Investing In Our People: Our Proposed Compensation Plan

The following message from President Capilouto was sent to all of campus on Tuesday,  April 5, 2022.

Key Takeaways 

• We will be proposing to the Board of Trustees in June a compensation plan that doubles the annual amount we’ve been investing over the last 10 years for pay raises – $8.6 million on average to more than $17 million this coming year.
• Taking care of our people is a principle of our Strategic Plan. This compensation plan demonstrates that our plan is more than words. We are investing in our workforce.
• This year, deans and unit leaders will have greater flexibility in determining compensation to ensure we reward and retain people for outstanding performance, while also addressing such issues as salary compression.

Campus Community,

Taking care of our workforce – our people – is critical in meeting our mission to advance Kentucky.

In the university budget that will be considered by the Board of Trustees in June, we will propose a pay increase, the second of this calendar year, and the ninth pay increase out of the last 10 years.

In fact, over the last 10 years, we’ve invested – on average per year – $8.6 million in salary, wage, and benefit increases from central sources.

This year, we will double that amount by investing more than $17 million.

It will be the most flexible raise pool we’ve created in terms of how deans and unit leaders disperse the increased compensation funds. The idea is that these leaders – those closest to the work being done in colleges and departments – can make the best decisions about the performance and needs of respective units.

We also have purposefully expanded the time that managers and leaders will have to think about a salary plan to ensure we are maximizing the impact and reach of these critical investments. To that end, the Executive Vice President for Finance and Administration and Provost will be distributing details and guidelines in the next few days so that units can begin developing and implementing salary plans.

These institutional leaders will be given sole responsibility for allocating the pay increases, based on three overarching principles:

• Reward and recognize outstanding performance
• Improve opportunities for people to continue to advance
• Address issues such as compression and retention

The salary plan outlined below does not include UK HealthCare, which has a separate salary plan and timeline for when and how raises are implemented.

The specific details of what the board will consider in June regarding pay increases include:

• Each member of the President’s Cabinet will receive a pool of dollars for pay raises proportionate to each area’s percentage of salary and wages at the university. So, if an area’s total compensation is 20 percent of the salaries for the university, it will receive 20 percent of the salary pool.
• At the start, all employees performing at a level that is at least satisfactory based on performance evaluations will receive a pay increase of $1,000 for the fiscal year, beginning July 1.

Then, using the remaining portion of the salary pool, deans and unit leaders will have complete flexibility to provide additional recurring compensation increases based on factors they choose, including:

• Performance goals achieved as part of the established evaluation process
• Retention of valuable team members
• Compression (where there is little difference in pay among employees within a department or unit regardless of experience or tenure)

As I have mentioned before, budgets are an expression of values. At UK, we value our people. You make the work we do possible. You ensure our mission of education, research, service and care can thrive and grow.

It’s why we’ve undertaken measures in recent weeks such as rolling over vacation leave during challenging times, investing more in health care to hold down costs and expand coverage and doubling what we are putting toward raises to support our people and reward outstanding performance.

Our new strategic plan – the UK Purpose – has as its north star our vital mission to advance this state. As an institution, we are distinctly positioned for that mission. Our growth – in students and graduates, in research efforts that tackle our most intractable problems, in expanding care to every corner and community of our state – will help ensure a Kentucky that is healthier, wealthier and wiser.

That growth, and that mission, requires outstanding people committed to a distinctive and special community. We have outstanding people. And we are committed to investing in our people. Thank you for all you do for this community and our Commonwealth.

Eli Capilouto

President