A number of fair questions have been raised following the Civil Beat Oct. 17 story, “UH Pay Increases For Top Executives Drawing Scrutiny,” including, “… where are we getting the money to pay for this?”

The funds do not come from tuition or fees, and the university did not and does not request funding for pay increases of executive and managerial (EMs) employees — also known as state excluded employees. The funding for EM salary increases is actually included and approved by the Hawaii State Legislature as a part of Hawaii’s collective bargaining process when the Legislature provides funding for union employee contracts.

The Legislature funds Hawaii Government Employees Association, University of Hawaii Professional Assembly, United Public Workers, Hawaii State Teachers Association and Hawaii Fire Fighters Association contracts and any EMs in various state agencies through the same funding bill. This is the standard process for all EM’s in every state agency, not just UH. This is the normal process that has been around for decades.

Though EMs do not receive union benefits or protections, they are attached to specific and related union bargaining units. In the case of UH EMs, they are connected to Bargaining Unit 7, the University of Hawaii Professional Assembly. Similarly, the EMs in the Attorney General’s office are connected to Unit 13.

Salary increases for EMs are included in the collective bargaining appropriation bills for the bargaining unit they are attached to. The funds for UH EM pay increases were included in the 2017 appropriations bill passed by the legislature after Unit 7 negotiated a new four-year contract with the state that was approved by the Legislature. This approach tying EM salaries to collective bargaining appropriations has been used in Hawaii since the unionization of state employees in the early 1970s.

Cory Lum/Civil Beat

There is a difference in how appropriated funds are disbursed for compensation increases. Collective bargaining increases are generally, and largely, distributed in an across-the-board methodology increasing each memberʻs base salary. UH uses a performance-based methodology for increases in EM salaries, including one-time payments for a particular year that may not increase the base.

The specific methodology and formula is reviewed and updated each year to ensure that the total cost does not exceed the funds appropriated, which was $1.1 million this year.

The methodology applies only to those EMs who were in their current position as of Oct. 1, 2018, and received a final performance evaluation rating from their supervisor of “Meets Expectations,” “Exceeds Expectations” or “Exceptional.”

Annual base salary for employees who received these ratings increased by $1,800. In addition, EMs with ratings of “Exceeds Expectations” or “Exceptional” received an annual increase to their base salary of 1% or 1.5%, respectively, plus a one-time payment of 1% or 1.5%, respectively.

According to UH policy, the standard practice for annual EM compensation adjustments also includes a provision to allow a small number of special adjustments for equity, retention, new duties assigned and/or growth in job.

‘Exceptional’ VPs

Normally, there are 10 or fewer such special adjustments representing less than 5% of EM positions. As their supervisor, UH President David Lassner determined this year that vice presidents rated “exceptional” should be included.

The UH VPs are formally designated as the core of the officers of the University of Hawaii. UH is an exceedingly complex $1.8-billion, 10,000-employee institution with facilities spread across every island. It is one of the state’s largest and most diverse organizations.

All of the VPs are compensated at rates well below their local and national counterparts.

Members of this group have contributed in exceptional ways to the ongoing improvements across the university system over the past several years. They created major cost savings and have taken on many additional responsibilities, including those associated with the ongoing reorganization of the UH Manoa campus. In some cases, in addition to their normal duties, they have assumed what had been, or would normally be, a full-time job in another institution.

Even after these salary adjustments, all of the VPs are compensated at rates well below their local and national counterparts.

Though these individuals have options for employment with higher salaries elsewhere, and are routinely contacted by recruiters or potential employers, they continue their commitments to public service and the University of Hawaii.