Rule 20203: Compensation for Key Executives



20000: Administration

Date Approved

Date Last Amended

Office(s) Responsible for Rule

Office of the Controller

1.  Title

Compensation for Key Executives 

2.  Rule and Regulation

Sec. 1  Compensation Philosophy.  To attract, retain, and motivate the top talent needed to lead The University of Texas System and accomplish its mission, and to recognize and reward performance, the Board of Regents seeks to compensate key executives at levels that are competitive in the marketplace, cost effective, and, to the extent possible, internally equitable.

Sec. 2  Market Review.  To align executive compensation with the relevant market, U. T. System Administration will obtain current and reliable market data on total compensation of key executives in comparable positions at peer institutions.

Sec. 3  Elements of Compensation.  The elements of compensation may include and are limited to base salary; short and long-term incentive pay; supplemental retirement plans, such as deferred compensation plans; one-time merit pay; special provisions necessary to recruit an individual to a key executive position, such as salary supplement for a limited time or one-time relocation payment as necessary and prudent to recruit the top talent for the position; and perquisites such as memberships, parking privileges, and provision of or allowance for cell phone and/or other mobile communication devices as determined necessary for business purposes and as covered in individual agreements. Key executives must promptly reimburse the institution for any personal use of a membership provided by the institution. All compensation set pursuant to this Rule must comply with all applicable state and federal laws and must be approved and documented in budget summaries. All compensation for service as a key executive is covered by this Rule. Elements of compensation paid on behalf of a chief administrative officer must be disclosed in the annual report of expenses required by Rule 20205.

Sec. 4  Peer Institutions.  Peer institutions or groups of institutions will be determined by the Chancellor after consultation with the presidents and based on factors including size, mission, budget, and program mix.

Sec. 5  Approval by Board of Regents.  All proposed elements of compensation, including taxable and nontaxable items, will be presented to the Board of Regents for approval.

Sec. 6  Determining Compensation.  In setting a key executive’s initial compensation, the following factors should be considered: relevant market data, current compensation, cost of living differences, internal equity, and the U. T. System budget. Where appropriate, U. T. System may target the 75th percentile of the market rate of a key executive’s peer institutions. Factors to consider in making future adjustments to a key executive’s compensation include market data, key executive performance, the institution’s progress on key performance indicators, internal equity, and the U. T. System budget.

Sec. 7  The presidents will implement appropriate policies and procedures concerning executive compensation for the direct reports at each U. T. System academic and health institution.

3.  Definitions

Key executive(s) – include the Chancellor, General Counsel to the Board, Chief Audit Executive, Executive Vice Chancellors, presidents of each of the U. T. System academic and health institutions, and Vice Chancellors.

4.  Relevant Federal and State Statutes 

Texas Education Code Section 65.31 – General Powers and Duties 

5.  Relevant System Policies, Procedures, and Forms 

Regents’ Rules and Regulations, Rule 20202 – Cash Compensation for Chief Administrative Officers 

6.  Who Should Know 

Chief Audit Executive 
Direct reports to the Board of Regents 
Executive Vice Chancellors 
Vice Chancellors 

7.  System Administration Office(s) Responsible for Rule 

Office of the Controller 

8.  Dates Approved or Amended 

Regents’ Rules Revision History 

9.  Contact Information 

Questions or comments regarding this Rule should be directed to: