two vice chairmen, Art Torres, to $225,000 for working four days a week. The move almost immediately prompted an irate posting on the Consumer Watchdog blog, which said that the salary sends a “horrible message” at a time when the state is chalking up record unemployment rates (30 percent or more in one county) and other state workers are facing pay cuts and mandatory furloughs without pay.

A strong case can be made that Torres is worth every penny, but that doesn't fly with folks who have been laid off and can't find work. “Wildly out of touch with the realities of a state mired in a financial crisis” was the comment from John M. Simpson, a longtime CIRM analyst, on the blog at Consumer Watchdog.

CIRM already has salary ranges that are among the highest for California's public servants, topping $500,000. One of the questions for the new PR/communications subcommittee to ponder is how to square that largess with public expectations that public servants should be lean and hungry.

Another PR/efficiency issue popped up at today's directors meeting. CIRM's other vice chairman, Duane Roth, a San Diego businessman, did a little arithmetic and pointed out that CIRM is training undergraduates for stem cell work at a cost of $50,000 per person. He said he would like to see more young people in the programs to lower the average cost.

CIRM Chairman Robert Klein likes to paper over these sorts of issues, citing what amount to notional ideas about the economic impact of CIRM spending, which is minimal considering the size of the state's economy.

The media and critics, however, seize on tangible, understandable details that make for sizzling headlines and irritate the men and women who have to work for 10 years before they see $500,000 in wages.

It is likely that Torres' salary will barely stir a ripple in the pool of sad economic news that surrounds California. But, while CIRM ponders how it can persuade the legislature to give it a pass on the 50-person staff limit enacted by voters, directors should consider the mixed messages that CIRM delivers.

The directors certainly should avoid stepping into another potential pile of financial unpleasantness discussed by Consumer Watchdog. Simpson noted that Torres' salary

“...also raises the possibility of another interesting dilemma for the board. Chairman Klein, a millionaire, initially declined to take a salary. After four years financial reality caught up with him and a year ago the board agreed to pay him $150,000 for what it also defined as a half-time job.

“How long do you think it will before he tells the board he's working four days a week and asks for a raise to $240,00?”

Torres Receives $225,000 Salary as CIRM Vice Chair

Directors of the California stem cell agency this afternoon unanimously approved a $225,000 salary for one of its co-vice chairmen, Art Torres, declaring that his work was “extraordinary” and has helped to improve relations in the nation's capital and elsewhere.

Torres (at right) joined CIRM in March on a half-time basis, with a $75,000 salary. Today's action gives him a $150,000 boost for work on an 80 percent basis.

Michael Goldberg, a CIRM director and general partner with Mohr, Davidow Ventures, a venture capital firm in Menlo Park, Ca., said Torres has picked up the work that previously was done by a fulltime legislative relations staffer. CIRM Director Jeff Sheehy, a communications manager at UC San Francisco, described Torres' work as “extraordinary” in telling the CIRM story to lawmakers.

No one at the directors meeting at Stanford University spoke against the salary move. However, John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., was monitoring the proceedings in Southern California via an Internet audiocast.

Responding to a query, he said,

"At a time when California is in a severe economic crisis, state workers' salaries are being cut and they are facing mandatory furloughs, this raise is highly inappropriate. Art Torres knew the terms of the job when he took it. He should have been happy simply not to face the cuts endured by other state employees."

Torres has made a career as a public servant and politician. The former head of the state Democratic Party (1995-2009) had a 24-year career in the state legislature. He was first elected to the state Assembly in 1972, later served in the state Senate and became the first Latino nominated as a Democrat for statewide office(insurance commissioner).

Torres' talents and experience are unique within CIRM. No other director possesses the web of political connections and government experience that Torres brings to the state-financed stem cell effort. He also has maintained his political roots, campaigning last weekend in Hayward for a candidate for the Alameda county board of supervisors.

The candidate is Nadia Lockyer, wife of the state treasurer, Bill Lockyer, who is a friend and former state legislative colleague of Torres. Lockyer also presides over the sale of state bonds, which are virtually the only source of funding for the $3 billion stem cell agency.

The other vice chairman is Duane Roth, a San Diego businessman who has declined a salary.

Coming Up at CIRM: Grant Triage and More Cash for Training, Translational Research

Directors of the California stem cell agency will meet Dec. 9-10 to consider a pay increase for one of its two vice chairmen and to give away more money for training at state and community colleges.

The agenda for the meeting at Stanford University was posted yesterday on the CIRM Web site. As usual, only the sketchiest information is currently available on the matters to be considered, but more is expected to posted over the next few days.

CIRM did not specify the amount of the increase proposed for Art Torres, who has served as a vice chairman for eight months. Currently he receives a $75,000 salary for what is supposed to be a half-time job. Our impression, however, is that he putting in considerably more effort than that.

Torres, former head of the state Democratic Party and longtime state legislator, brings to the board political know-how and connections along with state government expertise that are found nowhere else at CIRM.

Duane Roth, a San Diego businessman, is the other CIRM vice chairman. He has declined a salary.

The board is expected to act on additional grants in the “Bridges” training program. The board last January put off funding some applications in the so-called tier two category because of CIRM's financial difficulties, which are now resolved through June 2011.

Grant applicants may be interested in an item dealing with conflict of interest appeals on applications. The board is scheduled to make an unspecified “correction” concerning such appeals.

Of special interest to applicants is a CIRM staff recommendation to continue the triage or pre-application process on grants. The procedure was used on the disease team round and involves initial staff and outside reviewer screening of brief grant proposals. Only those applicants who make that cut may apply for grants.

Also on tap is approval of a round of “early translational” grants and creation of a board of directors “Subcommittee on Communications with the California Public” and a “Task Force on Public Media.” The task force would be derived from the communications subcommittee.

If you have comments for the directors on these proposals, you can send them directly to CIRM at mking@cirm.ca.gov. If you would like to comment on them for the benefit of readers of the California Stem Cell Report, you may do so by clicking on the word “comments” at the end of this item. Anonymous comments are permitted.

Dodging the Salary Bullet

Most of the time we write about things that affect CIRM. Here is one thing that won't – legislation to freeze salaries of high paid state employees.

The measure, AB 53, would impose a two-year ban on raises of about 785 state employees who make more than $150,000 annually. It is now before Assembly Appropriations Committee after winning unanimous approval from the Assembly Public Employees Committee on April 1.

The logic behind the bill by Anthony Portantino, D-La Canada, is that well-paid state employees should share the pain of budget cuts affecting children, seniors and so forth. The California stem cell agency has a bunch of folks who make more than $150,000 – too many in the eyes of some critics.

However, California lawmakers are politically unable to touch the agency because of Prop. 71, which requires an unprecedented 70 percent, super-majority vote of both houses and the signature of the governor to change state law affecting CIRM.

The significance of the legislation concerning CIRM is that high salaries are a red flag issue for the public even though they may be justified. Check out some of the comments on the story in The Sacramento Bee on the measure.

New Counsel to President Hired at CIRM

After an eight-month search, the California stem cell agency has hired an attorney from Genentech to become counsel to its president.

The name of the lawyer was not disclosed but she is scheduled to start at the beginning of July.

The job has been vacant since Tamar Pachter resigned in August and returned to the California State Department of Justice. Pachter was with CIRM only 16 months and had a salary of $225,000 with the title of CIRM general counsel.

If we were to hazard a guess, the new hire will not be earning that much. She will hold the title of counsel to the president. It appears that the general counsel position has been effectively eliminated.

CIRM is rich in legal talent and spending nearly $1.2 million this year for outside legal help.

CIRM President Alan Trounson disclosed that the new hire had been made at a meeting last week of the CIRM Governance Subcommittee, according to John M. Simpson of Consumer Watchdog, who attended the session.

Executive Evaluation Procedures Posted for CIRM

Proposed procedures for evaluation of the chairman, vice chairman and president of the $3 billion California stem cell agency are now available to the public in advance of Thursday's meeting of its directors' Governance Subcommittee.

The three paragraphs are straight forward and aimed at generating what it calls “deliverables,” The procedures also seem to be non-controversial. No definition of what the board expects from the yet-to-be-elected vice chairman is contained in the document.

Whether the evaluation procedure leads to a broader discussion of the direction of CIRM remains to be seen. But it is interesting that this document is being produced four years after creation of the stem cell agency. It is also coming three months after a salary was paid for the first time to the chairman. A salary may also be paid for the first time this year to the vice chairman, depending on whom the board chooses. The president has always received a salary but Chairman Bob Klein and former Vice Chairman Ed Penhoet were independently wealthy and declined salaries. Klein, however, asked for a salary last year. In December, the board defined his position as half-time and approved $150,000.

One could speculate that the board is telegraphing a preference on the vice chairmanship if it approves formal evaluation procedures for the job that are the same as for the two other salaried positions. However, that may not be the case. You can read more about our speculation about Thursday's meeting here.

A Salary for Klein? Half-Million Likely

California stem cell chairman Robert Klein, who has worked without state pay since late 2004, is now seeking a salary that could run as much as half-a-million dollars annually, making him one of the state's highest paid employees.

The request will come up at next week's meeting in Irvine of the CIRM board of directors. The agenda only states that the item involves "consideration of compensation of chair of the ICOC(the CIRM board)." No details were offered online. But Don Gibbons, the agency's chief communications officer, confirmed today that it was a salary request but declined to offer a justification for the move.

According to the CIRM salary ranges, Klein (see photo) is eligible for compensation as high as $508,750. Klein is a multimillionaire real estate investment banker and operates a Palo Alto. Ca., firm bearing his name. He forswore pay in December 2004 when he was elected chairman by the CIRM board.

If Klein receives the full amount in the CIRM range, he would become the second highest paid state employee outside of the University of California, according to salary information compiled by The Sacramento Bee. He would displace CIRM President Alan Trounson in that slot. Trounson earns $490,008. In addition to Trounson and Klein, Marie Csete, chief scientific officer for CIRM, is in the top ten earners with a salary of $310,008 and ranks No. 8.

CIRM's Gibbons has not responded to a query about whether Klein is seeking the full $508,750.

CIRM executive pay popped up in the news last spring, when CIRM directors approved a 23 percent hike in the management salary ranges, easily surpassing pay levels at the much larger NIH. At least one CIRM director initially balked but the boost was ultimately approved with little debate.

Twenty-three percent government pay increases generate an image and PR problem at any time. But given the Golden State's current $28 billion budget shortfall and cutbacks in education and aid to the poor and elderly, the timing can appear especially inappropriate. And Klein's salary request, deserved or not, is also likely to create such problems.

However, a bit of a precedent for the salary request popped up today in a story by Jim Sanders in The Sacramento Bee. He reported that 214 legislative staffers received pay hikes this year, despite the state's economic woes. One-third of the raises went to employees earning less than $40,000 yearly but 16 went to staffers making more than $100,000.

The article generated intense reader comment that reflected a certain hostility towards government pay boosts. One reader, identified only as Coaki, said, "These people are incredibly insensitive and stupid. Pay raises with a $27 billion deficit?"

At CIRM, the way for Klein's salary request was cleared when Ed Penhoet resigned as vice chairman. He is also a multimillionaire and co-founder of Chiron. Penhoet, who is continuing to sit on the board, was eligible for a salary, which he did not accept. Penhoet's resignation cited time constraints and did not mention the salary issue. But a vice chairman working for free while the chairman takes a handsome salary would create an awkward situation. No successor to Penhoet has been nominated.

Klein's Possible Salary: Comments From CIRM

The question of a salary, possibly exceeding more than $500,000, for the chairman of the California stem cell agency is a "non-issue" and a "non-reality," according to the agency's chief communications officer.

In an interview with the Marc Strassman of the Etopia News Channel, Don Gibbons explained that Robert Klein has not yet decided whether to ask CIRM board of directors whether they want to pay him for his work at the state agency. Klein, a multimillionaire real estate investment banker, refused to take a salary when he was elected to his post by directors in 2004.

More recently, however, Klein has more than once indicated that the question of a salary for both him and the vice chairman, Ed Penhoet, is something that the board is likely to have to deal with.

Last month, we asked Penhoet, who is a California venture capitalist and one of the co-founders of Chiron, about his position on taking a salary. He replied:

"I don't think it's appropriate for me to comment on personnel matters ( including my own)."

In the Etopia interview, Gibbons additionally discussed CIRM's opposition to legislation designed to ensure affordable access to CIRM-financed therapies. He also noted that 56 research papers have been published so far by CIRM grantees.

You can hear the 10-minute Gibbons interview here.

Kuehl on Klein Salary and CIRM Legislation Prospects

California state Sen. Sheila Kuehl says she doesn't mind if the chairman of the $3 billion California stem cell agency solicits private funds to pay his own salary, although she says the agency should be barred from accepting cash from applicants.

However, the question of private solicitation for salaries is probably moot. CIRM Chairman Robert Klein has told John M. Simpson, stem cell project director for the Consumer Watchdog group, that he has backed away from the solicitation plan. Simpson told the Etopia News Channel Wednesday that Klein now thinks his proposal is not a good idea.

Kuehl, D-Santa Monica, heads the state Senate Health Committee and is co-author of legislation, SB 1565, aimed at ensuring affordable access to CIRM-financed therapies. CIRM directors officially opposed the legislation last week.

She made her comments regarding Klein in an interview with Etopia News. She also said she is "very satisfied with the progress" of CIRM. On the federal level, she said that changing federal restrictions on funding for human embryonic stem cell research may not even be in the top 10 priorities of Barack Obama.

Kuehl said he has heard "no negatives" from the governor's office on her CIRM bill, which is now in the Assembly Appropriations Committee and close to final passage. Unless Big Pharma bends the governor's ear, she expects the measure to be signed into law.

The bill has had easy going in the legislature. No lawmaker has voted against it.

You can hear Kuehl's 19 minute interview here.

CIRM Executive Salaries Take a Hit

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?

No, according to the Consumer Watchdog of Santa Monica, Ca. Its stem cell project director, John M. Simpson, says,

"CIRM's salaries are ridiculously out of whack."

Writing on the blog of the Consumer Watchdog, a group once known as the Foundation for Taxpayer and Consumer Rights, Simpson offers as the chief support for his view the following salaries for NIH executives:

"Elias Zerhouni, Director, NIH: $191,300 (increased in January from $186,600)
John Niederhuber, Director, National Cancer Institute: $247,500
Francis Collins, Director, National Human Genome Research Institute: $300,000
Story Landis, Director, National Institute of Neurological Disorders and Strokes: $260,000"

Simpson's figures come via reporter Jim Downing of The Sacramento Bee, who obtained them from the NIH.

Simpson compares them to the $490,000 salary earned by CIRM President Alan Trounson and the $310,000 being paid to Marie Csete, recently hired as CIRM's chief scientific officer.

The salaries have recently come under increased fire because of the state's budget crisis. Salaries of public servants are always lightning rods, even in the best of times. They are far easier for the media and the public to understand than some of the financial inequities created by Prop. 13, the property tax initiative approved years ago and that now, in many ways, cripples local government in California.

The CIRM salaries are also dwarfed by the pay of some physicians within the University of California system, who earn more than $750,000 a year. And they are tiny compared to the wages earned by some of the men at UC who supervise boys running and throwing balls. Their pay can approach $2 million annually.

Nonetheless the salaries at CIRM are a perception problem, at the very least. The agency must develop a stout defense for them, which it does not seem to currently have. Otherwise, CIRM will continue to suffer attacks from critics who find the pay levels extreme.

CIRM Salary Ranges Top Those at NIH

The Sacramento Bee today reported that the salary pay ranges approved by directors of the California stem cell agency amount to a 23 percent hike for top executive positions and easily surpass those at the much larger National Institutes of Health.

Reporter Jim Downing wrote that the new pay ranges provide for a possible $508,750 top salary for the positions of chairman and president, up from $412,500. A top range of $332,000 was approved for executives at the next level, up from $270,000, with CIRM's top two attorneys at $277,500, up from $225,000.

The action, taken with little debate by the Oversight Committee does not immediately increase the salary of any employee, however, just the ranges of possible pay.

Downing also reported,

"Directors of federal medical research agencies such as the National Institutes of Health make considerably lower base salaries, according to NIH spokesman Don Ralbovsky, who said he could not immediately provide exact salary information."

CIRM Salaries Approved Along with Action on 'California Suppliers'

Here some of the highlights from today's meeting of the directors of the California stem cell agency, in addition to the appointment of Marie Csete as chief scientific officer.

They were provided by John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights, at our request. Simpson attended the session. Here is what he wrote.

"Despite (CIRM General Counsel) Tamar Pachter's recommendation, the board approved the proposed definition of a California supplier after John Valencia, an attorney for Invitrogen, made it clear that this would merely start a 45-day public comment process and the proposed regulation would be subject to change after that period taking comment into account. I was among those speaking in favor of passage.

"After lengthy discussion they adopted the Proposed Tools and Technical RFA with one substantial modification: Companies will be allowed to submit four applications like universities and research institutes. The staff recommendation would have limited companies to two applications.

"The Board also approved revised salary ranges as submitted. Top ranges were trimmed from what had been proposed at governance meeting.

"During public comment I noted that neither (CIRM Chairman Robert) Klein nor (Vice Chairman Ed) Penhoet take a salary and asked if approval of ranges for those positions indicates they intend to take a salary. He responded that after five years not doing so he may have to assess the situation and that it would be up to the board but that he 'knows of no such plans at this time.'"

We are querying Don Gibbons, chief communications officer for CIRM, specifically what salary ranges were approved.

Simpson also reported that there was little discussion of the biotech loan program and that a policy may be presented in June.

Dissecting the Legislative Strategy Behind the Latest California Stem Cell Bill

Think motherhood when you think about new state legislation aimed at California's $3 billion stem cell agency.

That's the strategy on the latest bill that targets the world's largest source of funding for human embryonic stem cell research, all of which comes at the expense of California taxpayers.

Think of those millions of taxpayers as investors. Who can say they should not receive a tidy return on their $6 billion (including interest) commitment? Who can oppose a nonpartisan, thorough-going review of the agency, which has stumbled more than once and which is riddled with built-in conflicts of interest? Especially when that agency lives in a constitutionally protected, ivory-tower world, far from the bloody financial fray now underway beneath the Capitol dome.

While motherhood is not as popular as it once was, these are motherhood questions for lawmakers and hard to oppose.

The current political climate may now be as receptive for passage of the bill, SB1565, as at any time. Legislative demonstrations of fiscal prudence are the order of the day in the Capitol. Stifling government profligacy is the paramount virtue.

CIRM gave supporters of the legislation more leverage when the agency offered an ill-timed plan to boost the maximum pay ranges of CIRM's top executives by 50 percent, or $200,000 annually in some cases. The CIRM pay plan received a public and negative airing on the same day that a $16 billion state budget deficit was announced. A subcommittee of CIRM directors balked at the executive pay proposal, but it will surface again next Wednesday. Introduction of the CIRM legislation came only a few days after that subcommittee hearing, probably not coincidentally.

The lead author on the CIRM bill is Sen. Sheila Kuehl, D-Santa Monica, who is chair of Senate Health Committee. Republican Sen. George Runner of Antelope Valley, who is part of the GOP leadership, is co-author.

Their position is that CIRM has offered an inadequate return to California investors/taxpayers. Kuehl and Runner instead propose to guarantee in state law that California residents have affordable access to therapies developed with state cash, an issue which affects CIRM's intellectual property rules. The lawmakers also want to mandate a study of CIRM with recommendations for changes. Kuehl said that one reason for her latest legislation involves breaches of the agency's conflict-of-interest policy by a number of its directors.

The bill needs 70 percent approval of both houses of the Legislature –- a super, supermajority requirement created by Prop. 71. The unique and unprecedented requirement is intended to protect the agency, but lawmakers may now regard it as a challenge to their authority.

CIRM has opposed similar legislation in the past, but it has not taken an official position on SB1565, which is the embodiment of simplicity in some ways. It could be easily severed to put the requirement for a study on CIRM operations in a separate measure, which could help its chances.

CIRM is likely to oppose the study, however, because it could generate public hearings and open the door to greater changes in CIRM procedures. At the very least, the hearings could lead to critical news coverage and possibly threaten CIRM's credibility and clout.

Next Wednesday some CIRM directors and executives will be visiting with lawmakers following the agency's Oversight Committee meeting. Kuehl's legislation is likely to come up during those sessions along with the pay proposal. CIRM supporters should be prepared with some good answers.

CIRM's Fifty Percent Pay Range Hikes Back Again

Directors of the California stem cell agency next week will take up once more a proposal to increase the top pay range of the key executives of the agency by 50 percent or as much as $200,000 annually in some cases.

The proposal stalled last month when a subcommittee of the directors balked, citing both the state's budget crisis and what they considered the dubious justification for some of the higher increases.

California is currently facing a $16 billion budget deficit, and the political heat around it is scalding. The pay proposal, however, would have no impact on the state budget because Prop. 71 was crafted to constitutionally protect the CIRM budget from cuts by lawmakers and the governor. Nonetheless, the pay proposal represents to some lawmakers and the public an example of profligate government spending.

One would suspect that the backers of the proposal, CIRM Chairman Robert Klein and President Alan Trounson, would have a plan to ease concerns of skeptical CIRM directors. However, that is not evident from the public documents now available. The March 12 agenda for the directors (the Oversight Committee) contains only a one-sentence reference to the matter. (The meeting location is pictured above. More details on that at the end of this item.)

When they were first proposed, the pay range hikes contained no detailed, written analysis supporting the increase. That analysis is still lacking.

The Sacramento meeting will also take up a draft biotech loan loan policy, which has moved through a series of hearings and is the subject of a $50,000 study to examine its economic underpinnings. The loan proposal could total as much as $750 million, according to Klein, and could be available to both the private sector and nonprofit groups. The biotech loan task force will hold another meeting March 11. The draft policy is not yet available from CIRM.

Also on the agenda for next week are proposed changes to intellectual property regulations and changes in the grant administration policy for the $758 million (including matching funds) lab construction program.

Incidentally, this is the first time that the ICOC has met in a venue where the Cab Calloway once performed. The Sacramento's meeting will be at the Crest Theater(see photo), a venue that hosts both film and live performances. It is located on the K Street mall, virtually in the shadow of the Capitol, and was restored some years ago under the direction of an architect friend, Jerry Schroeder. The March 12 agenda did not indicate whether popcorn would be served.

Lawmakers Target California Stem Cell Agency

One of California's more powerful legislators today introduced a bill aimed at the state's $3 billion stem cell agency and designed to ensure that "the state’s neediest residents will have access to therapies and drugs" developed as a result of taxpayer-financed research.

The measure would also require the state's Little Hoover Commission to study the structure of CIRM and report to the legislature by July 1 of next year with recommendations.

The legislation, SB1565 by Sen. Sheila Kuehl, D-Santa Monica, comes only a few days after CIRM attracted unwanted attention (see item below) with its proposal to boost the top pay ranges of its key executives by as much as $200,000 a year or 50 percent. The salary proposal received an unfriendly reception from some of CIRM's directors on Wednesday.

Kuehl(see photo), chair of the Senate Health Committee, said in a statement that the bill, co-authored by Republican George Runner of Antelope Valley, would maintain "the public’s trust by identifying ways to increase public accountability and reduce conflicts of interest."

CIRM watchdog John M. Simpson of the Foundation for Taxpayer and Consumer Rights said in a news release:

"The stem cell agency’s oversight board was designed with built-in conflicts of interest and it’s too big to be effective. They always have difficulties mustering a quorum. An outside analysis by unbiased observers can only be good. A hard-nosed look by the Little Hoover Commission is just what’s needed.”

Simpson also said,

"We need a provision that allows the State Attorney General to intervene if drugs or therapies funded by the stem cell agency are priced unreasonably. We’ve seen too many cases where companies benefit from publicly funded research and then set prices at obscene levels. They act like socialists when seeking research funding but are greedy capitalists when there are profits on the table."

No comment was immediately forthcoming from CIRM.

The text of the bill was not available online at the time of this writing, but Kuehl's office said the legislation would

"...require that grantees and licensees submit for CIRM's approval plans that will afford uninsured Californians access to drugs and cell therapies resulting from CIRM-funded research. The bill also ensures that publicly funded programs get the best prices for stem cell therapies and drugs by requiring grantees and licensees to sell them to publicly funded programs at a price that does not exceed one of the benchmark prices in Cal-Rx, the state’s prescription drug discount program."

The measure requires a super, super-majority vote – 70 percent of both houses – to pass. The requirement was created by Prop. 71 to make it extraordinarily difficult for lawmakers to make changes in the operation of the agency.

Passage would require a consensus from lawmakers that is rare in the Capitol. However, it is probably fair to say that the this week's pay proposal by CIRM will certainly contribute mightily to building that consensus.

(Here is a link to Ron Leuty's story on the bill in the San Francisco Business Journal.)

CIRM's 50 Percent Pay Range Hike Hits Roadblock

A key group of directors of the California stem cell agency today balked at boosting the maximum salary ranges of its top executives by 50 percent, citing the Golden State's budget deficit which has ballooned to $16 billion.

Reporter Jim Downing of The Sacramento Bee reported that members of CIRM's Governance Subcommittee said that increases of more than $200,000 (in the case of the CIRM president) were excessive. The subcommittee action came on the same day that news broke that the state budget deficit had increased another $1.5 billion.

CIRM President Alan Trounson, who earns $490,000, argued that the increases, which affect six other top positions at CIRM, were needed to attract top talent.

Downing quoted Trounson as saying,

"If I can't make appointments of people who can do the job, you've essentially wasted my salary, which is a disaster."

One of the members of the Governance Subcommittee is Claire Pomeroy, dean of the UC Davis School of Medicine(see photo). Downing wrote,

"Pomeroy, whose cash compensation at UC Davis totals $543,800, according to a University of California spokeswoman, noted that she is responsible for 8,000 employees at UC Davis, while the stem cell agency president heads a staff of 50 at most.

"'To me, there are still very fundamental questions about what positions they're citing as comparable,' (Pomeroy) said. 'This is sending the wrong message to the public about our priorities and about how we're going to spend what are limited pots of money.'"

The subcommittee did not act on some of the proposed salary ranges because they affected both Trounson and CIRM Chairman Robert Klein, who were present for the meeting. Klein, however, has declined a salary.

The subcommittee recommended increasing the top pay for some executives from $270,000 to $332,000, rather than the proposed $405,000. They did not act on ranges for agency attorneys, citing a lack of information, Downing reported.

As we have noted, the proposed increases in the pay ranges would have no impact on the state budget because CIRM's budget is constitutionally untouchable. However, the pay raises are important symbolically and politically.

The pay proposal now goes to the full board of directors for its March meeting.