CIRM Directors Judge Klein's Performance This Week

Directors of the California stem cell agency on Thursday will formally evaluate the performance of its chairman, Robert Klein, for the first time in five years.

Klein has headed the $3 billion agency since its inception, on a vote of its 29-member board of directors in December 2004. Initially, Klein, a wealthy Palo Alto real estate investment banker, took no salary and testified in court that he did not consider himself a state employee. However, he asked for compensation in 2008. The board agreed to give him $150,000 annually for what it defined as a half-time job.

Earlier this year, the directors' Evaluation Subcommittee held its first meeting to come up with procedures for evaluating Klein, the two vice chairmen,(Art Torres and Duane Roth) and CIRM President Alan Trounson. The transcript of that session can be found here.

While Klein has not had a formal evaluation during his tenure, directors discussed his performance  during the closed-door session in which they set his salary. Publicly, directors are generally effusive in their praise of Klein. Privately, some are not entirely happy. But it is clear that Klein has been the dominant force – which is probably an understatement – at CIRM since 2004.

Thursday's two-hour Evaluation teleconference meeting will begin with a public session, but is expected to promptly go into a closed-door session to deal with personnel matters(Klein's evaluation), a normal procedure permitted under state law. Following the executive session, the subcommittee is expected to reconvene and report any action that may have been taken.

Klein is a member of the Evaluation Subcommittee but is expected to recused from deliberations involving him.

'Armageddon' and Klein's Salary

The new salary for the chairman of the California stem cell agency, Robert Klein, has caught the attention of Nature magazine, which headlined its article on the subject: "Salary for CIRM head despite deficit, Outcry as stem cell agency puts chairman on payroll."

Erika Check Hayden wrote that CIRM directors approved the $150,000, halftime salary "even as the state plunges deeper into financial crisis." The term "financial Armageddon" also was quoted as coming from Gov. Arnold Schwarzenegger, who had expressed "deep concern" about the possibility of a salary prior to its approval last Wednesday by directors.

Nature magazine says it has 377,443 readers worldwide, mostly senior scientists and executives.

CIRM Directors To Define Vice Chair Job and Executive Evaluation Process

Directors of the $3 billion California stem cell agency expect to add some finishing details next week to employment arrangements with its chairman, Robert Klein, along with those of the vice chairman and the president.

On Monday, the directors' Governance Subcommittee, chaired by former Hollywood studio executive Sherry Lansing, will consider how they intend to evaluate the performance of Klein, CIRM President Alan Trounson and whomever fills the now-vacant vice chairmanship of the board of directors.

Last week, the board decided the position of chairman is a halftime job and agreed to pay Klein $150,000 a year. Klein, a multimillionaire real estate investment banker, said current economic conditions had compelled him to seek a salary. Klein had worked for free during the last four years.

At its meeting at UC Irvine last week, the CIRM board deftly sidestepped potentially negative fallout from from the pay matter. The issue had become somewhat charged after Gov. Arnold Schwarzenegger expressed "deep concern" concerning the salary reports.

Under CIRM's salary ranges, if Klein were to serve fulltime, he would be entitled to as much as half-a-million dollars-a-year, which could raise PR and policy issues at a time when California is facing an economic crisis.

In an interview Tuesday, Lansing said Klein is entitled to fringe benefits provided to all state employees but that he will not receive performance awards or merit pay under the compensation plan for CIRM employees.

Actions next week on the vice chairman's position could also help to determine who is likely to fill that slot. Next year, CIRM directors will choose a vice chairman between two candidates: Art Torres(left photo), currently head of the state Democratic Party, and Duane Roth(right photo), who currently serves on the CIRM board and is head of Connect, a San Diego businesses development organization with close ties to the life science industry.

Lansing said that the subcommittee will discuss duties of the vice chairman and what his responsibilities are likely to involve. One question that may come up is whether the board should approve a salary for the job. CIRM salary ranges provide for $180,000 to $332,000 for the position.

Roth says he will not seek compensation as vice chairman. Torres says he will need a salary.

Teleconference locations for the meeting where the public can sit in and comment are available throughout the state: San Francisco, Los Angeles, Stanford, Sacramento, La Jolla and Irvine. The specific addresses can be found on the agenda. They may change or increase before the Monday meeting so it is good to check in advance.

Klein's Salary: News Coverage is Modest

IRVINE, Ca. -- Approval of a $150,000, half-time salary for CIRM Chairman Robert Klein generated light news coverage both Wednesday and today.

The San Diego Union-Tribune actually had a reporter, Terri Somers, on the scene here in Irvine, where CIRM directors met the last two days. It was the only mainstream media outlet to cover the session, which included more far-reaching decisions than salary matters, such as an aggressive plan to spend $210 million to push development of clinical therapies.

Somers' story quoted Klein, Duane Roth, who has been nominated for the vice chairman's job, and John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., on the salary issue.

Simpson, who has looked at askance at high salaries at CIRM, said the most important matter was not the money for Klein but the fact that board defined the chairman's job as half-time. Prop. 71 gives the chairman a host of responsibilities, some of which conflict with the president's. Klein also has very much acted as an executive chairman, including micro-managing details at CIRM, according to some observers.

Other stories were written by Shane Goldmacher of The Sacramento Bee and Ron Leuty of the San Francisco Business Times. Here are links to Leuty's story and Goldmacher's account.

The continuing light news coverage of CIRM is a sign of the hard economic times at the mainstream media, particularly newspapers. It also reflects the declining novelty factor at CIRM. The organization was created four years ago by voters and now is approaching the news value level of nearly all state agencies. And that is virtually nil.

Traditionally state agencies, with rare exceptions, are all but ignored by the mainstream media. Given the difficult decisions news organizations currently must make concerning deployment of ever declining resources (reporters), coverage of CIRM is certain to shrivel in the future. The exception would be a scandal or a major scientific breakthrough.

CIRM Issues Statements of Praise for Klein

The California stem cell agency has released statements praising California stem cell Chairman Robert Klein in the wake of today's decision by CIRM directors to pay him $150,000 for half-time work.

The following came from George Daley, former president of the International Society for Stem Cell Research and associate professor at Harvard Medical School.

"I am happy to say that Bob Klein has not only been the major driving force behind expanded funding for stem cell research within California, but he has been a tireless booster for stem cell research internationally. By the sheer energy and dedication to his cause, Bob is remaking California into the international center for stem cell research. In my recent visit to major laboratories at UCSF and UCSD, I saw first hand how the Prop 71 funding is changing science for the better. I have no doubt that in the future, when we look back on the prime drivers of the revolution in stem cells, we'll have to all acknowledge Bob Klein's profound contributions."

The following came from Richard Murphy, who served as a consultant and interim president for CIRM as well as a member of its board of directors:

"As a member of the ICOC and as Interim President of CIRM, I witnessed first hand Bob Klein's incredible commitment to the stem cell initiative in California. He brings together business expertise, an entrepreneurial spirit, and a fierce commitment to use stem technology to improving the health of people with incurable diseases. He has spent countless hours during the day, nights,and weekends bringing all the complex parts of this initiative together, and without him Proposition 71, CIRM, and California's world leadership of stem cell research would not exist. I feel privileged to know him and to have worked with him. Given his commitment to this cause, there is no question he will continue this work in the future, as CIRM encounters the inevitable challenges that will arise. California and the world are fortunate that Bob Klein has done what he has, and I am confident he will continue to work in the future towards the benefit of all of us."

CIRM Board Approves $150,000 Salary for Chairman Klein

The board of the California stem cell agency today approved a $150,000, half-time salary for its chairman, Robert Klein, who has served in that position for four years, working without pay.

Board members said that it was impossible to compensate Klein sufficiently for his contributions to the agency. They said the salary was based on what they believed was dictated by the nature of the position – not the individual.

The salary was approved on a unanimous voice vote by the board, which gave Klein a standing ovation prior to approving the salary.

The CIRM pay range provides for a salary as high as half-million dollars annually for the chairman. Gov. Arnold Schwarzenegger last week expressed "deep concern" about reports concerning the salary.

Klein, who owns a real estate investment banking firm, has said he can no longer afford to donate his time.

The only critical voice on the salary came from a member of the public, patient advocate Don Reed, who said it was not nearly enough.

CIRM board member Claire Pomeroy, dean of the UC Davis School of Medicine, said the decision on Klein's salary was not related to a vacancy in the vice chairmanship position. That position is entitled to a salary as high as $332,000.

Two candidates for the job have been nominated -- Duane Roth, who will not accept a salary, and Art Torres, who needs one. That position will not come up until next month at the earliest.

California Governor Nominates Roth as CIRM Vice Chair

IRVINE, Ca. -- Gov. Arnold Schwarzenegger has nominated a San Diego biotech veteran as vice chairman of the $3 billion California stem cell agency, setting the stage for a contested election between him and the chairman of the state Democratic Party.

Terri Somers of the San Diego Union-Tribune late Tuesday reported the nomination of Duane Roth(see photo), who now sits on the board of directors of the agency. He says he would not accept a salary, which could run as high as $332,000 annually. Art Torres is the other candidate and has said he needs a salary, but we have been told he thinks a figure of $332,000 would be excessive.

Roth is the head of Connect, a group that assists start-up tech companies. Torres is a veteran politico and former state lawmaker.

Somers quoted Schwarzenegger as saying in a letter to the CIRM board:

"'As I'm sure you already know, Duane is a hard-working board member who has long been an advocate for stem cell research and active member of the life sciences community. He is thoroughly familiar with (the California Institute for Regenerative Medicine) and his elevation to the vice-chair position would promise a seamless transition."

Somers wrote:

"The governor first nominated board member Claire Pomeroy, vice chancellor for human health sciences at UC Davis and dean of its medical school, for the vice chairman post. But Pomeroy asked that her nomination be withdrawn, citing time constraints and a desire to avoid potential conflicts of interest because UC Davis programs are eligible for institute funding."

The vice chairmanship is currently vacant after Ed Penhoet, a multimillionaire businessman, resigned to take a non-paying position on the CIRM board. Penhoet has never taken a salary for his CIRM work. Nor has CIRM Chairman Robert Klein, also a multimillionaire businessman.

However, CIRM directors are scheduled today to act on a salary request by Klein, who says he can no longer afford to work for free. It could place Klein in an awkward position to accept a salary while the vice chairman goes unpaid.

The CIRM board is not expected to make a decision on the vice chairmanship today.

Torres Says He Needs Salary From CIRM

IRVINE, Ca. -- Art Torres, chairman of the California state Democratic Party, says he will need a salary if he is to serve as vice chairman of the $3 billion California stem cell agency.

In an item by Shane Goldmacher for Capitol Alert, the online service of The Sacramento Bee, Torres was quoted as saying:

"'I do need a salary because I am not a wealthy person,' he said, adding that 'what that compensation should be is up to the board.'"

The vice chair is eligible for as much as $332,000 annually.

Goldmacher also reported:

"He (Torres) touted his connections - he was first elected to the Assembly in 1974 - as beneficial for promoting the mission of the stem-cell agency.

"'That's over 34 years of relationships and experience that is important to communicate the needs of this mission,' he said.

"Torres is also building upon those connections to win the vice-chairmanship. (Lt. Gov. John) Garamendi's nomination letter states that Assembly Speaker Karen Bass, Senate President Pro Tem Darrell Steinberg, and Speaker of the House Nancy Pelosi have all endorsed Torres for the post.

"Torres appears to have some support on the board, as well.

"'I'm keeping an open mind, but (Torres) is well-qualified for this position,' said David Serrano Sewell, who fills the patient advocate slot for multiple sclerosis on the stem-cell panel. 'He has the legislative, business and volunteer experience. Just as important he has the relationships with legislators in Sacramento and Washington D.C., built over 20 years, that will greatly benefit our mission.'"

$1.3 Million Price Tag on CIRM Chair and Vice Chair Compensation

IRVINE, Ca. -- An executive salary deal involving CIRM Chairman Robert Klein and a paid vice chairman, quite likely the man now heading the state Democratic Party, could cost the California stem cell agency something on the order of $1.3 million a year.

That includes $840,750 in salary and 50 percent of that figure to cover fringe benefits for both men. The $1.3 million total also assumes that both Klein and the vice chairman receive the top end of the salary range for those positions: $508,750 for Klein and $332,000 for the vice chairman.

Art Torres, head of the state Democratic Party, veteran politico and former state lawmaker from the Los Angeles area, has been nominated by state Treasurer Bill Lockyer to fill the vice chairman slot. Torres apparently has the support of two other state constitutional officers, who are the individuals who nominate vice chair candidates. Gov. Arnold Schwarzenegger, who has expressed "deep concern" about the executive salary proposals, has not yet announced his nominee.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., said he has heard that Torres will expect a salary. Torres' term as chairman of the Democratic Party expires in April. According to what Simpson has been told, Torres would work for free until that date.

We have queried Torres concerning the matter and will carry his comments when we receive them.

The CIRM board votes on a vice chairman from among the nominees put forward by the state constitutional officers. A contested election, involving a candidate who would not accept a salary vs. one who would, could put Klein in an awkward position. His salary is likely to be approved by CIRM directors meeting here this afternoon and Wednesday, and it would be unseemly to have the multimillionaire chairman taking pay while the vice chairman does not.

The actual vote on the vice chairmanship is not expected any sooner than late January or possibly later.

Based on the last figures we saw for the CIRM budget, it does not appear to include funds for compensation for the chairman and vice chairman.

State Democratic Party Chief Nominated as CIRM Vice Chair

The head of California's Demoratic party, Art Torres, has been nominated as a candidate for the vice chairmanship of the state's $3 billion stem cell agency.

State Treasurer Bill Lockyer, also a Democrat and Torres colleague, offered the former state legislator to fill the post, which carries a salary range of $180,000 to $332,000. If elected by the board, Torres would take the position vacated by Ed Penhoet, who resigned to assume a non-paying membership on the board. Penhoet did not accept a salary.

It was not clear whether Torres(see photo) would accept a salary or continue in his position as chairman of the California Democratic Party should he be elected to the CIRM post.

Terri Somers of the San Diego Union-Tribune reported on the nomination this morning. She wrote:

"The institute's board will select a new vice chairman from a group of candidates nominated by the state's constitutional officers. Torres said yesterday that he also expect to be nominated by Lt. Gov. John Garamendi and Controller John Chiang."

In a letter Friday to CIRM Chairman Robert Klein, Lockyer said,

"Art has always been a champion for funding basic scientific research, including early funding for AIDS research. After leaving public office, he continued his patient advocacy serving on the boards of the AIDS Healthcare Foundation and OneLegacy organ transplant foundation. As chair of the California Democratic Party, he led it in endorsing Prop. 71 and ensured the measure was prominently highlighted in campaign material to over a million California voters."

Torres had a 20-year career as state senator and assemblyman, representing an area in Los Angeles. His leadership positions in the Legislature included chairmanship of the Assembly Health Committee.

Klein Says He Can't Afford to Work for Free

California stem cell Chairman Robert Klein, a multimillionaire real estate investment banker, says he can no longer afford to donate his time to the state, according to the San Diego Union-Tribune.

His comments came Saturday in a story by reporter Terri Somers that said "market conditions" have led Klein to seek a state salary after working without pay as the chairman of CIRM since December 2004. The salary could range as high as a half-million dollars a year.

Somers wrote:

"He (Klein) said that in consideration of the current economic climate, he would continue to provide at least 15 percent of his time to the institute for free. He said his institute workweek has always surpassed 40 hours and will continue that way.

"Meanwhile, his financial firm has become 'my night job,' with daily responsibilities handled by its staff.

"Klein's salary has already been discussed by the institute's governance committee, but that figure has not been made public."

CIRM's directors will hold meetings Tuesday and Wednesday in Irvine during which the question of Klein's compensation will come up. Gov. Arnold Schwarzenegger late last week wrote directors, expressing "deep concern" about the Klein salary plan.

The bottom end of the salary range for chairman stands at $275,000 and the top at $508,750. CIRM President Alan Trounson, who does not sit on the 29-member board of directors, receives $490,000.

Another member of the board of directors, the vice chairman, is entitled to a salary ranging from $180,000 to $332,000. That post is vacant after Ed Penhoet, another multimillionaire who did not accept a salary, resigned to take a non-paying membership on the CIRM board.

Somers wrote,

"Reportedly, Schwarzenegger will nominate a candidate who does not need to take a salary, while the lieutenant governor, treasurer and controller are expected to nominate a candidate who would need a salary, said Robert Klein, chairman of the state stem cell institute."

Somers is the only mainstream media reporter to write about the Klein salary issue. Meanwhile, Wesley Smith, a bioethicist at the Discovery Institute, commented about the proposal on his blog, saying,

"This smacks of the sense of entitlement and hubris among the big shots and well connected that is utterly ruining the country.

"Well, the CIRM shouldn't be Klein's personal fiefdom. Rather than pay Klein a half million, let's show him the door instead."

Gov. Schwarzenegger Concerned about $500,000 salary for CIRM Chief

California Gov. Arnold Schwarzenegger has expressed "deep concern" about a proposal to pay the chairman of the California stem cell agency as much as half-a-million dollars a year.

The letter from the governor to the CIRM board of directors comes as the state faces a $28 billion budget crisis and is cutting aid to the poor and elderly. Legislation was also introduced this week to freeze salaries of state employees who make more than $150,000 a year.

In the Dec. 4 letter, Schwarzenegger, who considers CIRM "one of California's greatest endeavors," said that he would soon nominate a candidate to fill the position of vice chairman of its board. He told CIRM's directors,

"I am also writing to share my deep concern about reports that you plan to consider compensation for the chairman and the vice chairman. CIRM has a responsibility to spend taxpayer money with great care, so I urge you to ensure that compensation for these positions is offered only if and to the extent absolutely necessary to implement its position."

It was unclear what specifically generated the letter. The proposal to pay CIRM Chairman Robert Klein has received little attention. Prior to the governor's letter, the only reports about it have come here on the California Stem Cell Report and on a link to our item on Capitol Alert, the online service of The Sacramento Bee.

If CIRM were a normal state agency, the governor could stop the pay increase. However, CIRM is enshrined in the state Constitution as the result of the ballot initiative that created it. The agency is immune to fiddling by either the governor or the legislature. Neither of those two parties can halt the constant stream of state bond funding to CIRM.

Schwarzenegger's letter also seems to reflect a lack of knowledge about pay at the Golden State's $3 billion stem cell agency. The chairman and vice chairman have always been entitled to a salary. However, Klein and former vice chairman Ed Penhoet have declined to accept pay since December 2004. Both men are multimillionaires. Penhoet recently resigned as vice chairman, but continues to sit on the board, which will vote to select a new one once the nominees are named.

For some months, Klein has mentioned that he would be seeking a salary. However, his current timing seems to be off, given the state's economic crisis. Deserved or not, high salaries and pay increases for government workers can trigger intense and hostile public reaction even under the best of circumstances. In contrast, much more significant financial issues can stimulate no response. That's because salaries are personal and easy for the public to understand.

Klein's salary proposal comes up at next week's CIRM board meeting in Irvine. CIRM posted the governor's letter as part of the agenda.

(The Niche, Nature magazine's stem cell blog by Monya Baker, carried a link to our report on the salary matter on Dec. 5.)

CIRM's Klein Deserves a Salary

In February 2006, Robert Klein, chairman of the $3 billion California stem cell agency, testified in court that he did not consider himself a state employee.

The justification appeared to be that he did not accept a salary and has not since beginning his state stem cell work in December 2005.

That appears to be ready to change. Next week, he is going to seek a salary that could run upwards of half-million dollars a year. The move raises anew questions about his role with his private lobbying stem cell lobbying group. It also raises questions about whether it is possible for him to devote sufficient time to his state responsibilities and also continue to run his real estate investment banking firm in Palo Alto, Ca.

As of this morning, CIRM has yet to post on its agenda for next Tuesday and Wednesday any supporting material concerning the salary request or the conditions under which it would be granted.

Klein holds his post as chairman as the result of a vote of the 29-member board of directors, who may want to establish some clear ground rules for Klein along with approving a salary. Technically he may not even need a vote of the board to draw a salary since he is entitled to one as chairman. However, it would be impolitic to take a salary without running the matter by the board of directors.

Klein's salary move has drawn some reaction from longtime CIRM observers. John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., told the California Stem Cell Report:

"If Bob Klein is working full-time as chairman of the ICOC(CIRM's board of directors) he deserves a salary. The question is how much. A sensible benchmark would be what the director of the National Institutes of Health makes -- $191,300. Round it off to $200,000. More than that is inappropriate and, in fact, would be outrageous in these economic times.

"Klein at his own choice donated his time since CIRM was launched. Californians owe him thanks for that gesture. However, it also allowed him to say he was not a state employee. If he takes a salary, he clearly is a state employee and needs to act accordingly in every respect. Receiving a salary should prompt a close look at Klein's non-CIRM activities and just how much time he spends on the job."

Jesse Reynolds, director of the Project on Biotechnology in the Public Interest at the Center for Genetics and Society in Oakland, Ca., said,

"Chairman Klein's large proposed salary, making him the second highest state employee, is symptomatic of the CIRM's exemption from California's civil service laws - a provision that Klein himself wrote into the state's constitution via Proposition 71. What's gone less examined is that he quietly dropped his promise to serve only the first three years of his term, a promise made when he first assumed office to assuage concerns of potential power-mongering."

The news about Klein's salary has drawn little media attention. The only item we have seen came on the Capitol Alert section of The Sacramento Bee's website. Two readers filed extremely hostile comments in connection with the item.

Klein, who is a multimillionaire, is to be lauded for working without pay for the state of California for nearly four years. He has brought considerable energy and talent to a worthwhile endeavor. In decades of following California state government affairs, I cannot recall another case that comes close to Klein's example. If he will be working fulltime in his role as chairman, he merits a salary and should be well paid.