Central Washington University President James Gaudino will earn $500,000 in incentive pay if he stays with the university for five more years, under a contract renewal approved this month by the school's trustees.

The decision has upset faculty, students and staff members at the Ellensburg campus. Public School Employees of Washington, a union that represents support staff working at CWU, has asked Gov. Chris Gregoire to declare the contract infeasible.

But Sid Morrison, chairman of the board of trustees and a former congressman, said Gaudino is doing a stellar job, and trustees are afraid of losing him.

"Jim has proved himself — his record is just phenomenal," Morrison said.

Gaudino, 62, said he was reluctant initially to sign the contract for the incentive, and knew it would cause a stir, but decided it validates his commitment to the university. He makes an annual salary of $290,000 and would not collect the retention incentive until 2016.

Retention incentives are common forms of payment for university presidents, acting as a kind of "golden handcuffs" to persuade them to commit to stay for a certain length of time.

Gaudino's contract puts him on par with the incentive that Washington State University President Elson Floyd will be eligible to receive next year, although Floyd's annual salary is considerably higher.

Gaudino's incentive pay far exceeds the $75,000 incentive that Western Washington University President Bruce Shepard will collect this fall.

Some faculty and staff members say the money seems out of bounds amid relentless cuts to higher education.

"It seemed a little unfair when we look at how students' programs have been cut, and how student tuition has gone up," said Holly Pinkart, vice president of CWU's faculty union and an associate professor in the Biological Sciences Department.

Student tuition rose by 14 percent at CWU this year and will go up 14 percent more next year. The school is losing about $28 million in state funding over the next two years, a cut of about 30 percent, leading to larger class sizes and cuts in some class offerings.

Faculty salaries have been frozen at CWU, and all the state's other higher-education institutions, since 2009.

"We've had a lot of students come through our door who are really concerned" about the incentive pay, said Steven Ross, CWU student-government president. He said students want more input in evaluating Gaudino's job performance, and more communication with the administration in general: "Some students like our president, and some do not."

Angie Wedekind, president of the CWU chapter of Public School Employees of Washington, called the decision "fiscally irresponsible" at a time when a number of staffers at CWU have seen their hours cut. "Nobody should be given a reward in a time of fiscal cuts," she said.

The union has asked Gregoire to declare the contract infeasible. A spokeswoman in the governor's office said the governor has not received the letter.

CWU is prohibited by state policy from offering Gaudino a raise because of Washington's budget shortfall, Morrison said. The trustees were worried he would be lured away by another school and wanted to make it worth his while to stay.

Morrison called the retention incentive a bargain compared with the cost of searching for a new president.

"It sounds like a lot of money — and it is — but if we had the opportunity to keep him through pay raises, we'd be paying that money anyway," he said.

Pinkart said even a small part of the money for Gaudino's retention could be used to help programs on the chopping block — for example, to help save the school's Early Childhood Learning Center, which is threatened with steep cuts or closure.

"He's a good guy, he's well-intentioned, but when an offer like this is made, what is worth this amount of money?" Pinkart asked. "People here would have a hard time pointing to what's happened during his time that's exceptional."

Morrison said Gaudino has done an excellent job of managing the university through the economic downturn, setting up faculty task forces to help trim costs and eliminating programs that make the school run more efficiently. As a result, the cost of educating a student per year, in inflation-adjusted dollars, is less than it was in 1991, Morrison said.

Gaudino said he didn't ask for the money but that he knew the trustees were discussing an incentive of that size to persuade him to stay. At first he had "some reluctance" to sign the contract. "I knew there would be some folks that thought it was inappropriate," he said, "or question the timing."

Gaudino took the CWU job in January 2009, leaving Kent State University in Ohio, where he was founding dean of the College of Communication and Information. He had been working at CWU under a three-year rolling contract, which was renewed each year and did not have a retention incentive.

He said he discussed the contract with his wife, and the commitment they would have to make for him to keep working beyond age 65.

"I thought, honestly, given the current situation — how difficult it is to lead a university in Washington — are we willing to commit to this place?" he said. They decided the answer was yes.

Katherine Long: 206-464-2219

or klong@seattletimes.com