Why the UNC System president is getting an extra $450K on top of his $400K salary

The UNC Board of Governors has unanimously approved a $451,200 one-time payment for UNC System President Peter Hans. This incentive payment comes on top of his annual base salary of $400,000.

When Hans was hired in 2020, he accepted a salary below his predecessors, but with the opportunity to get an incentive payment of up to $600,000 based on his performance, The News & Observer reported at the time.

Hans’s performance was measured through a compensation program based on specific quantitative and qualitative performance goals set by the Board of Governors, board Chairman Randy Ramsey said at a meeting Wednesday. In early June, the board’s presidential assessment committee conducted an annual assessment and unanimously agreed the president continued to do an “exceptional job,” Ramsey said. Hans had a 70% effectiveness rate based on these metrics, Ramsey said.

The vote on the payment was then brought to the board and approved Wednesday based on the committee’s recommendation. The Board will undertake the next assessment of the president next summer, Josh Ellis, UNC System spokesperson, wrote in an email to The N&O.

Praise for Hans

Ramsey did not return a phone message from The N&O, but at the meeting, he highlighted some of Hans’s achievements. Those include having the system offer in-person campus instruction during the entire academic year despite COVID-19, and advocating in the General Assembly, which passed some of “the most successful back-to-back state budgets we’ve ever seen” for the UNC System, Ramsey said.

Ramsey also highlighted Hans’s initiatives such as Project Kitty Hawk, which looks to expand access to higher education for adult learners, and implementing a budget process that “brought increased transparency to both the campus and system office budgets.” Called an all-funds budget process, it is supposed to account for all revenue sources and set a plan for revenue and spending.

Ellis shared summary reports of the major accomplishments of Hans’s first and second year in office, which the presidential assessment committee reviewed. The reports highlight his leadership in the office and in the system, his implementation of safety preparedness measures, fiscal controls and oversight, as well as efforts to increase enrollment and retention, affordability and student health and mental health.

“Our goals around reducing student debt, improving on-time graduation, and keeping costs under control are all purposefully ambitious, and the University has made major progress in meeting them. Linking leadership pay to measurable performance helps ensure our continued progress on behalf of students and the state,” he wrote.

Critics of UNC System

For Michael Behrent, president of the North Carolina conference of the American Association of University Professors, the payment “is clearly excessive and unwarranted. Particularly at a time when faculty and staff morale is so low in the UNC system and in which there is such great concern about faculty salaries not keeping up with national standards.”

The AAUP is a nonprofit organization with chapters and members in colleges and universities across the country.

“I do not think that the UNC system is going in the right direction,” said Behrent, who pointed out findings from an AAUP report released in April. The report described political interference undermining shared governance and academic freedom, as well as institutional racism.

“I am not interested in holding Peter as personally responsible for any of that,” Behrent said. “I would just note that this is happening under his watch. So I don’t think that he has directed the university in the right way.”

Model for other universities?

For Deb Aikat, a professor at the UNC Hussman School of Journalism and Media, Hans’s “hefty, performance-based bonus” is an appropriate reward for his success in fulfilling the incentive-based contract and in line with his meeting 70% of performance metrics.

“In many ways, such performance-based bonus can, arguably, emerge as a model for other universities nationwide,” Aikat wrote in an email to The N&O.

Still, Aikat added in an interview, Hans hasn’t made many major decisions, with the exception of a controversial change to how chancellors are chosen. Under that policy, the president can nominate chancellors for each of the UNC System’s universities for appointment by the Board of Governors.

“At this time, it is too early to say, in my humble opinion,” Aikat said. “For heaven’s sake, he hasn’t completed his two years. Too early to judge, and I think he deserves credit for fulfilling the contract.”

Former President Margaret Spellings had a base salary of $775,000 but was granted a $90,000 incentive bonus in 2017 and another $95,000 bonus in 2018, before she quit later that same year and received a $500,000 separation package, as reported earlier by the N&O.

Hans’s immediate predecessor, interim system president Bill Roper, was paid a base salary of $775,000 and was eligible for a $77,500 annual retirement contribution, the possibility of up to $125,000 in an annual performance bonus, and a one-year research leave while paid $837,720, as reported earlier by the N&O.

Other public university systems also grant high salaries and incentives to high-ranking members. University of Michigan President Mark Schlissel in 2021 earned a base salary of $927,000. He received about a $1 million payout after being fired, The Center Square reported. Incoming University of Colorado President Todd Saliman was approved for a salary of $750,000, The Daily Camera reported. Incoming University of California System President Michael Drake was approved for an $890,000 base salary, CalMatters reported.

Previously, Hans served as the ninth president of the North Carolina Community College System, as well as a board member and later the chair of the UNC BOG. He also served as senior policy advisor to three members of the U.S. Senate.