DiPietro Reports UT on Track to Meet Most Important Goals

Photo by Adam Brimer

KNOXVILLE—The University of Tennessee is on track to achieving its most important operational and performance goals and making progress toward long-term sustainability, UT President Joe DiPietro told the Board of Trustees Friday.

DiPietro, who was elected by the board five years ago this month to serve as UT’s 25th president, provided a data-driven update. He cited progress toward goals set for him by the board for a three-year evaluation period of July 1, 2012, through June 30, 2015. That period and the evaluation are based on a board-initiated performance and retention plan begun in 2012.

Plan objectives are to drive achievement of strategic institutional goals, promote accountability and excellence at the chief executive level, and encourage retention of high-performing officers.

Based on review of DiPietro’s performance and at the recommendation of Vice Chair Raja Jubran, the board approved a one-time retention payment to DiPietro of $186,301. The amount represents almost 14 percent of DiPietro’s base salary in 2012, multiplied by three, or the number of years in the plan evaluation period.

“The comprehensive external assessment of President DiPietro’s performance during his first four years in office proved, unequivocally, that he established credibility, and that served as the basis of my personal assessment,” Jubran said. “Then when we started the budget advisory group, I saw how committed he is to correcting the financial ship of the University, and that impressed me even more. Because of the way he’s managed his tenure and the evaluation of his performance through the scope of these mostly objective metrics, I know he is the person to lead us for the next four years.”

The retention payment is to be made within 30 days of the board’s approval, so long as DiPietro remains in his position at that time. Payments are based on performance toward a weighted set of objective and subjective metrics tied to strategic goals.

DiPietro’s report to the board noted University achievements in student outcomes for fiscal years 2012 through 2015. Freshman retention rates have increased statewide 2.2 percent, and the number of degrees awarded has increased 4 percent, DiPietro said. Student retention and graduation rates both are critical to the success of Gov. Haslam’s Drive to 55 initiative.

UT has made significant progress toward its outreach goals, DiPietro said. From 2012 to 2015, the number of participants in all outreach and engagement activities increased more than 13 percent. The number of alumni who donate increased 17.5 percent, or from 26,323 to 30,926 alumni contributors. Fundraising totals for the period increased more than 103 percent, totaling approximately $303.3 million for fiscal year 2015.

UT exceeded goals for expanding research capacities in three of five areas, DiPietro said. The number of invention disclosures increased almost 30 percent. Revenue for license agreements increased more than 23 percent. The number of research and sponsored programs proposals increased more than 15 percent. A record decrease in federal research dollars, withdrawal of stimulus funds, federal funding sequestration, and nearly $2 million in long-term earmarks cut from the UT Chattanooga SimCenter led to challenges that must be addressed, he said.

“Research funding will continue to be more competitive and require more entrepreneurial efforts and an aggressive focus on developing new private sector partnerships and hiring top-notch researchers with capacity to secure additional research dollars,” DiPietro said.

DiPietro pledged that University leaders also will continue working to close approximately $83 million in market pay gaps in compensation for faculty and staff statewide.

“We’ve made progress in this area, but the gap will continue to increase without consistent funding across the board,” he said. “We’re committed to seeking that funding and to reducing the salary gap by 15 percent annually for the next five years.”

One year after introducing an initiative to address the University’s “unsustainable business model,” DiPietro said he’s pleased with ownership of the problem taken by chancellors. Progress on the initiative will be the focus of a November board retreat.

“While we’re on track to secure our business model going forward, we must continue the good work that we’ve started,” he said. “Analyzing these effectiveness and accountability outcomes has made us more keenly aware of areas for improvement and where we anticipate challenges.”

DiPietro cited 30-year record low tuition increases in the current academic year as evidence of progress in achieving greater efficiencies to overcome funding challenges rather than relying solely on tuition and fee increases.

“Making the kind of progress I’ve described today takes serious teamwork and commitment and requires tremendous focus on the part of our chancellors, faculty, staff, students and System Administration,” DiPietro said. “It also requires the support of our board, alumni, policymakers and other partners across the state.

“As we work toward the achievement of new goals and objectives set by the board, we will remain diligent in providing leadership that lives up to the expectations of this board and our constituents when they think of a premier system of higher education. We owe that to ourselves and the people of Tennessee.”

The board recognized former faculty trustee Thad Wilson and long-time administrators Butch Peccolo and Lofton Stuart with honorary resolutions.

Peccolo, treasurer, chief financial officer and chief investment officer, plans to retire Dec. 31 after almost 40 years of service to the University. He was elected treasurer in 1990 and assumed the additional responsibilities of chief financial officer in 2012.

Stuart plans to retire Jan. 31, 2016, after 43 years with UT. Stuart’s entire career has been spent with the University, where he held a variety of leadership positions within development and alumni affairs, served as executive assistant to two UT presidents, and executive director of the UT Alumni Association.

In other business, the board approved:

• Retention payments recommended by DiPietro to five other executive officers participating in the executive retention and performance plan.
• Proposal to replace the above-mentioned performance and retention plan approved in 2013 with a performance-based variable compensation plan for the president and nine other, board-elected University officers. Proposed performance goals for 2015-16 also were approved.
• Compensation proposed by the board and recommended by Vice Chair Jubran for DiPietro under a new, four-year employment agreement, effective July 1, 2015, through June 30, 2019.
• Voluntary retirement incentive program for UT Martin faculty and staff who meet its eligibility criteria. The program offers a lump sum incentive payment of six months’ base salary.
• Student code of conduct for UT Knoxville that addresses recommendations by a review team and models best practices within the field of student conduct administration.
• Amendment of the rule of use of University property relating to no-trespass notices given by sworn law enforcement officers to non-affiliated individuals. The amendment does not apply to students or employees.
• Program of study leading to the degree of master of laws in U.S. business law at UT Knoxville. The program is designed for foreign lawyers and will provide access to additional legal training for students who have earned a foreign law degree and are seeking a credential in U.S. business law.
• FY15-16 compensation for University officers reporting to the president
• Employment agreement with President Emeritus Joe Johnson
• FY16-17 operating budget appropriations request for non-formula units
• FY16-17 capital outlay and capital maintenance projects
• FY16-17 revenue/institutionally funded projects
• FY15 annual flight operations report
• President’s annual report to the General Assembly
• Honorary degrees given by UT Knoxville to Robin Klehr Avia and Fred Smith
• Grant of tenure to Dr. Paul Dalhaimer by UT Knoxville
• Grant of tenure to seven UT Knoxville faculty members under expedited procedures

To view a link to the webcast of the full meeting of the Board of Trustees, visit bot.tennessee.edu.