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University of Montana President Royce Engstrom opted for a Honda Accord Sedan as his university-provided vehicle. A vehicle or vehicle allowance is nearly always provided for presidents of public doctoral universities. Photo by TOM BAUER/Missoulian

A country club membership may sound like a swanky part of a university president's compensation package, but higher education leaders say it serves a greater purpose than improving a golf swing.

"There's the saying that a lot of business takes place on the golf course, but it really does," said Sheila Stearns, Montana's Commissioner of Higher Education.

University of Montana President Royce Engstrom and many university presidents before him have received benefits above and beyond the traditional compensation package: base salary, health insurance and an employer retirement match. The presidents at UM and Montana State University receive a home to live in, a vehicle, a country club membership and a parking space on campus - a sweet package, but still considered routine for university leaders.

"I'd be shocked if there were public doctoral universities that didn't provide a residence or a residential allowance, plus a vehicle or a vehicle allowance," said Kevin McRae, associate commissioner for communications and human resources.

A university has expectations of its presidents, Stearns said. Things like a house and a car, even a country club membership, help presidents fulfill those expectations.

Stearns said college presidents are expected to host evening parties and weekend social gatherings, as well as visit with alumni across the state. Presidents also spend time networking with potential donors; sometimes those talks unfold easier on the golf course than in a meeting room.

Stearns said a university president's life is something of a social whirl, with as many as 200 gatherings a year at a president's home.

"We don't afford them much of a private life," McRae said.

***

Here's a rundown of the president's compensation package:

  • Salary: $280,000.
  • A residence in the university district that the president is required to occupy.
  • A leased or university-owned automobile with any personal use of the vehicle reported as compensation for tax purposes. (Some university athletic head coaches also receive this benefit.)
  • A country club membership of the president's choosing.
  • Access to the same health insurance packages offered to all university employees working half time or greater, and an employer contribution of $733 per month toward health insurance premiums, which is the same for all state and university system employees.
  • If the president elects life insurance and long-term disability benefits - packages eligible to all university employees - the university agrees to pay the remaining balance if and when the $733 has been exhausted.
  • A deferred compensation package of up to $50,000 per year for 10 years if the president stays in the job more than five years.
  • The same retirement plan that covers most faculty, administrators and contract professionals.
  • As for smart phones, all university administrators buy their own and then document professional use of the phone for reimbursement.
  • A parking space.

***

It's sometimes hard for Montanans who make the state's median household income of $44,000 to swallow the salary of a university president, even though it's one of the lowest in the country for institutions granting doctoral degrees. The same goes for the perks tied to the job.

Presidents of some universities are offered airplanes and appointments to corporate boards, which come with additional compensation and notoriety, Stearns said. Here, state higher education officials try to offer incentives that make sense. So no matter how much the president may like to fish, the university is not likely to write a new drift boat into the contract.

"We don't just pick things out of thin air," she said. "I don't think we offer too much or too little. I think what we do is about right."

Still, people sometimes raise an eyebrow at a golf club membership. Stearns would rather increase the base salary the amount of a country club membership to avoid the public perception.

"It's hard for people to understand that it has a business and educational advantage, but there's no doubt in my mind," she said. "People don't give unless they know well the person with whom they're giving. For a president, even one who doesn't golf, to get out there and spend time with men and women in the community ... building relationships, there's clear evidence, and not just in Montana" that it has a positive influence on the university they represent, Stearns said.

A quick lunch, Stearns said, just doesn't cut it.

***

The university allows each president to pick his or her own vehicle, so often that choice "depends on the personality of the person involved," said Bob Duringer, UM's vice president of administration and finance.

Engstrom opted for a fuel-efficient Honda Accord sedan. Former President George Dennison leased a Chrysler 300 with a Hemi engine.

Obviously, a Mercedes or Corvette is out of the question, but the university gets them something that suits their needs.

"(Royce) wanted a good, environmentally friendly car. George liked to go fast," Duringer said.

In fact, Engstrom went to the Union of Concerned Scientists website to get an opinion on the most environmentally friendly cars and automobile companies, he said. Honda was at the top of the list.

The university has both leased and bought vehicles in the past. Some of those cars get handed down to the motor pool when the president is ready for a new vehicle.

How often a president gets a new car depends on how much the car gets used, and every president has to provide monthly reports of any personal miles driven, a figure that is taxed as compensation.

Engstrom keeps a notebook in the car to jot down miles, but he has yet to open it.

"I haven't done anything personal in the past few weeks," he said.

***

New presidents were hired this year at both UM and MSU. It had been a decade since a president had been hired at either flagship school, and 20 years in the case of UM.

That's why the Montana Board of Regents decided to beef up the president's compensation package with $500,000 in deferred compensation, partly as a recruiting tool, but mostly to retain the presidents, McRae said. If the president stays longer than five years, they are eligible for the deferred compensation. Also, it keeps costs down for the university because turnover among university presidents is expensive.

While Engstrom's compensation package is still getting worked out, MSU President Waded Cruzado's has been set up as an insurance plan through the university foundation. No university money will go to pay for that agreement, McRae said.

"It is a long-term benefit to them," Stearns said. "It's an insurance policy purchased in such a way that the president and the university benefits. It is an advantage that many other universities across the country are doing."

Reporter Chelsi Moy can be reached at 523-5260 or at chelsi.moy@missoulian.com.

 

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