Proposed Compensation Plan

Campus Community,

None of the progress we make in advancing Kentucky is possible without our people. You take care of our state. We are working to take care of each other. 

We often describe the financial management of our university in terms of three enterprises:  higher education, athletics and health care. In the budget our Board of Trustees will consider for 2024-25, we will propose the largest investment in our employees who are in the higher education (academics, research and administration) and athletics enterprises in the history of our institution. Our people in UK HealthCare are paid on a different schedule. So, the salary decisions for employees in the health care enterprise will be made later in the fiscal year.   

• The 2024-25 budget will invest more than $27 million in our people that are funded centrally from state appropriations and tuition revenue. Auxiliary units — such as athletics — that are not funded through tuition or state appropriations will self-fund their compensation increases.
• This investment will include $18.1 million for a salary increase pool and an additional $9.2 million for health benefits. 
• This will mean investing more than $50 million dollars in pay raises and an additional $12 million in health benefits in three years.
• If adopted, it will be the 11th time in the last 12 years we’ve provided increases in pay for our people. 
• We will also be offsetting the rising costs of health benefits, as much as possible, to ensure you have as much access as possible to the best of care. The investments in health benefits — and the issues we are facing with costs — do apply to our colleagues in the health enterprise.

It is a series of investments in our people without precedent in UK’s history.

And it is because of who you are and what you do. 

Policymakers, who fund us, understand how the work we do advances Kentucky. And they are continuing to invest in this community. 

Families and students believe in the distinctive education that only we provide. Their hard-earned dollars are a vote of confidence in you and in this place.

This will be the third year in a row we will give supervisors and units flexibility in how they can distribute the salary increase pools. They will be able to continue to distribute pay raises to reward performance and address challenges such as retention and compression.

The bottom line is that salary increase pools give supervisors and units more flexibility to reward outstanding performance and address their specific situations.  It’s another example of how more decisions can and should be made at the local and unit level, closest to those most impacted. 

This approach — trusting our people to make decisions about investing in our people — has proven to be very effective. 

Other details about the compensation proposal include:

• As before, each member of the President’s Cabinet will receive a pool of dollars for pay raises proportionate to their area’s percentage of salaries and wages funded centrally at the university.
• If a unit’s total compensation, for example, is 10 percent of salaries at the university, that unit will receive 10 percent of the total salary pool. Similar salary increase pools will be created for employees funded with other sources. 
• Later this week, Executive Vice President for Finance and Administration Eric Monday and Provost Bob DiPaola will circulate guidelines for the salary increase pool to unit budget officers, so the process for pay raise decisions can begin. 

We are doing so much to advance our state in so many ways. 

We’re striving with the dollars with which we are entrusted to invest more in our people — all of you — who make our progress and our promise possible.

Thank you for all you do.

Eli Capilouto 

President