Esteban to take leave before retiring handsomely
The purpose of the sabbatical leave is to allow the president an opportunity to reconnect with the academic and cultural world on a different level. A CSU Chancellor’s Office spokesperson said the leave would pay $156,500. That salary is the midway point between the president’s current salary of $204,800 and $108,000, the top salary step that can be attained by a tenured full professor in the state university system.
The leave will start next summer, when the president said he and his wife, Gloria, will spend two months in Canada, where they once lived, before moving on to France and Italy, where they will spend several more months. Esteban speaks passable Italian in addition to his expertise in Spanish and French. He holds a Ph.D. in French literature from the University of California at Santa Barbara.
“After that I just don’t know. I don’t have plans [for the remainder of the leave] beyond the travel,” Esteban said.
The president revealed that he has told Chancellor Charles Reed that following retirement he would be willing to work part-time for one year as a consultant for the chancellor. He does not know how much the job would pay.
“Since I don’t know at this point what I would do, I don’t know if I would like or dislike the assignment,” the president added. If things worked out, he could repeat the arrangement the following year.
In any event, the president should be financially comfortable when he goes out to pasture. If his retirement were calculated on just his time in the California State University system, the factors of age, years of service, and single year of highest compensation—noted above as $204,800—would combine to generate a pension of $82,000 per year from the California Public Employees Retirement System. Benefit from the age factor maxes out at 63, and Esteban said he would be 63 next June. Adding his 16 years of service—10 at Chico State plus three each at Cal State Bakersfield and Cal State Humboldt—to the mix yields 40 percent of $204,800 to reach the $82,000 figure.
The executive leave will also count as time in rank to bring Esteban’s pension up to $87,040. He estimates that his 14 years of service at the University of Michigan from 1973 to 1987 will bring him another $6,000 per year at the present historically low interest rate of 3 per cent. If interest rates went up to, say, 7 percent, he said the yearly payout would rise to $15,000. Adding $6,000 to $87,040 equals $93,040.
The president thinks he has about six months’ worth of sick leave that he would be able to convert to time in rank, adding another $2,500, for an increased total of $95,540. (He added that he has not been accumulating vacation days to be cashed out for a lump sum payout on his retirement date.) Finally, he’s required as a CSU executive to pay into Social Security, meaning he would receive another $6,000 per year—a modest ballpark estimate, according to a Social Security official—for a grand total of $101,540. A broad range of fringe benefits accompanies the pension.
If Esteban postponed retirement for full-time teaching, he could add another $5,000 per year to his pension, but he says he doubts he will return to the classroom, at least full time.
Such a return would be legally possible because Esteban holds “retreat rights” in the Foreign Language Department at Chico State that the chancellor granted to him at the time of his appointment to the presidency. Those rights not only appointed him a tenured full professor at the top salary step but gave him the right to enter that department at the end of any semester. He could thus “bump” another tenured faculty member, if no open position existed at the time he chose to exercise his retreat rights.
“You know the saying: ‘You never say never,'” Esteban replied when asked if he had absolutely closed the door on such a return. If he did return to the classroom, even on a part-time basis, the president said he would teach only French and Spanish literature classes, not practicum classes in which students are learning a language.
All this adds up to a pretty good retirement for Esteban in Chico, where he has said he and his wife plan to continue to live.
It’s worth noting that Esteban was able to step aside from the tradition that Chico State presidents live in the president’s mansion. (His predecessor, Robin Wilson, disliked living in the on-campus mansion, calling it “a fish bowl.") Esteban called the mansion rundown, but the conventional wisdom circulating on campus at the time assigned a different reason: He could avoid paying capital-gains tax on the sale of his home at Humboldt State by folding the equity of that home into equally or more expensive Chico digs in which he could build further equity by using his handsome $18,000-per-year state housing allowance.
As sweet as many people would think Esteban’s deal is, he would fare much better if he were retiring as a chancellor—the equivalent of a CSU president—in the University of California system, where he would be earning almost twice as much and would retain his full salary while on transitional leave.