Friday, October 5, 2012

How UCLA's Millionaire Doctor/public employee David Feinberg got $1.3 million amid tuition hikes, budget cuts and a recession

Dr. David Feinberg

[Maura Larkins comment: Both Dr. Feinberg and Chancellor Gene Block are psychiatry professors. A lawsuit has been filed against yet another professor of psychiatry at UCLA. Dr. Alexander Bystritsky is accused of causing the wrongful death of a woman by giving her dangerous medications in order to make her feel happy and to believe she was cured of her illness, causing her to give a large donation to UCLA.

What kind of ethics does Dr. David Feinberg have? What's he going to do with all this money? I'm guessing it's not all going to scholarships for students who can't pay tuition at UCLA.]

UCLA's Millionaire Doctor David Feinberg
How Feinberg got $1.3 million amid tuition hikes, budget cuts and a recession
By Beth Barrett
LA Weekly
Mar 31 2011

Last year, when Stanford Hospital & Clinics was considering poaching Dr. David Feinberg from UCLA, where he is the associate vice chancellor and CEO of its public hospital system, the university brass and the powerful UC Board of Regents decided to do whatever was required to keep their golden administrator.

Things were bad at UCLA when the feverish bid to retain Feinberg broke out. It had just been slammed with $60 million in academic program cuts by the deficit-riddled state of California, and faces another $96 million bite on July 1. In a series of recent hikes, the university raised average student tuition 40 percent from about $7,000 to more than $11,000.

More tuition hikes were coming, and the university owed its employees $21.5 billion in future pension payments that it had no clear-cut way to pay.

But the vast Ronald Reagan UCLA Medical Center, a public nonprofit, had experienced a financially robust previous year under Feinberg, and the facility in 2009 enjoyed high patient-satisfaction rankings as usual. Despite California's stubborn recession, UCLA Chancellor Gene Block — like Feinberg, a psychiatry professor at the School of Medicine — decided to make his colleague a staggering offer: He would nearly double Feinberg's $739,695 base salary to $1.33 million.

That included a 22 percent pay raise of $160,300 and an annual "retention bonus" of $250,000 paid every year that Feinberg does not leave for another job. Block also decided to continue Feinberg's "incentive bonus," which had hit $210,739 in the previous fiscal year.

There was nothing else quite like Block's offer elsewhere in California's university medical schools. The next highest paid is UC San Francisco's CEO Mark Laret. San Francisco, like UCLA, is a top facility, ranked seventh in the nation by U.S. News & World Report, close behind No. 5 UCLA.

In 2010, Laret's $739,700 pay was reduced as a result of the systemwide pay cuts. But with an "incentive" bonus of $176,912 and a car allowance of $8,916, he earned $876,215. Now, suddenly Feinberg was in line to earn nearly half a million dollars more than Laret.

On June 30, Feinberg will begin getting his annual quarter-million-dollar bonus simply for not leaving for another job.

Feinberg's juicy pay package led to uncomfortable headlines for UCLA on Sept. 17, the day after the Board of Regents approved it.

Then, in late December, Feinberg earned UCLA another round of unwanted media attention. The San Francisco Chronicle obtained a private Dec. 9 letter in which Feinberg and 35 other executives in the UC system lashed out at the Board of Regents. The highly compensated group weren't demanding help for academic programs and students. They were threatening to sue the struggling California universities if the regents didn't boost the executives' long-standing $245,000 salary caps used to calculate their pensions.

The change would create a sizable pension boost, costing the universities $5.1 million per year — for just 36 government employees. In addition, the 36 executives insisted the new pension deal be retroactive to 2007, taking from the universities an additional bite of $51 million.

In the letter, Feinberg and the others wrote that it was "the University's legal, moral and ethical obligation" to hand over the pension boosts. They also threatened, "Failure to do so will likely result in a costly and unsuccessful legal confrontation," and emphasized that they were writing "URGENTLY."

The letter, which proved to be deeply embarrassing to UC officials and the regents, was widely assumed to have been leaked by a UC university system insider disgusted by the demands.

The demands from the 36 were a direct political challenge to UC President Mark Yudof, who had publicly opposed bigger pensions for university executives. The University of California system owes $21.6 billion in future pension payments to all its retirees — but it hasn't got the money, and doesn't know where it's going to get it. Yudof is pursuing fiscal reforms to raise the missing billions, including upping the retirement age for future employees from age 60 to 65 for maximum pension benefits — and, once again, raising student tuition and fees.

The leaked letter enraged students, critics of cushy government pensions and salaries and incoming Gov. Jerry Brown, who is a nonvoting member of the Board of Regents.

Brown opined in the Chronicle in December: "These executives seem very out of touch at a time when the state is contemplating billions of dollars in reductions that will affect people who are far less advantaged."

In early January, under a media spotlight, Block opposed the pension boosts, and the demand was not approved by the regents.

But three weeks later, without a formal vote, the regents — who include such notables as investment banker Richard C. Blum, husband of Sen. Dianne Feinstein, and Sherry L. Lansing, former chair/CEO of Paramount Pictures — found a way to give Feinberg and other UC system medical center executives statewide a different costly reward: "incentive" bonuses totaling $2.6 million that had been deferred from 2009.

Feinberg topped the bonus recipient list, raking in $218,728.

The popular doctor now has critics aplenty. Students, facing further tuition hikes as Gov. Brown struggles with a massive deficit, are flabbergasted at the Wall Street–like disparity between how the UC system treats its highfliers versus its students.

Student Matt Margolis, president of the Bruin Democrats, says thousands of UC, California State University and community college students "have to take quarters off, drop classes, get kicked out of their housing." For UC leaders "to respond to the need to scale back by cutting the budget and raising tuition — I don't see how that sits well with the CEO of the medical center having his salary doubled...

No comments: