Panel Backs Cut in Perks for UC Brass : Education: Benefits of top administrators have been criticized in time of rising student fees. But officials say savings would be just $256,730 a year.

SAN FRANCISCO —  Poised to sharply raise student fees for the third year in a row, the UC Board of Regents moved Wednesday toward cutting back some of the much-criticized benefits for top administrators of the nine-campus system.

UC system President Jack W. Peltason estimated that his reform measures, approved by a regents committee Wednesday, would save $256,730 a year. That is a minuscule savings compared to UC’s overall $6.5-billion budget, excluding the nuclear laboratories it runs for the federal government. But the changes were presented as politically wise in a time of austerity.

While referring to the elimination of funds for chancellors’ spouses, regents chairwoman Meredith Khachigian seemed to speak of all the changes. “It’s certainly not a great deal of money we are saving. But it’s the message,” she said.

UC Berkeley physics professor Charles Schwartz, a longtime critic of regents’ policies on executive compensation, thanked the board for the reforms. “I compliment you on your willingness to make an about-face, or at least a half turn,” he said in urging the elimination of even more benefits.

The full Board of Regents is likely to vote for the proposals at a special meeting Dec. 10. Among the changes approved Wednesday by the regents’ Finance Committee were:

* Eliminating up to $5,000 a year that top UC administrators can receive for estate and tax planning.

* Dropping the annual 5% bonuses that campus chancellors are given for spouses’ UC-related activities, such as entertaining and fund raising. Those monies had been payable at retirement.

* Ending the $41,170 annual housing allowances for a chancellor’s private off-campus residence if a suitable campus house exists, and dropping it for the system’s two senior vice presidents after the incumbents retire this summer.

Among the nine chancellors, only UCLA chief Charles E. Young receives the allowance, a benefit he first received two years ago after moving out of the campus house he contends is run-down and seismically unsafe. Young will be allowed to continue that arrangement, but his successor won’t.

The regents are under intense pressure to make some cuts in executive perquisites in the wake of harshly critical reports on those issues by the state auditor general and a former legislative analyst in the past few months. Even more timely, the regents are scheduled to consider today Peltason’s proposal for a $550 fee increase, which would raise basic annual costs for undergraduate Californians by 18%, to nearly $3,600 next year. That does not include living expenses or books.

If approved as expected, that 18% rise would come on top of raises of 24% and 40% in previous years. UC officials are warning that they may have to hike fees even more in the spring if overall state revenues decline. In addition, Peltason is seeking a $1,000 annual surcharge for graduate students in medical, dental, veterinary, law and business programs.

Though it would save no money, the reform most discussed Thursday would eliminate most deferred salary payments at the end of next year and simply add those amounts to regular annual salaries. The reform, Peltason said, answers criticism that UC tried to hide part of its executives’ salaries.

Since 1987, the top 22 university executives have been eligible for annual bonuses that were designed to add as much as 25% to their pay. Earlier this year, UC Vice President Ronald Brady conceded that the bonuses were created to avoid the legislative scrutiny that a regular pay hike would arouse. In the past, when asked about their salaries, UC executives rarely, if ever, mentioned the bonuses.

Under Peltason’s plan, the nine UC chancellors would average $194,174 in annual pay, including what had been deferred income. The three newest chancellors--UC Berkeley’s Chang-Lin Tien, Santa Cruz’s Karl Pister and Riverside’s Raymond Orbach--would receive raises to help them catch up with the bonuses accrued by more senior executives. Tien’s salary, including what had been deferred payments, will rise from $191,500 to $204,900 next year, and Pister’s and Orbach’s will increase from $165,000 to $175,500.

In light of the proposed fee increases, UC Student Assn. representative Greg Lewis called for “courteous termination” of the deferred bonuses. He said it was unlikely such a pay cut would cause chancellors to quit.

Of the 10 committee members, only regents Jeremiah S. Hallisey and W. Glenn Campbell voted against folding the bonuses into base pay. They questioned the way pay is figured for systemwide officials and have suggested that all top administrators take a 5% to 10% pay cut as an austerity move.

The lingering controversy over executive compensation began in March when the regents awarded outgoing UC President David P. Gardner $857,000 in severance benefits and deferred pay he otherwise would have forfeited. Peltason, who took office last month, said he adopted ideas in the report by former legislative analyst A. Alan Post.

“It’s the spirit of his recommendations,” Peltason said in an interview after Wednesday’s meeting.

The UC president said he hoped the actions would end the eight-month furor over compensation. “There are so many important things facing us that are more directly relevant to the delivery of education,” Peltason said.

Peltason said that to help recruit and retain top administrators, he wants to keep the low-interest mortgage loan program available for executives as well as severance bonuses that amount to 5% of salary for every year served.