U president Eric Kaler gets contract extension and 2.5% pay raise

Eric Kaler, the president of the University of Minnesota, got a five-year extension on his contract and his first pay raise in three years on Wednesday amid rave reviews of his job performance from the Board of Regents.

It voted unanimously to extend Kaler's contract to 2020, and to increase his base salary from $610,000 to $625,250.

Board chairman Richard Beeson called Kaler "an outstanding leader," and said the board wanted to ensure that he is not lured away by another university.

"Our goal is to retain him here," Beeson said. He noted that Kaler runs "one of the largest organizations in the state of Minnesota," as well as one of the largest universities in the country, with a $3.6 billion budget and more than 50,000 students on the Twin Cities campus.

Beeson cited a list of Kaler's accomplishments on issues that continue to challenge the U, including his role in persuading the Minnesota Legislature to fund a two-year tuition freeze for undergraduate residents. He also praised Kaler for making good on his pledge to start trimming tens of millions of dollars in administrative costs.

Technically, this is the first pay raise Kaler has received in three years — he turned down raises over the past two years, asking the regents to use the money for scholarships.

Kaler, 57, who has been president since July 2011, had one more year to go on his original contract. Under the new contract, which he signed Wednesday, his total compensation — including fringe benefits — will rise from $743,800 to $784,700 a year.

"It is a lot of money," Beeson conceded. But he said that Kaler's compensation ranks sixth among the leaders of Big Ten universities, and that it's a competitive marketplace.

"For us to be successful, we need him here, doing the work that he's doing, for another five or six years or more," Beeson said.

Other regents, too, were effusive in their praise.

"We've had very high expectations for this president," said Regent Clyde Allen. "I think those expectations are being exceeded day in and day out." Said Regent John Frobenius: "We're blessed to have an outstanding president at this point in time."

Kaler was rated for "exceptional performance" in a regents' performance review in June. He was described as "a pre-eminent scholar" who has been "refreshingly transparent and inclusive," particularly working with faculty and staff members.

Will Durfee, a faculty leader and engineering professor, said: "Overall, I've been impressed with what he has done in a short period of time." He credited Kaler with, among other things, lobbying for the tuition freeze and setting high but "achievable" goals for the university as part of a new strategic planning initiative.

Beeson acknowledged that Kaler's new pay package may raise some eyebrows at a time of rising college costs and student debt. But he said Kaler's compensation was in line with that of his peers. The Big Ten universities pay their top leaders $395,000 to $1.3 million a year, according to a university survey.

Beeson called the contract a "pre-emptive and proactive" move to fend off potential suitors.

Kaler, who has a doctorate in chemical engineering from the U, confirmed that he regularly gets calls from other universities searching for top leaders. "I got two last week," he said, but added that he has not been tempted to leave.

"No, my wife and I love it here," he said. "It's a wonderful institution. I graduated from here. I do love the place."

Maura Lerner • 612-673-7384