Community college study relied on flawed data, methodology

Jun 8, 2016 at 11:44 am
Community college study relied on flawed data, methodology

The president of Kentucky’s community college system pulls in $375,000 annually, a paycheck that’s right on the money when compared with similar institutions, at least according to a school-funded consultant’s report.

Consultant Lyle Hanna briefed a few members of the Kentucky Community and Technical College System board of regents last week on his comprehensive review of President Jay Box’s pay. Hanna’s review, funded by KCTCS, found Box’s compensation is very close to the average of his peers:

“Amazingly,” Hanna said, “right on the target.”

In hitting that target, though, Hanna relied on flawed information, including a cherry-picked group of peers, and data that doesn’t exist yet.

Among the issues in the report: It compares the leader of the community college system to large public university systems; it includes salaries for this year that Hanna’s staff estimated; and it uses figures for high-paid Kentucky presidents that the consultant knew did not reflect their actual pay.

The compensation report comes amid widespread criticism of perks the regents gave its former president, Michael McCall, who retired in January 2015, and received more than $800,000 last year to serve as president emeritus. Of that, nearly half was for unused vacation days, according to a pay breakdown obtained by the Kentucky Center for Investigative Reporting.

Legislators have asked for hearings on college executive compensation, and faculty and staff have expressed outrage as news of the payouts coincided with the college system eliminating more than 500 jobs.

KCTCS hired Hanna Resource Group for $100,000, which also pays for an evaluation of faculty and staff pay that has yet to be released.

P.G. Peeples, chair of the KCTCS compensation committee, said he would bring the information to the next meeting of the full Board of Regents.

“This is very valuable and very necessary information,” Peeples said.

Hanna, the chief executive officer of Hanna Resource Group, said they used a large swath of comparisons and secured “a lot of data.”

But some of the data is problematic.

Hanna’s report relied on an average of four different surveys, without any weights for cost-of-living differences.

Thomas Hyatt, general counsel for the American Association of Governing Boards of Universities and Colleges, said he would be concerned about any study that didn’t weigh factors like the seniority of the president, the salaries in the region and the level of education provided at the institution.

“If you haven’t done that, then the analysis is incomplete and worst case, it’s erroneous,” Hyatt said.

Hanna said he used the Chronicle of Higher Education’s parameters in deciding peers. But four of six peers listed as comparable community college system leaders were the University of Nebraska, University of Wisconsin, University of Hawaii and California State University systems.

KCTCS’s campuses offer two-year degrees exclusively.

Hanna said he got the peers and 2015-16 base salaries from the Chronicle’s website. But the most-recent data on the Chronicle website is from 2014.

Joshua Hatch, the Chronicle’s assistant managing editor for data and interactives, said the Chronicle’s algorithm is not built with consultant’s reports in mind. “It really is about providing accountability for public colleges about how much taxpayers are paying,” Hatch said.

Hanna’s report contains other inaccuracies. For example, the University of Nebraska president named left that system in 2014, and Hanna’s report includes salary information for 2016 that’s about $83,000 below what the current president makes.

Hanna “aged” the 2016 data by arbitrarily increasing the previous year’s numbers by 2 percent.

His version of the Chronicle’s peer list also left out the three highest earners. Their inclusion would’ve have bumped the average compensation of the group up by $65,000.

A comparison to other Kentucky presidents, which Hanna said was collected directly from the institutions, put Box’s pay below average. But that measure also put the state’s highest paid president below the average.

The survey used University of Louisville President James Ramsey’s base salary of $360,283 despite numerous reports that Ramsey took home $2.4 million in 2014 through a dual role with the University of Louisville Foundation.

Hanna said his company couldn’t verify those numbers, and anyway, using the larger figure for Ramsey would have put the average “through the roof.”

Box fares well when compared to other community college system presidents. The consultant’s report shows Box’s total compensation puts him No. 5 of 16 — about $77,000 a year above the average for that group.

The Board of Regents will meet this week and will decide whether to offer Box a raise.

Reporter Kate Howard can be reached at [email protected] or (502) 814.6546