In the face of grim financial situation, the California State University (CSU) leaders approved salary packages for the presidents of seven campuses, with two of the new presidents receiving 10 per cent pay hikes.
This decision of high-package salaries comes under a new compensation policy allowing private foundations to help foot the bill.
But this has sparked controversy with the campus groups and the California Faculty Association, blasting the University for providing pay hikes at a time of rising tuition fees and deep budget cuts.
Like Us on Facebook
''It is ridiculous that every two months students and faculty have to come to Long Beach and ask the system's leaders not to give themselves a raise at the expense of quality higher education,'' said Kim Geron, vice president of the California Faculty Association. ''The trustees and administration seem absolutely tone deaf.''
Yet, the salary packages still need to get the votes of the full Board of Trustees. The final amount will depend on whether Californian voters approve Governor Jerry Brown's tax increase measure in November and whether CSU will accept the 'tuition buy-out' deal offered by the state legislature.
If voters reject the tax measures, CSU would lose $250 million in funding. Meanwhile, if CSU accepts the buyout, it would lose $132 million in revenue from a 9 percent tuition increase this fall in return for an extra $125 million in funds for 2013-14.
Chancellor Charles Reed said accepting the deal would create "an administrative nightmare" as about 300,000 of the system's 430,000 students have already paid their fall tuition.
The university could offer tuition credit instead of refunds, if trustees decide to roll back the fee hike, he said.
Reed stressed repeatedly that foundations will raise money separately for the pay increases. "No funds from the foundations will be coming from any financial aid or student scholarship money," he said.
The compensation policy might have increased the presidents' salaries through private funding but it has not gone too well with the critics who have been vocal about their displeasure.
The policy was adopted after a firestorm of criticism over boosting presidents' pay during a period of financial crisis caused by state funding cuts.