Update on merit compensation plans

January 24, 2021

Dear Baylor Faculty and Staff:

Thank you for your selfless service and many contributions to another successful start of a semester in the midst of the COVID-19 pandemic. Our science-based, comprehensive approach to monitoring and preventing the virus has proven effective in our ability to mitigate and rapidly respond to COVID-19 cases among students, faculty and staff and allow us to continue our in-person educational experience.

While our fall enrollment was very strong and our retention rate into the spring semester stands at 95% so far, the University’s COVID-19 related expenditures continue to outpace the initial projections that informed the current fiscal year’s budget. In addition, these increased expenditures have offset any gains in revenues from our strong enrollment. As I survey the higher education landscape and confer with many of my colleagues, this is a common refrain.

Let me assure you that Baylor’s financial condition remains a point of strength, due in part to the significant cost avoidance, cost reduction and reallocation strategies that we implemented in the budget for this fiscal year. However, we must continue to be prudent and fiscally cautious as the uncertainties and public health needs related to the pandemic are not expected to be resolved by the end of this semester.

As you recall, the President’s Council pledged to revisit in January the decision to not implement a merit compensation program for faculty and staff as part of the current, FY20-21 budget. Over the past two weeks, our team has thoughtfully and prayerfully reconsidered this decision. The outcome, however, remains the same. For the long-term health of the University, the fiscally responsible decision is to not provide a merit program in the current fiscal year, which runs through the end of May.

We are very encouraged to report that as we work to develop the FY21-22 budget for consideration by the Board of Regents in the months ahead, it is our goal to incorporate a merit compensation program at some level for the coming year. In surveying other universities, very few are in a position to consider or incorporate a merit compensation program in the near future. We remain positive in our financial planning for the coming fiscal year.

On behalf of the President’s Council, I truly appreciate your collective dedication, flexibility, contributions, sacrifices and service during the COVID-19 pandemic. Baylor is incredibly strong and resilient, and we look forward to a more stable, predictable financial environment in the months ahead.

Sincerely,

Linda A. Livingstone, Ph.D.
President

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