Western Board of Governors Chair Chirag Shah applauded the “conclusions and clarity” offered by a recently released independent investigation into Western’s presidential compensation practices. His optimism, however, did not tamp down criticism from campus labour leaders, who continue to question university leadership on the issue.
“Overall, (Stephen Goudge) has provided us with a broad base of recommendations on how to manage both the terms and conditions of these types of contracts, as well as the governance of these contracts and consultations as we go forward,” Shah said Tuesday.
Released Monday, the Review of Presidential Compensation Practices at the University of Western Ontario – or what has become popularly known as the Goudge Report – refocused the university community’s attention of the last five months back on the original subject of debate – President Amit Chakma’s monetized leave.
In the report, Goudge, a former Ontario Court of Appeal justice, called for an end to monetizing administrative leave for university presidents, and raised questions about the process by which that payment came to be for Western President Amit Chakma. The report outlined a number of recommendations on everything from defining administrative leave to Board transparency.
The Board received and accepted the report and committed to implementing the recommendations during its Sept. 22 meeting.
“For the Board, the key takeaways included the fact that the contract was negotiated in good faith by all parties and we were very satisfied with his findings overall on the university environment,” Shah continued. “Our president is fairly compensated compared to his peers – (Goudge) did note 15 out of 16 contracts in Ontario include an administrative leave provision. There are a number of details on how those provisions are administered, but we are not unique in the monetizing. It is rare with only a few of the contracts including that clause – but Western is not the only one.”
Chakma’s contract called for one year of administrative leave to be earned over the course of a five-year term of service. During that leave, he would earn his base salary. Goudge found this contract component “very common” in other presidential contracts and, as Shah noted, 15 of 16 Ontario university presidents have a similar arrangement.
Goudge called Western’s presidential compensation “in line with those of its peer institutions.”
However, the ability to monetize that administrative leave earned for his first term, and to do so at the start of his second term, was “not in line with the practice at most peer institutions,” Goudge stressed. Only a few institutions allow that step. One of those is Chakma’s former employer, the University of Waterloo.
The report stated:
“In other words, the right to monetize earned administrative leave on renewal of an administrative term is rare among Western’s peer institutions. Indeed, many of those institutions presume or even require that administrative leave earned during a first term of service not only not be monetized, but be deferred to be taken at the end of any renewal term.
In addition, several institutions explicitly emphasize that administrative leave has a purpose beyond salary and spell out that purpose, for example to permit return to the academic and scholarly responsibilities of the individual.”
The Board chair sees value in Goudge’s call for rigid definitions of administrative leave.
“Mr. Goudge has provided us clarity – great clarity – on what he views administrative leave to be in light of presidential or executive positions,” Shah said. “He provides us a great backdrop on how that leave should be spelled out as clearly as possible in future contracts and on what that leave is to be used for. He has an excellent set of recommendations to avoid any future confusion.”
The Goudge Report made a reference as to why Shah and Chakma sought to change the initial contract to allow the president to take his leave in the form of cash payment rather than deferring to the end of his second term. Goudge attributed the move to a desire “to provide Dr. Chakma with means to enhance his pension contributions.”
Although Goudge said Shah “acted entirely appropriately – he just wasn’t fully informed,” questions have arisen from this particular phrase – leading some to claim it was an attempt to “pad” or “boost” the president’s pension.
Shah, however, contends the move was a matter of seeking balance.
During negotiations to recruit Chakma to become Western’s 10th president, the Board attempted to “essentially replicate his contract from Waterloo,” Shah explained. One of the challenges of that task was that Waterloo works on a defined benefit pension plan while Western works on a defined contribution plan.
In a defined benefit plan, an employer guarantees a specified monthly benefit amount in retirement. A defined contribution plan, however, only guarantees employer contributions to the account. Future benefits depend upon investment returns.
That created a chasm between Western and Waterloo that was impossible to bridge.
“We were unable to provide that same level of guarantee on income when Dr. Chakma came across,” Shah continued. “However, there was an attempt by our former Board chair to provide some wording that committed us to closing that gap. Dr. Chakma continues to be under a pension deficit with respect to the original negotiations of the contract. That is a gap that we are unable to address. I don’t believe we have the opportunity or the avenue.”
Since April 2, Kristin Hoffmann, University of Western Ontario Faculty Association (UWOFA) president, and her constituency have been outspoken in their lack of confidence in both Chakma and Shah. The Goudge Report did little to quell that call.
“This really does show that this is the time for governance change at Western. UWOFA has been saying since that spring that this wasn’t a regular arrangement; the report from Justice Goudge confirms the irregularities of the arrangement,” Hoffmann said, while stopping short of asking for Shah to step down.
“Our members may ask for that,” she said. “But the fact there was what looked like a secret deal at the top of the university’s hierarchy flies in the face of collegial governance, shared governance, which is what the university is founded on. We need a return to collegial governance, shared governance and putting the faculty, librarians and archivists, who are at the centre of the university, back at the centre of the university’s decision-making process.
“There clearly needs to be more transparency. For us, this raises questions of trust in the Board of Governors and senior leadership. They need to do something to address the lost trust in the campus community.”
Meg Perinpanayagam, University of Western Ontario Staff Association (UWOSA) president, said the Goudge Report’s findings raise more “concerns and questions, than satisfactory answers.”
“We were surprised the chair of the Board of Governors solely negotiated an amended contract with President Chakma without the approval of the Senior Operations Committee, who, in turn, has the responsibility of the contract, and was ignorant to the fact that it had occurred,” Perinpanayagam said Tuesday. “Justice Goudge’s findings also called Shah’s actions a ‘simple misunderstanding.’ We were also surprised to learn that the chair of the Senior Operations Committee – who also is the chair of the Board of Governors – took the extra step to seek legal counsel externally. This action could be viewed as calculated or deliberate to circumvent the process.”
Perinpanayagam also questioned how Chakma could negotiate a double payment at the same time the university was asking to freeze unionized employment compensation.
“Mr. Shah said on April 1 that ‘in this time of fiscal uncertainty and restraint in the postsecondary education sector, Western’s Board of Governors is highly sensitive to the concerns expressed by members of the Western community and the wider public,’” Perinpanayagam continued. “This is the same man who approved, without his own Board’s knowledge, a negotiated double cash payment to enhance the President’s pension.”
Perinpanayagam said UWOSA maintains its non-confidence in the leadership of Chakma and Shah.
“We believe that in order for the university to move forward, Western’s administration and governance should be transparent, responsible, and accountable,” she concluded.
As for compensation, President Chakma is in the process of returning the salary paid to him for the administrative leave. Due to details of the Public Sector and MPP Accountability and Transparency Act, 2014, the Board was unable to structure a lump-sum refund. Instead, Chakma is forgoing his presidential salary for this year.
The president will still be owed two years leave at the end of his second term. How that leave is compensated will depend on what the president decides to do – return to academia, retire, take another position elsewhere, etc.
Shah is pleased to have this milepost in the rearview mirror.
“This is one deliverable who hoped to get in place as quick as possible so we can move forward as an institution,” he said. “We are really happy to put it to a close and continue to stand behind our president and the great progress Western has made on its Strategic Plan.”
The Board will continue the process of redrafting its policies to align with the recommendations at future meetings.