Executive Compensation "on hold", PwC Report - a quick summary

In the past week, the Ontario college sector has seen a flurry of media attention around the Executive Compensation Program at each college, and the PricewaterhouseCoopers report, commissioned by Colleges Ontario.

Below is a brief overview as we’ve seen it in the media, and a reminder about OCASA’s role in any of these discussions. If you have questions, thoughts, or concerns that you would like to direct our way, forward them to diane [dot] posterski [at] ocasa [dot] on [dot] ca (Diane Posterski), Executive Director.

A summary of the facts as we understand them today

1.    The Broader Public Sector Executive Compensation Act (2014) and its Regulations (September 2016) outlined a process for an Executive Compensation Program to be developed by each college (and other public sector institutions). Specific guidelines were provided, including the use of public sector comparators, the relative comparison to be used, and the goal of determining maximum salaries for those defined as executive function.
For a brief and informative overview about the Act and its regulations, click here for the Government of Ontario News Room.

Each college underwent this process according to the guidelines (and with initial guidance from the College Employer Council (Council)) and posted their proposed Executive Compensation Program for 30 days, inviting public comment (most posted in mid-December but a couple have posted in January) after which time period each Board of Governors could approve its adoption.

Once this was complete, the wage freeze would be lifted for all affected administrators at that college. This group is broader than just those in an executive function – including Deans, some Directors, and others that might have fallen in a certain payband range (typically payband 14 and above). This has varied by college.

2.    On January 13, OPSEU presented a letter to the Minister of Advanced Education and Skills Development raising concerns about what OPSEU viewed as inflated comparators used in the process. They provided a detailed analysis.
You can view OPSEU's letter here.

4.   Media attention increased following the OPSEU release (for example, this one from the Ottawa Citizen).  It was also noted that five colleges went beyond the recommended comparators, resulting in higher maximum salaries than would have otherwise been determined.
You can read an article from The Waterloo Record about this here (written by John Tibbitts, President of Conestoga).

5.    On January 26, the Minister asked “college presidents and board chairs to go back to the table to rethink their proposals with more appropriate comparators” noting that wages would remain frozen.
Click here to read the Toronto Star article about this.  And click here for a Globe article.

6.    Colleges, and the college sector, are now determining next steps. It is unclear at this point what those steps might be.

7.    During this same time period, a comprehensive report conducted by PricewaterhouseCoopers, commissioned by Colleges Ontario, became public.  According to a Globe and Mail article, this report concluded, “[In] the absence of creative actions on the part of colleges and policy makers to address the future fiscal sustainability of the Ontario college sector, the core mandate of colleges appears to be in jeopardy.”
Click here to read the full article.  
A more recent article focuses on Colleges Ontario's efforts to receive increased funding from the Ontario government.

OCASA’s Role

As  professional association, OCASA has had no official role or consultation around the Executive Compensation Program.  However, we do have ongoing consultation with the Council Employer Council and have been following this process closely, waiting for the end of the wage freeze.

OCASA consults with Council generally around best practices of administrative compensation (non-executive function), in support of recruitment and retention.  Typically, at this time of year we talk with Council about upcoming compensation guidelines to be released for April 1 and offer recommendations based on best practice, not only around compensation increases, but other practices and tools used at colleges to recognize promotion, increased responsibility, performance pay, etc.
Members can access the Administrative Guidelines released by Council in 2016 here. If you’ve never read them, you would find this informative.

With the expectation of the wage freeze being lifted, OCASA has continued dialogue around supporting the wage freeze exit for those non-executive functions (e.g. Deans/ Directors) whose salaries have remained frozen since 2012, and whose positions are experiencing compression with non-frozen salaries. For the moment, this discussion is on hold due to recent events.

This year, with Academic bargaining taking place over the summer, administrative compensation guidelines for all administrative staff will not be released by Council until the completion of bargaining (but retroactive to April 1). This is the usual practice and OCASA supports it.