Conference paid out performance bonuses prior to downsizing

The Pac-12 distributed performance bonuses to employees in its San Francisco headquarters, from commissioner Larry Scott to midlevel managers, approximately one month before half the staff was laid off or furloughed, the Hotline has learned.

Four employees from the Pac-12 Networks confirmed that their bonuses were paid this summer for performance in the 2020 fiscal year. Each requested anonymity because of the personal nature of the issue. One was willing to state the amount of the bonus: $10,000. Another indicated the bonuses covered a range in the lower five figures.

All four said they usually received bonuses in September or October for the prior fiscal year and

were surprised by the expedited timeline.

Bonuses for employees on the conference side were also paid in July, which is the standard schedule for that division. One month later, the Pac12 laid off or furloughed 94 of its 196 employees.

“I have no idea why they changed the schedule, but I was surprised,’’ one network employee said. “I was just told, ‘Heads up, bonuses will be paid at the end of the week.’ “

A conference spokesperson said the payment timeline was accelerated to coincide with salary reductions for the highly-paid employees and because — with furloughs and layoffs possible if the football season was disrupted — the payments could be used to “support the retention of key employees.”

The spokesperson added that salary reductions and bonuses for all employees have been designed to track with similar moves on the campuses, where the loss of athletic revenue due to the pandemic has caused a series of expensereduction measures.

Pac-12 revenues have taken a hit across two fiscal years: In 2020, because of the cancellation of the NCAA Tournament; and in 2021, because of the disrupted football season.

The conference budget for FY21, which was approved by the presidents and chancellors, includes a 9% reduction in operating expenses at headquarters. That’s expected to translate to about $3.6 million, based on financial data available from previous years.

The presidents also approved the use of conference reserve funds to bolster the FY20 distributions to the schools.

All told, the Pac-12 has taken a series of measures to reduce expenses:

• In early April, it announced a 20 % salary reduction for Scott and 10% cuts for members of his senior staff in both conference and networks divisions. The moves covered the remainder of the fiscal year.

The performance bonuses for FY20 that were paid in July were reduced to align with the salary reductions, the conference spokesperson said.

• On July 6, the conference announced salary reductions for senior-level staffers for the entirety of the 2020-21 academic year. Scott said he would take a 12% pay cut for FY21, which amounted to about $636,000 based on the most-recent financial information available for his total compensation.

In addition, all employees earning more than $100,000 were asked to take tiered salary reductions (down to 5%) for the full academic year.

In late July, after the FY21 salary reductions were revealed, the performance bonuses for FY20 were paid.

On Aug. 11, the presidents voted to postpone the football season.

• Then came the downsizing.

On Aug. 26, the Pac-12 announced significant cuts and reductions, with 15 layoffs and 79 furloughs.

The networks division laid off 10 employees and furloughed 66.

The conference division laid off five employees and furloughed 13.

(The furloughs were expected to last at least three months, although that timeline could change if the Pac-12 returns to play this fall, as expected.)

There were no additional announcements of salary reductions.

The Hotline has confirmed that some of the employees who received performance bonuses in July were placed on furlough.

The size of the bonuses paid this summer to senior executives, including Scott and Pac-12 Networks president Mark Shuken, is not known.

The figures likely won’t become publicly available until the spring of 2022, when the conference releases its financial data for FY21.

The release typically is on a nine-month delay.

However, estimates for the bonus payments can be made based on compensation data included in the conference’s FY19 tax filings.

Those show that Scott earned $2.2 million in “bonus and incentive compensation” — in addition to his base salary of $2.95 million. His base pay and bonus are approved by the conference’s CEO Group.

The tax documents also show approximately $1.35 million in bonus payments for the next 10-highest paid employees across the conference and networks divisions. That total includes $314,000 for Shuken, the president of the networks.

The conference declined to state how many performance bonuses were paid this summer to the 196-person staff (at that time), or the total amount distributed.

But the number is likely substantial. The Hotline confirmed that multiple middle-level managers received them.

One manager pegged the number of employees receiving bonuses at 50. Even if the total is significantly lower, the bonuses paid this summer — including those to Scott and all the senior executives — could approach $4 million based on the data from previous years.

At an average salary of $100,000 (including benefits) for non-managerial employees, that $4 million in bonuses would equate to about 40 full-time positions.