DEFERRED COMP-NONPLAN SERVICES

104th Regular Session Introduced by Rob Martwick

Arizona Board of Regents must cap university president pay at $500,000 annually and limit bonuses to 15% of salary, only for duties beyond requirements and benefiting the instituti

Referred to Assignments

SB 1453 — Summary (Arizona, 2025)

Bill number / title: SB 1453 — (as introduced) Amend ARS §15-1626 (Arizona Board of Regents) — university presidents; ABOR; maximum compensation
Introduced: Feb 19, 2025 (Sen. David C. Farnsworth)
Status / timeline: Passed both chambers, signed by Governor 2025-06-20; becomes effective 2026-01-01. Companion: HB 1134.
Note on source material: The provided document includes text from multiple jurisdictions with the same bill number (including an Illinois deferred‑compensation bill). This summary focuses on the Arizona SB 1453 text that amends Arizona Revised Statutes §15-1626 (Board of Regents).

Purpose / intent

The bill adds explicit limits and conditions on compensation that the Arizona Board of Regents may set for university presidents. It seeks to cap salaries and supplemental compensation, and to restrict bonuses/incentives to pay tied to performance that goes beyond assigned duties and directly benefits students, staff, or faculty.

Key provisions

Adds a new subsection to ARS §15-1626(A)(2) establishing compensation rules for university presidents:

Annual salary cap: A university president’s annual salary may not exceed $500,000.
Annual supplemental compensation cap: The maximum aggregate value of bonuses, incentives and other compensation (including nonmonetary compensation) that a president may receive each year is limited to 15% of the president’s annual salary.
Eligibility for bonuses/incentives: A president may receive bonuses, incentives or other compensation (monetary or nonmonetary) only for performance that both (a) exceeds the president’s assigned duties and (b) directly benefits the institution’s students, staff, or faculty.

Clarifies that the Board may delegate administrative and governance authority to committees, presidents or designees, and that any delegation may be rescinded in whole or in part by the Board.

The amendment is inserted into the broader list of Board powers already contained in §15-1626 (e.g., appointment/removal authority, tuition-setting rules), but the substantive change is the compensation limits and conditions for presidents.

Who is affected

Arizona Board of Regents (ABOR) — required to apply the new caps and conditions when determining presidential compensation.

Current and future university presidents at institutions governed by ABOR — their salary and any supplemental pay will be constrained by the caps and the performance/benefit test.

University human resources and finance offices — will implement compensation policies and ensure compliance.

Potential indirect fiscal impacts on university budgets or recruitment/retention strategies for senior leadership.

Potential implications

Places clear statutory limits on top executive pay at state universities, likely constraining total compensation packages and requiring documentation/justification for bonuses tied to demonstrable institutional benefit.

May affect competitive recruiting for presidents if market compensation exceeds statutory caps; could change structuring of contracts and nonmonetary benefits.

Requires ABOR to ensure policies and delegations align with the new statutory language.

If you’d like, I can produce a short checklist for ABOR and affected universities to implement the new requirements (policy edits, contract review points, reporting steps).

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