OFFICE OF THE PRESIDENT

POST OFFICE BOX 2688, CHAPEL HILL, NC 27515 2688

MOLLY CORBETT BROAD, President
Telephone: (919) 962-1000 FAX: (919) 843-9695
Email: mbroad@northcarolina.edu

October 10, 2002

MEMORANDUM

TO:               The Chancellors

FROM:          Molly Corbett Broad

SUBJECT:     Salaries for 2002 - 2003

I appreciate the thoughtful conversations we shared about the issue of salary increases for university employees. I also recognize that minimal salary increases over the past few years have caused challenges retaining first rate faculty, fine staff, and professionals.

This year, 14 UNC campuses have funds available for faculty salary adjustments from campus initiated tuition increases, and all campuses have modest funds available from vacant lines, endowments, or other sources. These sources will not permit either general across the board increases or merit increases that no doubt are well deserved by many employees. In light of the budgetary constraints imposed on the University that will permit salary adjustments for only a small fraction of our employees, I will not be proposing salary increases for chancellors this year, even though there is ample evidence of meritorious performance and market issues. Given resource limitations, I am setting out the following guidelines to supplement the Board of Governors' salary resolution that will be considered at the October Board meeting. Any exceptions to these guidelines will require presidential approval.

*     There will be no cost of living or across the board salary increases.
*     The lack of salary funds for salary increases based on merit, does not diminish        the need for regular and ongoing evaluations. It is important, however, for        employees to recognize that this year such evaluations will not be linked to salary        increases.
*      Salary increases that are given must be based on market, equity, or significantly
       increased responsibilities.
*      Campuses may use an "all funds" approach to salary increases, using funds
       from multiple sources including grants, private gifts, and vacant position lines to        address the most critical needs.
*      Non faculty EPA may not receive a salary increase on average that exceeds the        average percent of salary increases provided to faculty.
*      Salary increases for administrators for whom salary ranges exist must not be        increased above the 80th percentile of the range without receiving the prior        concurrence of the President.
*      In rare circumstances, non faculty EPA funds may be used to provide increases        in faculty salaries or vice versa.

I am confident that despite the absence of salary adjustment funds, this great University will continue to thrive. The investment we are making in the physical capital of University campuses will serve us well in meeting the challenges to our mission in the 21st century. The full funding by the General Assembly and the Governor of enrollment growth throughout all parts of the University is an important affirmation of their support of our commitment to provide access. And the increases made in financial aid should assure improved affordability for UNC students.

Thank you for your leadership and your loyalty to the University.

cc:   Chief Academic Officers
        Chief Finance Officers