UC Unveils Salary Reforms, $550-a-Year Fee Increase : Education: New president seeks to curtail perks for administrators at a time when tuition is rising.

The new president of the University of California on Friday recommended an overhaul of salary-setting and benefits for UC’s top 22 officials, responding to allegations made since last spring that the school’s leaders are too lavishly reimbursed.

The proposals by UC President Jack W. Peltason would not cut deeply into overall compensations for high administrators of the nine-campus system. However, even critics say the changes are important symbols at a time when students are being asked to shoulder more of the burden of budget shortfalls.

Peltason asked Friday that annual student fees be raised at least $550 next year, to about $3,600 for undergraduate state residents, excluding room and board. In a sharp change of policy, his plan also called for medical, law, veterinary and business graduate students to pay a $1,000 annual surcharge. Further fee increases for all students may be proposed before spring, depending on the overall state budget.

Given such fiscal difficulties, Peltason said he wanted to end the damaging debate over executive compensation. The controversies began in March with news of the large severance package for Peltason’s predecessor, David P. Gard ner, and continued with harshly critical reports from the state auditor general and the former state legislative analyst.

Peltason, who took office last month, partly heeded those reports in calling for:

* Eliminating the 5% annual bonuses that campus chancellors are given for their spouses’ UC-related work.

* Cutting up to $5,000 a year that executives can receive for tax planning.

* Ending most off-campus housing allowances for chancellors if a campus house is available.

“These suggestions are presented in the spirit of openness and fiscal responsibility,� Peltason said in a prepared statement. “I hope we can gain general public acceptance of these principles and then move forward together to deal seriously and conscientiously with the very real issues of preserving the essential character of the University of California during these most difficult budgetary times.�

Also targeted for elimination are most deferred salary payments--controversial annual bonuses that can raise an executive’s pay by as much as 25%. Critics said the payments were designed to avoid public scrutiny. By the end of next year, the equivalent of those deferred bonuses would be added to regular salaries, a move that could trigger opposition in the Legislature in response to students’ anger over the proposed fee increases.

Under Peltason’s plan, the average annual pay for each of the nine chancellors would be $194,174, including what had been deferred income. UC officials contend that still will be about 3% below the average found in a study of 26 U.S. public and private universities.

The president’s base salary is $243,500 and his three-year contract calls for an additional 15%, or $36,525, in deferred payments a year. In Peltason’s case, the deferred payments will be paid in 1995, not be added to base salary.

Peltason recently gave up the $41,170 annual housing allowance he was to receive in addition to the free living quarters provided in the presidential mansion near Berkeley. Gardner was harshly criticized for receiving a similar housing allowance after choosing not to live in the mansion for family reasons.

UC regents are scheduled to discuss the compensation items at a meeting Wednesday in San Francisco and are expected to approve them when they vote next month.

“It’s a great improvement over what we had,� said Regent W. Glenn Campbell, who has been critical of many perquisites for UC officials. But Campbell suggested a further step, a 5% to 10% pay cut for top administrators.

Similarly, Jeremiah F. Hallisey, the first to publicly complain about Gardner’s severance pay, welcomed Peltason’s moves. “It’s a change in direction from what we’ve been accustomed to over the past 10 years of secrecies and hidden perks,� he said, adding that he also would advocate some pay cuts for executives.

Hallisey said he was pleased with Peltason’s plan to change the methods by which administrators’ pay is compared to competing institutions. In the past, UC depended heavily on a private consulting firm in gathering figures from eight other universities and institutions. That method found that UC’s pay was lagging, although critics complained that the survey was rigged. Future comparisons will follow the suggestions of the California Postsecondary Education Commission (CPEC) and survey 26 other schools.

Last year, a CPEC study said Gardner’s overall compensation package of $243,500 in salary and $64,400 in deferred income was about 30% higher than the national average. CPEC found that UC chancellors’ pay was about average.

For example, UCLA Chancellor Charles E. Young this year is to receive $175,000 in base salary and $29,900 in deferred income. Under Peltason’s plan, Young’s base salary would equal the total of those two figures, or $204,900, by the end of next year.

In addition, Young would receive $167,007 in back payments from the deferred bonuses already put aside for him, according to UC documents. In all, 15 administrators would share in various proportions the $1.62 million awaiting them since 1988.

Nearly two years ago, UC regents allowed Young to move out of the chancellor’s residence after he complained it was run-down and seismically unsafe. The regents awarded him $41,710 a year in housing allowance, which Young is using on a private residence he bought in Ventura County. Under Peltason’s plans, Young can continue that arrangement, but his successor “would be expected to live in the official university residence,� according to a UC statement. Repairs to the house may be required first.

Two senior vice presidents of the UC system are the only other UC officials who receive housing allowances in lieu of campus housing. Murray Schwartz, who is in charge of academics, and Ronald W. Brady, in charge of administration, are scheduled to retire next year and their successors would get no housing aid if reform plans are approved.

UC officials warned last month that large fee increases were likely because of the 10.5%, or $224-million, cut in state general revenue funds the university suffered this fall. On Friday, the administration formally proposed that student fees be raised $550, or about 18%, in September to cover that shortfall as well as the $70 million UC expects to borrow this year. Officials and student leaders fear that the $550 might double to more than a $1,000 fee increase in January after Gov. Pete Wilson releases his 1993-94 state budget message.

“It’s going to be devastating,� said Tobin Freid, president of the UC Student Assn. She predicted that the fee increases will trigger massive student demonstrations across the system. Earlier this week, student sit-ins over similar issues disrupted the Santa Cruz campus, where Freid is a senior.

Since 1989, undergraduate UC fees have doubled, although UC officials contend that the costs still are close to the average of comparable public universities nationwide. Student leaders, however, charge that the traditional policy of offering high-quality, low-cost education to all qualified Californians is ending.

Extremely controversial is Peltason’s request that students in medical, dental, veterinary and masters’ of business administration programs pay a $1,000 surcharge in addition to all the other fee hikes. Student regent Alex Wong said the surcharge will “create a real barrier to access,� particularly for ethnic minorities UC wants to recruit.

In addition, UC administrators announced Friday that they are aiming for the elimination of 2,000 administrative and non-teaching jobs this year through early retirement programs and attrition.