For discussion FCR(96-97)30 on 28 June 1996

ITEM FOR FINANCE COMMITTEE

HEAD 190 - UNIVERSITY GRANTS COMMITTEE
Subhead 492 Grants to UGC-funded institutions

Members are invited to approve -

(a) the new salary scales, with effect from 1 July 1996, for the heads of the University of Hong Kong (HKU), the Chinese University of Hong Kong (CUHK), the Hong Kong University of Science and Technology (HKUST), the Hong Kong Polytechnic University (PolyU), City University of Hong Kong (CityU), Hong Kong Baptist University (HKBU) and Lingnan College (LC);

(b) the transitional arrangement concerning the application of the new salary scales to the incumbent heads of HKU, CUHK and HKUST and the designated head of CUHK; and

(c) the arrangement whereby the heads of PolyU, CityU, HKBU and LC should, like their counterparts in the other three University Grants Committee-funded universities, determine the salaries of their senior administrative staff in consultation with the governing bodies of the respective institutions.



PROBLEM

We need to revise the salary scales of the heads of HKU, CUHK, HKUST, PolyU, CityU, HKBU and LC to take account of the change in the nature and scale of their responsibilities and those of senior positions in the Civil Service.

PROPOSAL

2. On the advice of the University Grants Committee (UGC), we propose -

  1. the following salary scales1 for the heads of HKU, CUHK, HKUST, PolyU, CityU, HKBU and LC -

    Head of Institution Existing Scale Proposed Scale

    Vice-Chancellor, HKU

    98% of the Chief Secretary's salary

    D8

    Vice-Chancellor, CUHK

    98% of the Chief Secretary's salary

    D8

    President, HKUST

    98% of the Chief Secretary's salary

    D8

    President, PolyU

    D7

    D8

    President, CityU

    D7

    D8

    President and Vice-Chancellor, HKBU

    D6

    D7

    President, LC

    D5

    D6

  2. that the heads of institutions at PolyU, CityU, HKBU and LC should, in line with the current practice at HKU, CUHK and HKUST, determine in consultation with the governing body of respective institutions the salaries for the senior administrative staff (at the level of Pro-Vice-Chancellor / Vice-President / Associate Vice-President and above), provided that the average salaries of all professors and equivalent senior administrative staff do not exceed the professorial average, and that any resultant revisions must have regard to internal relativity and must be in line with the agreed policy of keeping the terms of service of the staff concerned broadly comparable to, but no better than, those of comparable grades in the Civil Service.
  3. the proposed arrangements in (a) and (b) above should take effect from 1 July 1996, i.e. the beginning of the 1996-97 academic year of the UGC-funded institutions, save for the downward revision of salary which would not be applied to the incumbent heads of HKU, CUHK and HKUST and the designated head of CUHK during the validity period of their respective contracts.

JUSTIFICATION

3. At present, we link the salaries of the Heads of the UGC-funded Institutions (HoIs) to that of senior civil servants. We set the salaries of the heads of HKU, CUHK and HKUST at 98% of the Chief Secretary's salary, and those of PolyU and CityU at D7 and HKBU and LC at D6 and D5 respectively. At our request, the UGC commissioned a consultancy in September 1995 to review the salaries of the heads of the seven tertiary institutions subject to its funding purview. The review takes into account -

  1. the change in the nature and scale of responsibilities of the HoIs and senior civil servants in recent years;
  2. the subvention policy that the terms of service of staff in the subvented sector should be broadly comparable to, but no better than, those of comparable grades in the Civil Service; and
  3. the remuneration packages of heads of leading overseas universities which use English as the medium of instruction in the Asia Pacific region, the UK and the USA.

Findings of the Consultancy

4. Based on the job evaluation results, the Consultants concluded that -

  1. the heads of HKU, CUHK, HKUST, PolyU and CityU are within the same job evaluation boundaries as policy secretaries in the Civil Service (D8 rank);
  2. the President and Vice-Chancellor of HKBU is within the same job evaluation boundaries as Heads of Group I departments in the Civil Service (D7 rank); and
  3. the President of LC is within the same job evaluation boundaries as Heads of Group II departments in the Civil Service (D6 rank).

5. The Consultants also concluded that the remuneration levels received by HoIs in Hong Kong are somewhat lower than those of HoIs at private non-religious universities in USA; considerably lower than those of HoIs in Singapore in terms of total cash but broadly in line in terms of total remuneration; somewhat higher than those of HoIs in the UK and at public universities in USA; and considerably higher than those of HoIs in Australia.

6. On comparison between the salary levels of HoIs and those of the Chief Executive Officers (CEOs) in the private sector, the Consultancy Report shows that the salaries of HoIs in all countries or territories under study are lower than those for CEOs in the private sector and that the difference between the salaries of HoIs and CEOs in Hong Kong appears greater than that in the UK and USA. Finally, the salary levels of HoIs in Singapore, Australia and USA are generally lower than those of the Prime Minister/President and in line with the Cabinet Minister/Secretary whereas for the UK, the salaries of HoIs are higher than those of the Prime Minister but lower than those of the Permanent Secretary of the Cabinet.

7. A summary of the findings of the consultancy is in the Enclosure.

UGC's Recommendations and Administration's Assessment

8. Based on the above findings, the Consultants and the UGC have recommended that the heads of the UGC-funded institutions should be remunerated at the levels described in paragraph 2(a) above.

9. Currently all academic staff in the Professor grade at the seven UGC-funded institutions and all senior administrative staff at HKU, CUHK and HKUST, who are normally designated as Deputy Vice-Chancellor, Pro-Vice-Chancellor or Vice-President, are remunerated on the basis of individual merits. Their salaries are determined by the Vice-Chancellor/President in consultation with the governing bodies of the respective institutions. This arrangement gives the HoIs flexibility in attracting suitably qualified staff to take up the posts concerned. In line with the spirit of the common salary scales for all UGC-funded institutions approved by Members in July 1992, the UGC recommends that the above practice be extended to the senior administrative staff at CityU, HKBU, LC and PolyU. In practical terms, the institutions would be allowed to offer appropriate salaries and allowances on an individual basis, provided that the average salaries of all professors and equivalent senior administrative staff do not exceed the professorial average2 , and that any resultant revisions must have regard to internal relativity and be in line with the agreed policy of keeping the terms of service of the staff concerned broadly comparable to, but no better than, comparable grades in the Civil Service.

10. The UGC has suggested that the proposals should take effect from November 1994 when the former City Polytechnic of Hong Kong (CPHK), Hong Kong Polytechnic (HKP) and Hong Kong Baptist College (HKBC) legally acquired university status and title. The LC has yet to receive self-accrediting and university status but the UGC recommends that in order to maintain relativity with academic staff on university salary scales at other institutions, the remuneration of the head should also be backdated to November 1994. We have difficulties in accepting this recommendation because it is Government's established practice not to backdate the implementation of salary reviews in the Civil Service, and this should apply equally to subvented organisations. We therefore recommends that the proposals should take effect from a current date, i.e. 1 July 1996.

11. As regards the salaries of the heads of HKU, CUHK and HKUST, we accept the UGC's view that we should honour existing contractual obligations and hence its recommendation that the proposed salary scale (which would result in a downward adjustment of the present salary level) should not apply to the incumbents in HKU, CUHK and HKUST and the designated head of CUHK during the validity period of their respective contracts. However, all new appointees will be remunerated at D8.

12. The UGC has further recommended that the governing bodies of HKU, CUHK and HKUST may offer the incumbent, on expiry of his current contract, the same salary in dollar terms when entering into a further contract on condition that the amount of salary would be frozen until the D8 salary level overtakes it. In principle, we accept the UGC's recommendation for staff
management and continuity reasons. However, we consider it premature to seek Members' approval of this recommendation at this stage in the absence of an actual case. We propose to examine the cases as they arise in future and, where justified, seek Members' approval in the normal way then.

FINANCIAL IMPLICATIONS

13. The upward salary adjustments for the heads of CityU, HKBU, LC and PolyU would cost about $340,000 annually, while the savings from the downward salary adjustments for the heads of HKU, CUHK and HKUST would amount to about $980,000. However, since the downward salary adjustments will not affect the incumbents, the savings would not be realised until the contracts of the incumbents expire or the incumbents leave the service before the end of their contracts.

14. The proposed new arrangement for determining the salary of senior administrative staff of CityU, HKBU, LC and PolyU may result in an upward salary adjustment requiring additional funds of about $870,000 annually. We estimate this by applying the same percentage increase on salary of the heads to that of the senior administrative staff. The actual requirements, however, would depend on the precise salaries as determined by the HoIs in consultation with the respective governing body. The institutions will meet from their triennial grants any additional funding requirements arising from the implementation of the proposed new salary arrangements for both their heads and the senior administrative staff.

BACKGROUND INFORMATION

15. The UGC is currently funding seven institutions of higher education, namely HKU, CUHK, HKUST, PolyU, CityU, HKBU and LC. The salaries for the heads and senior administrative staff of these institutions are not uniform.

16. In July 1982, Members approved the formula for setting the salaries of the Vice-Chancellors of HKU and CUHK at 98% of the Chief Secretary's salary (FC Item No. B61 dated 28 July 1982). The same formula was applied to the President of HKUST when Members approved the general principle for setting the salary scales and conditions of service for staff of HKUST in June 1988 (FCR(88-89)28).

17. In approving the new salary scales for staff engaged primarily in degree level work at the then CPHK, HKP, HKBC and LC in July 1992 (FCR(92-93)54), Members noted that, pending a further review, we would retain the salary scales for the Heads and senior administrative staff of these four institutions. The four institutions subsequently submitted proposals to the Administration to seek revisions in these salary scales. We decided that the UGC should conduct a comprehensive review of the salaries of the heads of all seven UGC-funded institutions, having regard to the change in nature and scale of the responsibilities of senior civil servants in recent years and the subvention policy that the terms of service of staff in the subvented organisations should be broadly comparable to, and no better than, those of comparable grades in the Civil Service.

18. The review took place during the period September 1995 to March 1996. The UGC submitted its recommendations to the Administration in May 1996.

Education and Manpower Branch
June 1996

1 -- The salary points shown in the table are the respective points in the Civil Service Directorate Pay Scale
2 -- Professorial average applies to the salaries for professors in all seven UGC-funded institutions. On the basis of a minimum salary level, currently at $83,935 (broadly equivalent to D1 in the Civil Service Directorate pay Scale), the salary level may vary from individual to individual but the average salary of all professors should not exceed the "professorial average", currently at $103,815 (broadly equivalent to D2 in the Civil Service). The minimum and "professorial average" salaries are revised annually in accordance with the civil service pay rise. At present, the salaries of the equivalent senior administrative staff at HKU, CUHK and HKUST are set in line with the above arrangement.


Last Updated on 2 December 1998