UT System Chancellor Mark Yudof, who is slated to receive an $18,000 pay increase because of a law passed in the 77th legislative session, will redirect those funds to a UT System endowment fund established last fall.
The Board of Regents will meet Monday to discuss, among other things, a possible budget change to comply with the mandated salary increase.
"The 77th Legislature passed a law that anyone hired in the spring or summer of last year would get a raise this year," UT System spokesman Monty Jones said.
Yudof, appointed chancellor June 21, 2002, will receive a 4-percent pay increase, but he's going to divert the funds back to the UT System, said Jones.
"First he has to pay taxes on it, and then whatever's left will be donated to the Mark and Judy Yudof Endowment Fund," Jones said. Yudof is on vacation and was not available for comment.
The Yudofs pledged $10,000 to the endowment earlier this year, Jones said. Whatever funds the pay raise provides will be added to the endowment as well.
When the chancellor was first hired, he was informed of the law, said Michael Warden, executive director of public affairs for the UT System.
"Last fall he said that he wanted to decline [the pay raise], but he was informed by the Board [of Regents] that he couldn't because of the state law. He figured the next best thing would be to donate it," Warden said.
The endowment funds are unrestricted, Warden said, and can be used for scholarships, research, entertaining donors or any other activities that benefit the UT System.
Yudof currently receives an annual salary of $450,000 dollars, said Jones.
Only $70, 231 of that amount comes from state appropriations, and the rest is funded by private donors.
Additionally, Yudof receives an annual car allowance of $8,400 and a life insurance plan valued at $14,739. After he retires, will receive a deferred compensation of $150,000, said Jones.
Members of UT Watch, a student watchdog group on campus, were concerned that Yudof might receive a pay raise, while faculty and staff members face hiring freezes, pay cuts and layoffs.
However, Warden emphasized that most of Yudof's income is provided by private donors and that, "not a penny of tuition goes toward paying salaries."
"It's a fundamental mistaken assumption that tuition moneys go toward paying the salary of the chancellor," Warden said.
A.W. "Dub" Riter, a vice chairman of the Board of Regents, said that while he didn't know why Yudof chose to donate the money, that he is "an outstanding leader. He's a very generous person."
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