“Triple Win” Summer Compensation A Proposal from
Description: Triple Win Summer Compensation A Proposal from the Ad Hoc Committee on Summer Compensation for Faculty Members of the Committee Dr. Cindy MacGregor, Chair W.D. Blackman COAL Tim Flannery, CHPA Steve Foucart CFO Julie Masterson, Dean,
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slide1. “Triple Win” Summer Compensation A Proposal from the Ad Hoc Committee on Summer Compensation for Faculty<br>
slide2. Members of the Committee Dr. Cindy MacGregor, Chair
W.D. Blackman – COAL
Tim Flannery, CHPA
Steve Foucart – CFO
Julie Masterson, Dean, Graduate College
Arbindra Rimal, Darr
Timson, Benjamin CHHS
Huang, Shyang, CNAS<br>
slide3. Current System The current system of funding faculty to teach during the summer session is constrained by cost center summer budgets. Additional courses cannot be taught because the summer budgets are capped.
Faculty are limited in the number of courses they are allowed to teach during the summer based on what cost centers can afford.<br>
slide4. Faculty Handbook The Faculty Handbook prescribes faculty are paid at least 2.5% of their base salary per credit hour taught, provided minimum enrollments are met. No other exceptions to the 2.5% are allowed by the Faculty Handbook.<br>
slide5. “Triple Win” Outcomes More potential course options for students,
More potential income for faculty (through teaching more courses and sharing profits) while honoring Faculty Handbook,
More potential revenue for the university (including departments and colleges) while protecting financial costs.<br>
slide6. Other Potential Benefits Removing the cap on summer instruction could be a recruiting tool for new faculty who want to increase their income by doing summer work.
The same could be true of seasoned faculty who want to increase their “top three” years of income.
An improved summer compensation model could also be applied to intersession improving those offerings.<br>
slide7. Basic Summer Compensation Formula [(2.5% of base salary) + (2.5% of base salary x fringe percentage)
+ University Base Revenue Needed*]
/ tuition rate per credit hour
= breakeven number of students
*Committee is still working on this. This becomes the “overhead” for the breakeven formula.<br>
slide8. University Base Revenue Needed Per Credit Hour Offered Budget Goal for Summer Revenue
Cost Center Allocations for Summer Faculty Salaries
= Summer University Revenue Goal
Summer University Revenue Goal
/ Credit Hours Offered for 2018
= Revenue Goal Per Credit Hour Offered
University Base Revenue Needed Per Credit Hour Offered<br>
slide9. University Base Revenue Needed Per Credit Hour Offered $7.5 Million – $3.97 Million = $3.53 Million
$3.53 Million / Credit Hours Offered Summer 2018, i.e., 2684
= $1315. (university “overhead” per credit hour)
Thus, if the same number of credit hours were offered in summer 2019 as in 2018 the university would be guaranteed the base revenue needed, i.e., $3.53 Million<br>
slide10. Example Salary = $70,000; 2.5% of salary = $1750
Fringe = 36.7% of $1750 = $642.25
University Overhead = $1315
Total cost of a fully-enrolled class = $1750 + $642.25 + $1315 = $3707.25
Breakeven number of students = $3707.25 divided by $214 = 17 students (technically 17.32).
At a minimum enrollment of 17 students faculty member receives full 2.5% per undergraduate credit hour taught. (Note: Graduate courses and internet courses would be calculated using the graduate tuition rate thus minimum enrollments would be lower.)
For a 3-credit hour course this would be $1750 x 3 = $5250.<br>
slide11. Faculty Salary Below Breakeven Enrollment Point Faculty compensation would be the total tuition collected reduced by the university base revenue needed amount and faculty-specific fringe.
Tuition Collected (i.e., number of students multiplied by tuition rate per credit hour)
– University Base Revenue Needed Per Credit Hour Offered (i.e., $1315)
= Money available for compensation and fringe<br>
slide12. Example for Faculty Salary Below Breakeven Enrollment Point Tuition collected: 15 students paying $214 each per credit hour = $3210.
Money available for compensation and fringe (Tuition collected – university base revenue needed, i.e., “overhead”):
$3210 – $1315 = $1895. $1895 is available for compensation and fringe.
Calculating salary after subtracting fringe:
$1895 divided by 1.367 = $1386 ($509 of $1895 is needed for fringe).
This amount, i.e., $1386, is what the faculty member would be compensated per credit hour for teaching the course with only 15 students instead of the breakeven number of 17. For a 3-credit hour course this would be $4158.
[Note: Their fully compensated amount was $1750 per credit hour, or $5250 for 3 credit hours.]<br>
slide13. Optional Phase Two: Profit-Sharing Above a university goal for tuition revenue collected the additional tuition revenue from summer would be shared across the faculty, colleges, and the university.
Dividends would be divided as per a formula yet to be determined.<br>
slide14. Profit-Sharing Proportions Profit to be shared
/ credit hours offered
= profit to be shared per credit hour of instruction
Profit-Sharing Proportions:
Faculty Member ??%
Department on behalf of the Faculty member ??%
College ??%
University ??%<br>
slide15. What we are working on…. University Base Revenue Needed for Breakeven faculty formula (“overhead”), possibly converting to a calculation based on tuition rate
Profit-sharing model
Online calculator for ease of doing PAFs
How to “fund” additional salary above the cost center summer budgets
Application of model to per course instructors<br>
slide16. Questions? Suggestions?<br>
slide2. Members of the Committee Dr. Cindy MacGregor, Chair
W.D. Blackman – COAL
Tim Flannery, CHPA
Steve Foucart – CFO
Julie Masterson, Dean, Graduate College
Arbindra Rimal, Darr
Timson, Benjamin CHHS
Huang, Shyang, CNAS<br>
slide3. Current System The current system of funding faculty to teach during the summer session is constrained by cost center summer budgets. Additional courses cannot be taught because the summer budgets are capped.
Faculty are limited in the number of courses they are allowed to teach during the summer based on what cost centers can afford.<br>
slide4. Faculty Handbook The Faculty Handbook prescribes faculty are paid at least 2.5% of their base salary per credit hour taught, provided minimum enrollments are met. No other exceptions to the 2.5% are allowed by the Faculty Handbook.<br>
slide5. “Triple Win” Outcomes More potential course options for students,
More potential income for faculty (through teaching more courses and sharing profits) while honoring Faculty Handbook,
More potential revenue for the university (including departments and colleges) while protecting financial costs.<br>
slide6. Other Potential Benefits Removing the cap on summer instruction could be a recruiting tool for new faculty who want to increase their income by doing summer work.
The same could be true of seasoned faculty who want to increase their “top three” years of income.
An improved summer compensation model could also be applied to intersession improving those offerings.<br>
slide7. Basic Summer Compensation Formula [(2.5% of base salary) + (2.5% of base salary x fringe percentage)
+ University Base Revenue Needed*]
/ tuition rate per credit hour
= breakeven number of students
*Committee is still working on this. This becomes the “overhead” for the breakeven formula.<br>
slide8. University Base Revenue Needed Per Credit Hour Offered Budget Goal for Summer Revenue
Cost Center Allocations for Summer Faculty Salaries
= Summer University Revenue Goal
Summer University Revenue Goal
/ Credit Hours Offered for 2018
= Revenue Goal Per Credit Hour Offered
University Base Revenue Needed Per Credit Hour Offered<br>
slide9. University Base Revenue Needed Per Credit Hour Offered $7.5 Million – $3.97 Million = $3.53 Million
$3.53 Million / Credit Hours Offered Summer 2018, i.e., 2684
= $1315. (university “overhead” per credit hour)
Thus, if the same number of credit hours were offered in summer 2019 as in 2018 the university would be guaranteed the base revenue needed, i.e., $3.53 Million<br>
slide10. Example Salary = $70,000; 2.5% of salary = $1750
Fringe = 36.7% of $1750 = $642.25
University Overhead = $1315
Total cost of a fully-enrolled class = $1750 + $642.25 + $1315 = $3707.25
Breakeven number of students = $3707.25 divided by $214 = 17 students (technically 17.32).
At a minimum enrollment of 17 students faculty member receives full 2.5% per undergraduate credit hour taught. (Note: Graduate courses and internet courses would be calculated using the graduate tuition rate thus minimum enrollments would be lower.)
For a 3-credit hour course this would be $1750 x 3 = $5250.<br>
slide11. Faculty Salary Below Breakeven Enrollment Point Faculty compensation would be the total tuition collected reduced by the university base revenue needed amount and faculty-specific fringe.
Tuition Collected (i.e., number of students multiplied by tuition rate per credit hour)
– University Base Revenue Needed Per Credit Hour Offered (i.e., $1315)
= Money available for compensation and fringe<br>
slide12. Example for Faculty Salary Below Breakeven Enrollment Point Tuition collected: 15 students paying $214 each per credit hour = $3210.
Money available for compensation and fringe (Tuition collected – university base revenue needed, i.e., “overhead”):
$3210 – $1315 = $1895. $1895 is available for compensation and fringe.
Calculating salary after subtracting fringe:
$1895 divided by 1.367 = $1386 ($509 of $1895 is needed for fringe).
This amount, i.e., $1386, is what the faculty member would be compensated per credit hour for teaching the course with only 15 students instead of the breakeven number of 17. For a 3-credit hour course this would be $4158.
[Note: Their fully compensated amount was $1750 per credit hour, or $5250 for 3 credit hours.]<br>
slide13. Optional Phase Two: Profit-Sharing Above a university goal for tuition revenue collected the additional tuition revenue from summer would be shared across the faculty, colleges, and the university.
Dividends would be divided as per a formula yet to be determined.<br>
slide14. Profit-Sharing Proportions Profit to be shared
/ credit hours offered
= profit to be shared per credit hour of instruction
Profit-Sharing Proportions:
Faculty Member ??%
Department on behalf of the Faculty member ??%
College ??%
University ??%<br>
slide15. What we are working on…. University Base Revenue Needed for Breakeven faculty formula (“overhead”), possibly converting to a calculation based on tuition rate
Profit-sharing model
Online calculator for ease of doing PAFs
How to “fund” additional salary above the cost center summer budgets
Application of model to per course instructors<br>
slide16. Questions? Suggestions?<br>