The University of Michigan is comparable to peers in its compensation practices and its approach to disclosing total pay based on state law, according to an analysis of dozens of institutions across the country.

Still, the review by U-M Human Resources and an external consultant revealed an opportunity to strengthen controls and use of additional or non-base pay across the university. Non-base pay includes such pay as discretionary bonuses, salary supplements, incentive pay and administrative differentials, among others.

President Mark Schlissel requested the review of compensation practices during his first year in office. The analysis looked at three areas: executive compensation levels, the use of non-base pay, and practices on public disclosure of compensation for all employees. Data on compensation practices came from more than 50 peers and data on transparency and disclosure came from more than 20.

Compensation for U-M executives (top management, vice president and dean roles) is near the top among public peers and in the median of private peers, placing it at the 75th percentile overall for base salary, total cash compensation, and total compensation and benefits. Given the university’s scale and scope, U-M’s compensation program is appropriate and should continue, according to the analysis.

“This feels right to me in striking the balance between continuing our competitive edge for the best administrative talent and being fiscally responsible, especially given the scale and complexity at Michigan,” Schlissel said in accepting the recommendations.

Benchmarking showed use of non-base pay or variable pay is common among peers, and is often used to recruit, retain and reward employees. The analysis showed all institutions studied used non-base pay to varying degrees. More U-M executives and deans receive non-base pay than peers, although award levels are consistent with the market.

Non-base or variable pay also is viewed by U-M and peer institutions as fiscally sound, as the non-recurring and discretionary nature does not create recurring budget impact, according to the report.

Like U-M, most peer institutions are decentralized and use of non-base payments often is not centrally tracked or administered. The analysis identified the need to bring more coherence and consistency to how such payments are used and tracked, and U-M will explore how to improve guidance and processes around non-base and variable pay.

“As we look into this matter we will strive to balance the desire for greater consistency around the use of these payments with the desire to maintain decentralized control at the unit level,” said Kevin P. Hegarty, executive vice president and chief financial officer.

The analysis showed there is no standard practice across institutions in disclosing compensation. U-M and other institutions largely disclose compensation in line with state or other requirements, and public institutions disclose far more than private peers.

Michigan state law requires the disclosure of base salaries paid by general fund dollars. U-M exceeds that requirement by also including employee name, appointing department and appointment fraction. The university also lists all faculty and staff not paid with general fund dollars.

The report recommended maintaining existing disclosure practices and the president accepted that recommendation.