Supplemental Pay Plan

Faculty grant supplemental pay plan *


The primary objectives of the Faculty Grant Salary Supplemental Pay Plan are:

  • To assist in the implementation of strategic University goals to expand research productivity;
  • To encourage and reward entrepreneurship resulting in increased external funding for research and other types of grant-funded University projects;
  • To help meet the University mission by enhancing its capacity to attract and retain high quality faculty whose contributions in teaching, research, and service will continue to elevate the stature of the institution;
  • To expand the University’s public affairs efforts, and stimulate the economic development of region, state, and nation through greater engagement in outreach and focused efforts addressing societal problems. 

Source of funds

This policy provides an opportunity for faculty to receive supplemental compensation as the result of their success in generating external grant funding.  The primary source of funding for this supplemental pay plan will be the “residual” salary pool that results from instances where a tenured/tenure track faculty member has been funded by an external grant or contract (hereafter referred to as grants) that “buys out” some percentage of their time, base salary, and fringe. This  applies to the principal investigator (PI) or any co-principal investigators (CoPIs) who have a component of their MSU contractual salary replaced by grant funding. It does not include those employed by the grant that were not authors of the project.  When a grant with salary buy-out is funded,  the salary and fringe benefits “recovered” (salary savings) from the base salary after replacement costs are covered will be dedicated to supplemental pay opportunities that reward entrepreneurship thereby furthering grant activity of the University. 

Although salary savings from grants will form the primary source of this supplemental compensation plan, the central administration, colleges and departments may provide additional funds to supplemental pay that enhances grant productivity.

Supplemental pay principles

The first obligation of salary and fringe benefits recovered from faculty time bought out by the grant will be used to cover the costs of replacing the faculty member in his/her regular responsibilities.

  • Supplemental pay received under this policy does not change the base salary, whether a 9-month or 12-month base pay, of the faculty member.
  • In no case will supplemental pay under this plan be computed as a cost to an external grant, or as a base-salary change that would result in a future cost to an external sponsor.
  • The supplemental pay received by a faculty member under the plan does not change their 100% time and effort commitments and reporting requirements as outlined under federal cost accounting principles (OMB Circular A-21).
  • Supplement pay received under this policy will not directly affect policies or eligibility criteria concerning overload, interim, or summer pay of faculty who may desire participation in these opportunities.
  • Supplemental pay received in one year will not affect eligibility for similar payments in future years.

Supplement pay pools

Residual salary savings generated through this policy, as well as any augmentation provided by other sources, will accumulate to a central pool.  On an annual basis, this central pool will be distributed to three award programs.   Funds will be distributed to awardees, colleges, and departments during the first quarter of the fiscal year based on funds available in the pool from the preceding year.  Colleges and departments that did not generate salary savings from grants during the previous year will not be participants in the respective pools designated below.

Provost supplemental pay awards

  • Receives 50% of the residual salary savings generated in the previous fiscal year.
  • Eligibility for these awards requires that during the previous year the faculty member (PI or Co-PI) received grant funding that bought out a portion of their time, i.e., they contributed to the salary savings pool.
  • Supplemental pay award levels will be distributed based on funds generated by a faculty member and funds available in the pool.  Individual awards will be from $1,000 to a maximum of $9,000.  The award levels will be $1,000, $2,000, $3,000, $6,000 or $9,000.  These amounts include fringe benefits associated with payment of the supplemental award.

College supplemental pay awards

  • Receives 25% of the residual salary savings generated by faculty within a college during the previous fiscal year.
  • Funds will be used as a stimulus for faculty to write and submit grant proposals.
  • Eligibility criteria and procedures used to distribute these awards will be developed by each college receiving funds under this program.

Departmental supplemental pay awards

  • Receives 25% of the residual salary savings generated by faculty within a department during the previous fiscal year.
  • Funds will be used to award personnel for their extraordinary efforts contributing to the success of grant activity in the department even though they had not been named in the grant as the PI or CoPI and thus are not eligible for the Provost-level Supplemental Pay Awards.
  • Eligibility criteria and procedures used to distribute these funds will be developed by each department participating in the grant incentive program.

* [Policy approved - Provost - January 1, 2007;  Policy Amended/Revised - September 2008]