A $5 million gift from the former chairman and chief executive officer of Southwestern Energy Co. will create an endowment to support the president of the University of Arkansas System.
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Charles Scharlau's gift will be made in installments. While the endowment principal will not be spent, returns, once available, may be used to boost the president's compensation as well as pay for travel expenses and training for administrative staff, among other uses, said UA System President Donald Bobbitt.
Bobbitt said once fully funded, the new endowed chair in presidential leadership might provide $220,000 yearly to support the president's office.
Scharlau, who served 10 years on the UA System board of trustees from 1997-2007, announced his gift at a meeting of the board of trustees Friday at the University of Arkansas at Little Rock.
"If we're going to have a system, let's have a strong one," said Scharlau, 88, emphasizing a need to improve efficiencies systemwide.
A separate action by the trustees boosted Bobbitt's annual pay by $72,500, which is effective retroactively to the July 1 beginning of the fiscal year. He now earns $500,000 yearly.
Ben Hyneman, chairman of the board of trustees, said Bobbitt's pay increase had nothing to do with Scharlau's gift.
The board unanimously approved Bobbitt's pay increase after a motion made by trustee Morril Harriman.
"Dr. Bobbitt gives us great value both for this system and this state," Harriman said in an interview.
Harriman's motion called for awarding Bobbitt a $36,250 pay increase offered last year by the board, but declined by Bobbitt, plus an additional yearly pay increase in the same amount.
In an interview, Bobbitt called the board's move unexpected. He said his yearly compensation remains within an allowable range as established by state legislators for certain publicly funded positions.
Arkansas law allows for "exceptionally well-qualified academic personnel" holding certain types of jobs to receive up to 25 percent more than maximum public salary limits set by the state for a given position, so long as that, for an institution, these individuals receiving higher pay collectively make up no more than 10 percent of the positions.
In practice, some university positions receive compensation even above these limits, with foundation or private funds making up the difference.
Bobbitt said his compensation falls within the 25 percent.
The endowment allows the system president's pay to be increased beyond state limits. The president's pay is set by the UA System board of trustees.
University systems may be organized differently, but compared with two bordering states, Bobbitt's pay before his most recent raise was below that of other system presidents, based on published reports.
Timothy Wolfe, president of the University of Missouri System, earned $459,000 during 2014-15, according to information compiled by the St. Louis Post-Dispatch.
Joseph DiPietro, president of the University of Tennessee System, earned $486,378, according to a 2014 Huffington Post report on analysis done by The Chronicle of Higher Education.
But pay for the UA System president has increased significantly since 2010-11, the final year of former UA System President Alan Sugg, who earned $294,953 in annual salary in his final year on the job, according to information provided by the UA System.
Scharlau spoke in particular about concerns with rising costs, including health care costs, and ways campuses can work together to better negotiate contracts such as energy deals.
"There's no reason not to combine the energy needs of all the institutions and contract for it as one instead of each individual institution doing it," Scharlau said.
He received a standing ovation from the board and those in attendance.
In an interview, Scharlau praised Bobbitt, who he said taught his daughter when Bobbitt was teaching at the University of Arkansas at Fayetteville.
"I think he's a guy who can lead and make these changes, and people are going to have to change the way they've been doing things to drive down costs, and we need to drive down health care costs," Scharlau said.
Of his gift, he said: "My thought was, we've got to have strong leaders to do it."
Bobbitt, in an interview, called Scharlau's gift "amazing," describing how Scharlau approached him with the idea about four or five months ago.
"It may be that I'm out of this office before the endowment is fully realized, and that's OK," Bobbitt said. "You want to leave an institution or an operation better than you found it, and so it doesn't really matter to me what the time frame is. I just know that at some point in time, the system office and the University of Arkansas System, with all of its pieces, is going to be better off with this gift."
Metro on 09/12/2015