Compensation

Version: 0001
Renewal Date: 7/1/2026

Objective #

The University of Tennessee Foundation, Inc. (UTFI), aspires to be a premier employer by recruiting, retaining and rewarding high performing staff. The UTFI compensation philosophy is to provide an overall compensation plan that is competitive with those of land grant university-affiliated foundations and local market pay levels for similar jobs. The UTFI compensation philosophy, moreover, is to provide management with the tools and flexibility needed to encourage, motivate and reward performance.

The compensation plan is the basis for managing UTFI’s most important resource, its people. The UTFI compensation system must be fair, equitable and effective, possessing both integrity and flexibility.

Policy #

UTFI desires to provide a compensation plan that will enable UTFI to attract, retain, engage and reward the talent needed to carry out the philanthropic mission and organizational goals of UTFI. To that end, UTFI is committed to maintaining wage and salary levels that are externally competitive, internally equitable and in compliance with all applicable laws and regulations. All employees will be compensated fairly, regardless of race, color, religion, sex, sexual orientation, national origin, age, disability, veteran status or marital status.

Subject to the guidance of the UTFI President and Chief Executive Officer, the Chief Financial Officer (CFO) & Treasurer and Senior Officer for Talent Management will administer the compensation policy.

The UTFI compensation plan will be guided by these four principals.

1. Compensation will be market-based.
2. Compensation will reward performance.
3. Compensation will be internally equitable.
4. Compensation will comply with all applicable state and federal laws.

Components of UTFI Compensation System #

UTFI will provide market-competitive compensation that rewards performance by incorporating these strategic components into the compensation system:

• Compensation schedule
• Base hourly wage (non-exempt employees) or salary (exempt employees) administration
• Compensation adjustment (Change in Status)
• Performance compensation (Merit & Incentive)
• Benefits

Compensation Schedule #

View the Compensation Schedule

Hourly Wage and Salary Administration #

The CFO will maintain a compensation schedule setting forth the job classifications used by UTFI and the base annualized hourly wage and salary range for each classification. The base hourly wage and salary ranges shall be market-based. The hourly wages or salaries of employees holding positions within the same job classification may vary within the base hourly wage or salary range for a variety of reasons including education, experience, proficiency and performance. The reasons for variation may also include initial hourly wage or salary at the time of hire (or promotion into the job classification), performance-based merit increases, cost of living in the region where the employee performs his or her duties, and other unique circumstances (i.e. counter-offer made to retain a valued employee).

Hiring Hourly Wage and Salary – In addition to the compensation schedule, the following factors should be considered when determining hourly wage or salary offers to prospective employees:

• Candidate’s relevant education and experience
• Candidate’s skills, knowledge and expertise
• Candidate’s current salary
• Budget resources
• Equal opportunity
• Internal equity vis-a-vis other employees in the classification
• Other factors pertinent to the particular candidate and position in question

Hourly wage or salary offers for all positions, except the campus vice chancellors and UTK chief athletics development officer, must be approved in advance of the offer, by the CFO. Pursuant to Article I, Section 4, Appendix C of the Affiliation Agreement, salary offers for vice chancellors for development and UTK athletics chief development officer must be approved by the UTFI President and campus chancellor or directors of UTK athletics. Salaries offered to UTFI officers are subject to confirmation by the UTFI Board of Directors, which has the authority to appoint and set compensation of officers.

Cost of Living Increases – From time to time the UTFI President and CFO may, in their sole discretion and as budget resources permit, recommend that the UTFI Board of Directors approve across the board cost of living hourly wage and salary increases. Care should be taken to ensure that cost of living increases do not dilute the overall philosophy of using compensation to reward performance.

Equity and Market Adjustments – From time to time it may be necessary and appropriate to adjust hourly wages or salaries in order to recognize significant market changes and to establish and maintain internal equity. Market and equity adjustments for all positions except the campus vice chancellors and UTK athletics chief development officer must be approved by the CFO. Market and equity adjustments for vice chancellors and UTK athletics chief development officer must be approved by the UTFI President and campus chancellor.

Below Minimum or Exceeding Maximum Pay Grade – Employees will not be paid a base hourly or salary below the minimum or above the maximum of the pay grade for their assigned classification.

Should employees be paid base hourly wages or salaries below the minimum of the position classification pay grade, market adjustments will be administered based on a schedule and amount supported by budget ability as warranted to meet the minimum of the pay grade.

The CFO may approve base hourly wages or salaries that exceed pay grades for employees who demonstrated level of performance and position within the competitive market justifies such compensation.

Factors to be considered in deciding to exceed the pay grade include: the local value of the position within UTFI, the consistent outstanding level of performance by the employee and the requirement of specialized skills and/or expertise to successfully perform the job duties.

Compensation Adjustment (Change in Status) #

For UTFI employees changing position or classification, a fair and equitable method of adjustment for compensation is established to maintain hourly wage and salary levels that are externally competitive, internally equitable and in compliance with all applicable laws and regulations. An adjustment may be considered a promotion, lateral transfer or downgrade. All compensation actions and adjustments must be approved by the CFO prior to being communicated to the employee.

Reclassification – A promotion is any personnel action resulting in the movement of an employee to a position requiring greater skills and responsibilities. It is the intent of UTFI to raise the employee’s salary to the appropriate rate identified in the pay grade for the new position. Promotional increases will be based on:

1. Salaries of incumbents in similar positions to ensure internal equity,
2. The promoted employee’s qualifications, including any related prior experience, skills contributions and potential,
3. The magnitude of the promotion, and
4. Advancement within the career path. Refer to TM0016.2 Career Path Policy.

Typically, a promotional increase will be determined using the established guideline for determining the starting hourly wage or salary for employees hiring into the new pay grade.

Lateral Transfer/Reassignment – A lateral transfer occurs when an employee moves to a new position assigned to the same pay grade as the position from which the employee is moving. Unless the lateral transfer qualifies as a career progression, an employee making a lateral transfer is not eligible for an hourly wage or salary adjustment other than the usual merit or cost of living increases. There are three types of lateral transfers which qualify as career progressions:

1. New Skills or Knowledge: The new position requires the use of a significantly new set of content knowledge or skills.
2. Individual Contributor to Managing People: The new position involves a change from individual contributor or specialist to managing people, projects, etc.
3. Increase in Depth or Level of Complexity: The new position requires an increase in the depth or level of complexity in a particular area of expertise.

In the case of lateral transfers that qualify as career progressions, the employee is eligible for an hourly wage or salary adjustment within the pay grade based on the new responsibilities and skill sets involved.

Downgrade/Demotion – A downgrade occurs when an employee moves from a position in one job classification to another position which is classified in a lower pay grade. A downgrade may be employee or employer initiated. The following guidelines apply in determining the effect of the downgrade on an individual’s salary rate.

1. When an employee is assigned to a position with a lower pay grade through no fault of the employee’s (i.e. reorganization, reduction in force), the employee’s hourly wage or salary typically will not be reduced. Each situation will be reviewed on a case-by-case basis.
2. When an employee voluntarily requests reassignment to a position in a lower pay grade, the employee’s hourly wage or salary typically will be reduced to a level commensurate with the new pay grade. Each situation will be reviewed on a case-by-case basis.
3. If the reduction in pay grade is the result of disciplinary action, the employee’s hourly wage or salary will typically be adjusted to a level commensurate with the new pay grade. Any such reduction must be documented in the written notice of demotion provided to the employee pursuant to TM0002 Disciplinary Action Policy.
4. If reduction in salary is warranted, the reduction will be effective on the date of the reassignment.

Performance Compensation #

One of the driving forces behind the current UTFI structure was the desire to create a performance compensation structure that rewards high performers. In order to fulfill that goal, each year the UTFI President will design a performance compensation plan.

In keeping with the UTFI philosophy of rewarding performance, performance compensation may be a merit adjustment of salary or a result of incentive compensation. Refer to TM0016.3 Incentive Compensation Policy for details.

1. The goals and components of the plan may vary from year to year, but will be based on the following parameters:
   • The performance compensation plan should reward those who exceed performance goals, not simple meet performance goals.
   • The performance compensation plan should drive behavior that results in increased organizational performance.
   • There may be different performance compensation plan goals and rewards for different groups of employees, geared to each group’s unique value in assuring UTFI’s success.
   • The performance compensation plan goals will be measured on the fiscal year.
   • UTFI retains the absolute right to suspend or cancel any given year’s performance compensation plan or to decrease the awards outline in the plan if, because of market downturn or other adverse financial conditions, funding for the plan becomes unavailable.
2. Annual merit and incentive adjustments will, to the extent budget resources permit, be determined as follows:
   • UTFI President and Chief Executive Officer:
     • Pursuant to Article II, Section 1(a), of the Affiliation and Services Agreement between The University of Tennessee and The University of Tennessee Foundation, Inc, (“the Affiliation Agreement”), the authority to set the compensation of the UTFI President ultimately rests with The University of Tennessee’s Board of Trustees.
     • The UTFI Board of Directors (“the Board”) shall, in consultation with the University’s President, annually:
       • Set performance goals for the UTFI President,
       • Evaluate the President’s performance against those goals, and
       • Recommend the UTFI President’s salary adjustment to the University’s Board of Trustees through the University President.
   • All other UTFI officers:
     • Pursuant to Article V, Section 6, of the UTFI bylaws, the UTFI Board sets the compensation of UTFI officers (other than the President & CEO).
     • The UTFI President & CEO shall annually:
       • Evaluate each officer’s performance against the annual performance goals and
       • Recommend each officer’s salary adjustment to the Board.
3. Vice chancellors and UTK athletics chief development officer:
   • Pursuant to Article I, Section 4, Appendix C to the Affiliation Agreement, the UTFI President and campus Chancellors or Directors of UTK Athletics have joint responsibility for setting the compensation of the vice chancellors and UTK athletics chief development officer.
   • Appendix C of the Affiliation Agreement details the procedure for setting the vice chancellors’ and UTK athletics chief development officer’s compensation and is adopted in its entirety. A copy is attached as an Appendix at the end of this policy.
4. All other UTFI employees (including employees leased from The University of Tennessee):
   • Each vice president, vice chancellor, other department head and the CFO shall annually:
     • Evaluate each employee’s performance against the annual performance goals and
     • Recommend each employee’s hourly wage or salary adjustment to the CFO.
   • The vice presidents, vice chancellors, other department heads or CFO may delegate the evaluation and recommendation process to line managers who have direct supervisory responsibility over the employee being evaluated.

Benefits #

Benefits, such as health insurance and retirement plans, are an important component of the UTFI compensation strategy. View the comprehensive employee benefits list.

At the time this policy is adopted, all UTFI employees are leased by UTFI from The University of Tennessee pursuant to the Employee Services Agreement between UT and UTFI. By the terms of that agreement all leased employees are eligible to participate in all UT benefit programs (provided the employee meets the eligibility requirements).

Scope and Application #

This policy applies to all UTFI employees, including full-time staff, part-time staff, student workers, student interns and temporary staff for the organization.

Policy Implementation #

Subject to the guidance of the UTFI President, the CFO is the final management authority on all compensation administration issues including but not limited to:

• Approving the overall compensation administration program objectives and general policies.
• Recommending the structure, adjustment percentage and merit increase budget.
• Approving any significant changes or exceptions to the compensation administration program.
• Approving all hourly wages or salaries and adjustments.

Vice Presidents and Vice Chancellors

The vice presidents and vice chancellors play a critical role in maintaining the compensation program and ensuring UTFI pay practices continue to align with the compensation philosophy and sound compensation principles by:

• Developing, in conjunction with the CFO, an appropriate starting hourly wage or salary for new hires.
• Conducting performance evaluations.
• Recommending hourly wage or salary adjustments to CFO.
• Ensure staff understand the compensation program and future changes.
• Work with staff to keep job descriptions current and accurate.

The UTFI Office of Talent Management (UTFI TM) will serve as the central point for all compensation, payroll and other human resources transactions. UTFI TM has several responsibilities in managing compensation:

• Communicate the program and pay guidelines to help managers and supervisors understand the aspects of the compensation program.
• Provide information, data and advice on pay levels, policies and practices.
• Reviewing hourly wage or salary adjustments for employees.
• Reviewing and maintaining job descriptions for all jobs.
• Analyzing and recommending preliminary assignments of jobs to pay grades for CFO review and approval.
• Provide open, honest and timely feedback to staff on compensation issues, answering both specific and general questions about pay.

Definitions #

Bi-Weekly (hourly) paid employee: Bi-weekly paid employee is one who records worked time
hours. The employee is paid every two-week period according to payroll schedules established by
the payroll office.

Downgrade: A downgrade occurs when an employee moves from a position in one job
classification to another position which is classified in a lower pay grade.

Merit Pay: Financial incentive based on performance.
Incentive Pay: A financial incentive payment system based on rewarding employees for achieving
or exceeding certain organization-wide, campus specific, and individual performance goals.

Lateral Transfer: A lateral transfer occurs when an employee moves to a new position assigned to
the same pay grade as the position from which the employee is moving.

Promotion: A promotion is any personnel action resulting in the movement of an employee to a
position requiring greater skills and responsibilities.

Salary paid employee: Salaried employee is one paid the same amount every pay period, regardless
of how many hours they work.

Penalties/Disciplinary Action for Non-Compliance #

Violations of the policy and any subsections herein may be cause for disciplinary action up to and
including termination of employment.

Policy Administration #

The table below identifies the responsible senior official, contact information and administrative
responsibilities of policy matters.

Subject Matter	Office Name/Position Title	Email/Web Address
Authority	UTFI Chief Financial Officer & Treasurer	[email protected]
Point of Contact	UTFI Executive Director of Talent Management	[email protected]
Policy Location	Net ID Access Only
Policy Review Schedule	Annual Review

History of Revision #

Related Policies/Guidance Documents #

Policy

TM0002 Disciplinary Action
TM0016.2 Career Path Policy
TM0016.3 Incentive Compensation Policy

Procedure

Benefits
Compensation Schedule