SALT LAKE CITY — The headhunter hired to conduct the search for the next president of the University of Utah will charge a minimum of $100,000 for his services.
“In this instance, we have agreed upon a fixed fee of $100,000 plus administrative and direct out-of–pocket expenses,” states a letter from R. William Funk and Associates of Dallas to David Buhler, Utah commissioner of higher education.
The letter, obtained through a state Government Records Access and Management Act request, outlines “the fee and billing arrangement to which we have agreed,” Funk wrote.
“In addition to professional fees, we are reimbursed for expenses related to the search. These include the actual cost of direct, out-of-pocket expenses (candidate and consultant travel, lodging and related expenses, advertising and background checks) as well as administrative and support expenses (primarily communication, clerical, reproduction and computer usage).
"Direct out-of-pocket expenses will be billed on a monthly basis as incurred. Administrative and support expenses will be billed at 10 percent of our professional fee (or $10,000 in this instance)," the letter stated.
The total cost of the search will likely not be known until after the selection of the president who will succeed U. President David Pershing, who is retiring.
The letter further states that the firm's "fees and expenses are not contingent upon our success in placing a candidate with your organization," although in more than 30 years of conducting professional searches, Funk has placed some 400 presidents and chancellors, according to a 2014 Dallas Morning News profile.
In May, Pershing announced he was moving up the timetable of his planned retirement in the aftermath of a high-profile rift between University of Utah Health and Huntsman Cancer Institute.
Pershing, who has served as U. president since 2012, will return to a faculty position at the conclusion of the presidential search. He will serve as president until his successor is appointed.
Funk noted in his letter to Buhler that his firm’s fees “are typically based on 33 1/3 of the total first year’s cash compensation plus bonus for the position we are seeking to fill.”
For fee calculation purposes, “cash compensation includes base salary and sign-up and incentive bonus payments,” the letter states.
The starting salary or bonuses for the U.'s next president are as yet unknown, but Pershing’s annual base salary is $438,007, according to The Chronicle of Higher Education.
If the 16th president of the University of Utah is paid a like amount as a starting salary, the consultant’s fees would have been about $146,000.
George Mason University professors Judith A. Wilde and James H. Finkelstein, who have researched the use of executive search firms in higher education, found the basic fees for searches for presidents, provosts and chancellors at four-year public colleges and universities ranged from $25,000 to $160,000.
"The average was just below $80,000. Most of these were a firm, fixed price,” said Wilde, chief operating officer of the Schar School of Policy and Government at George Mason in a recent interview about the 2016 study.14 comments on this story
"The next largest group charged a percentage of the first-year’s base salary for the person who was hired," she said.
Some firms awarded basic fees also charged administrative fees or billed for "indirect expenses," she said.
An earlier statement from Utah System of Higher Education said the next public announcement from the University of Utah presidential search committee will be its selection of three to five finalists.
The finalists' names will forwarded to the Utah State Board of Regents for consideration. The regents have sole authority to hire and fire college and university presidents.