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Outside Professional Activities FAQs

These Frequently Asked Questions (FAQs) address issues related to outside professional activities, help clarify what roles a salaried UCSF faculty member may pursue and what requirements must be fulfilled when doing so. The FAQs are provided to supplement the more detailed descriptions of roles and responsibilities described in the Health Sciences Compensation Plan (HSCP), Academic Personnel Manual (APM) and the University of California Patent Policy.

The University recognizes the value of having faculty members participate in outside professional activities. The Health Sciences Compensation Plan (HSCP) and Academic Personnel Manual (APM) describe the types of activities a faculty member can perform outside of the scope of University work. Anyone who is a member of the HSCP, regardless of the percent of full-time appointment, is covered by these policies and subject to the reporting requirements. Each faculty member must be aware of and comply with the requirement that University duties, including clinical care, research, and teaching take precedence over any outside work.

Health Sciences Compensation Plan defines outside professional activity (OPA) as work personally provided by a faculty member that is beyond the scope of activities that are part of University employment. The work allows outside organizations to take advantage of the expertise of our faculty members in activities not directly related to their University effort.

Regent’s Standing Order 103.1(b) states that faculty members shall not allow outside employment to interfere with primary University duties. APM 671-4 b states that a conflict of commitment occurs when a faculty member’s outside professional activities, whether compensated or uncompensated, interfere with the faculty member’s professional obligations to the University of California. APM-020-1 states that members of the faculty may render professional or scholarly services for compensation, unless they are prohibited by the terms of their appointment from accepting such compensation, but in no case may such employment be solicited or interfere with regular University duties.

 

Frequently Asked Questions (General)

  1. How do I know if I am eligible to participate in outside professional activities (OPA)?
  2. Who is a member of the Health Sciences Compensation Plan?
  3. What types of activities are defined as outside professional activities?
  4. How much time may I devote to outside professional activities?
  5. What should I do if I anticipate that I will exceed the time or earnings threshold defined in the departmental compensation plan?
  6. What are the criteria to be in Good Standing?
  7. What could cause the loss of Good Standing?
  8. How is the income from outside professional activities managed?
  9. What are the categories of outside professional activity?
  10. How are outside professional activities categorized?
  11. What outside professional activities are subject to the time and earnings threshold limits defined in my department’s Compensation plan?
  12. Am I free to engage in Category I and Category II activity on my own time (e.g. , on the weekend)?
  13. What income can I retain that is not subject to the HSCP earnings threshold or time limits for outside professional activities?
  14. Are any outside professional activities exempt from the time and the earnings thresholds?
  15. When do I need advance approval to engage in outside professional activities?
  16. Can an exception be made to allow me to retain income beyond my annual outside professional activities earnings threshold?
  17. What happens to outside income that I am required to deposit into an HSCP account?
  18. How do I account for time devoted to and income earned from Category I and Category II activities?
  19. Are there any other rules that apply to consulting for industry?
  20. I work at and am paid by an affiliate institution. Is this activity considered an outside professional activity that must be reported? Does my time spent and income earned there count toward my time and earnings thresholds?
  21. May I engage in outside professional activities for another hospital or clinic not affiliated with the University?
  22. I am a physician and my professional activities at UCSF are limited to my clinical specialty. May I moonlight and retain income for clinical activities distinct from those I practice at UCSF?
  23. What if I am not sure if my outside professional activity is allowed under the HSCP?
  24. Am I covered by University insurance when I provide outside professional services?
  25. I accepted an invitation to provide a Category I or Category II service in my area of professional expertise to a company and they wish to pay me by check for services rendered. Who should the check be made payable to?

 

Frequently Asked Questions Related to Managing Time and Income Related to Outside Consulting Activities

  1. A firm asked me to consult for them monthly and in return for my consultation, they will provide an honorarium. As it is honoraria given by an agency outside the University (as defined in Other Activities Income above), are these honoraria excluded from my annual outside professional activities earnings threshold?
  2. I am occasionally asked by a for-profit entity (e.g. , pharmaceutical company, medical appliance manufacturer, etc. ) to speak. They offer an honorarium. As it is honoraria given by an agency outside the University (as defined in Other Activities Income above), may I retain this income and consider it exempt from my annual outside professional activities earnings threshold?
  3. A firm for which I have consulted wishes to pay me in stock, stock options or non-cash compensation instead of cash. What should I do with non-cash compensation or security received as payment for services rendered?
  4. Where do I report stock/stock option compensation?
  5. The firm that I consulted for wishes to defer payment of consulting fees. Is this permitted under the Compensation Plan?
  6. May I request that payments for my consulting services be made payable to the University?
  7. I wish to purchase stock in a company for which I have consulted. Does the Plan limit such investments?
  8. I wish to found a company that will pursue research in my area of expertise. What are my obligations under the HSCP related to my role as a founder of a company? Does the HSCP limit what roles I can have with the company?
  9. What are my ongoing reporting obligations as a founder, or even co-founder of such a company?
  10. Am I obligated to periodically renew, by prior approval, my continuing role as a founder or co-founder of a company?
  11. If I receive no compensation for my efforts in an executive or managerial position, am I still obligated to pursue prior approval for my activities with the company?
  12. If I were to continue my relationship with the company as a member of the board of directors, would I be obliged to seek prior approval?
  13. What are my obligations if I were to enter into a consulting arrangement with the company?
  14. I founded (or co-founded) a company prior to the implementation, in July 2015, of APM 671, which has determined that assuming a founding/co-founding role of a company to be a Category I activity. Am I now obliged to seek retroactive approval as founder (or co-founder)?

 

Frequently Asked Questions (General)

 

1. How do I know if I am eligible to participate in Outside Professional Activities (OPA)?

OPA can be pursued by faculty who are members of the Health Sciences Compensation Plan under certain circumstances. They must:

  • be in good standing
  • fulfill all expectations as a salaried faculty member
  • have the approval of their Department Chair to participate in the specific outside professional activity (OPA)

Faculty who are not members of the HSCP, can pursue OPA as long as the activity does not interfere with their roles and responsibilities as a faculty member. Specific requirements can be discussed with the department chair and/or manager.

 

2. Who is a member of the Health Sciences Compensation Plan?

University Policy requires that members of the faculty of the School of Medicine be members of the HSCP if they hold a University funded appointment at greater than 50% of full-time at all ranks in any of the following series: Ladder Rank, In-Residence, Clinical X, Adjunct, HS Clinical or Visiting. Faculty with joint affiliate appointments (e.g. , VAMC, Gladstone, etc. ) may also be members of the HSCP, even if their UCSF appointment is 50% or less time. If you are not sure whether you are a member of the HSCP, please contact your department manager or the academic personnel analyst for your department for clarification.

 

3. What types of activities are defined as outside professional activities?

Outside professional activities are defined in APM 671-4 as: “Those activities that are within a faculty member’s area of professional, academic expertise and that advance or communicate that expertise through interaction with industry, the community or the public. ” Outside additional teaching, as described in APM - 671-10-a-(2)-(a), is included in this definition.  Outside non-professional activities are defined as “activities that are part of the faculty member’s private life and are not expressly governed by University regulations or by the guidelines on outside professional activities. ”

 

4. How much time may I devote to outside professional activities?

If you are in “good standing,” APM 671 states that Plan participants may devote from 21 to 48 days annually to compensated and uncompensated outside professional activities. Please refer to your department’s Compensation Plan to see your specific time limit on the number of days that may be devoted to outside professional activity.

 

5. What should I do if I anticipate that I will exceed the time or earnings threshold defined in the departmental compensation plan?

If you anticipate that participation in an outside professional activity will cause you to exceed the threshold specified in your department’s compensation plan, you must request written approval from your Chair before proceeding with each engagement. Use the Form to Request to Exceed Threshold to make the request.

 

6. What are the criteria to be in Good Standing?

Plan Participants are presumed to be in Good Standing unless they have been found to have misconduct or other activities described below.

  • Plan Participants must meet department or ORU guidelines regarding productivity in research, teaching, patient care, mentoring, and University service, as defined by their series, rank and step.
  • Plan Participants are responsible for actively participating in activities that support the department/unit’s objectives.
  • Plan Participants are expected to demonstrate professional behaviors in all areas of work and share responsibility for the overall success and well-being, including financial well-being, of the department.

 

7. What could cause the loss of Good Standing?

Loss of Good Standing may occur in the following instances:

  • Finding of faculty misconduct
  • Finding of research misconduct
  • Finding of unsatisfactory performance in a Five-Year review
  • Refusal or failure to participate in assigned duties
  • Loss of clinical privileges (as required)
  • Loss of licensure and/or credentials (as required)
  • Refusal or failure to complete required trainings
  • Lack of compliance with University policy and/or reporting requirements
  • Failure to meet expectations related to the generation of salary support and/or shared expenses
  • Participation in clinical or patient care activities performed outside of the University without an approved Professional Services Agreement or affiliation agreement.

 

8. How is the income from outside professional activities managed?

The HSCP allows you to retain income earned from certain outside professional activities up to a maximum amount of $40,000 or 40% of your fiscal year base (scale 0), whichever is greater, based on your rank and step. Income includes not on cash compensation, but also compensation in the form of stock (as the value of the shares at the time they are offered) or stock options valued as the difference between the market value and purchase price. In general, these thresholds apply to all faculty members and are not pro-rated based on percent effort. Please verify with the appropriate department manager. The amount of outside income you are allowed to retain must be taken as personal income to avoid IRS rules related to “constructive receipt” – meaning that if you are allowed to retain outside income, you must not have the funds paid to the University to avoid personal income tax on the compensation.

If your income from outside professional activities exceeds the earnings threshold, you must obtain prior approval for the outside work and additional compensation for these activities from your department chair. The Chair shall submit a written request to the Dean or his/her designee. The request to exceed the earnings threshold must include relevant details about the proposed activity, including the nature of the services to be provided, the person or entity who will pay for the services*, the anticipated period of service and/or hours to be devoted to the activity, the total expected earnings from the activity, and the amount by which the Plan Participant’s total annual earnings from outside activities are expected to exceed the earnings threshold. The funds earned in excess of the threshold must be deposited to the Plan.

Although there is an income threshold under the HSCP, some income earned from OPA may be retained by you and does not count toward the earnings approval threshold of $40,000 or 40% of your fiscal year base salary. Please refer to your department’s compensation plan for a list of outside professional activities for which you are allowed to retain compensation independent of the departmental threshold.

*When required to ensure patient confidentiality, the person or entity to be reported as recipient/payer for professional witness activities is the attorney or the law firm requesting the services.

 

9. What are the categories of outside professional activity?

  • Category I - activities related to training and expertise but are performed for a third party or that require a significant professional commitment.
  • Category II - professional activities that are outside the course and scope of your University employment.
  • Category III - activities considered within the course and scope of University employment and do not present issues of conflict of commitment.

 

10. How are outside professional activities categorized?

Professional activities are separated into three categories. Categories I and II include activities that must be reported and, in the case of Category I, must receive prior approval before the faculty member engages in the activity. Category III activities are those that are within the course and scope of University employment and need not be approved nor reported. When an activity falls into more than one category, it should be assigned to the category that requires more stringent reporting and prior approval, as applicable.

 

11. What outside professional activities are subject to the time and earnings threshold limits defined in my department’s Compensation plan?

APM 671 differentiates outside professional activities into three distinct categories, defined by the level of conflict of commitment that each activity may create. Time spent in and income earned from Category I and Category II activities are subject to the time and dollar limits specified in your department’s compensation plan.

CATEGORY I activities are outside professional activities that are most likely to raise conflicts of commitment because: 1) they are activities related to the training and expertise which are the same as your qualifications for University appointment, but performed for a third party and/or 2) they require a significant professional commitment.

Category I activities are not allowed without prior approval by the Chancellor, including, but not limited to, assuming an executive or managerial position in a for-profit or not-for-profit business; teaching, research or administration of a grant outside the University (normally not allowed if the University would ordinarily administer the grant); establishing a relationship as a salaried employee outside the University; assuming a founding/co-founding role of a company and engaging in other compensated or uncompensated outside professional activities which common sense and good judgment would indicate are likely to raise issues of conflict of commitment.   Some other activities, such as serving on a scientific advisory board or providing consultation to a company, are allowed as long as the conflicts of interest are disclosed and managed. In such cases, the Conflicts of Interest Advisory Committee should be notified of the activity and should provide guidance regarding how to manage and disclose the conflict. These type of relationships also could impact your ability to simultaneously do research on behalf of the company with which you have a management or financial relationship.

Category I activities count toward the time limit on outside professional activities defined in the department’s compensation plan and the income earned counts toward your earnings approval threshold. Category I activities, whether compensated or not, must be reported to the University.

CATEGORY II activities are typically shorter term professional activities that are outside the course and scope of your University employment.

Category II activities are less likely to raise issues of conflict of commitment. Category II activities include the following examples:

    • Providing expert testimony in administrative, legislative or judicial proceedings;
    • Providing consulting services for government agencies and for for-profit and non-profit entities
    • Serving as a member of the board of directors of an outside entity
    • Consulting under the auspices of the University of California
    • Additional University-compensated teaching, including teaching for UNEX courses and programs, other continuing health education programs administered by the University, and self-supporting UC degree programs outside the Plan member’s teaching load; and providing workshops for industry.

Category II activities count toward the time limit determined by your department’s compensation plan and the income earned counts toward your earnings approval threshold. Category II activities, whether compensated or not, must be reported. In some cases, disclosure to the Conflict of Interest Advisory Committee is required to define the level of conflict and how best to manage it.

 

12. Am I free to engage in Category I and Category II activity on my own time (e.g. , on the weekend)?

Yes, you may participate in outside activity on your own time, but the time spent and the income earned count toward the time limit set by your department’s compensation plan and your earnings approval threshold set by the Plan. The same requirements apply to accounting for these activities in the evening, weekends, or while on approved leaves with pay, such as sabbatical and vacation. Participation in activity that falls under Category I would require exceptional preapproval from the department, Dean’s Office, and Chancellor’s office. Contact SOM Academic Affairs for details.

 

13. What income can I retain that is not subject to the HSCP earnings threshold or time limits for outside professional activities?

Income from OTHER ACTIVITIES listed below may be retained by you and does not count toward your earnings threshold. The time, related to these activities, does not count toward your time limit as determined by your department’s compensation plan. Participation in these activities is not subject to the Plan’s reporting requirement.

Other Approved Activities:

  • Prizes, defined as gifts in recognition of personal achievements and not for services rendered.
  • Royalties, defined as shares or proceeds for contributions as authors or inventors, as allowed under the University’s copyright and patent policies. Please note that industry-supported payments for authorship, whether or not as part of a consulting agreement with a company or similar agency, are not considered to be royalties; retention/non-retention of such payments is subject to the time and/or earnings threshold for outside professional activities.
  • Honoraria, defined as payments by academic or scientific agencies outside the University for occasional lectures and similar public appearances beyond normal academic responsibilities to the University of California, and are not in return for other services, whether given directly or indirectly. Please note the following exception:  Industry-supported payments for lectures and/or presentations, whether or not as part of a consulting agreement with a company or similar agency, are not considered to be honoraria; retention/non-retention of such payment is subject to the time and/or earnings threshold for outside professional activities. In addition, faculty members cannot participate on speakers’ bureaus or provide educational sessions of any kind in which a company prepares the materials and uses it for marketing purposes internally or to potential users of their products.
  • University honoraria, defined as payments for occasional lectures or similar services performed on a University of California campus as permitted by Academic Personnel Policy (i.e., APM 666), and applicable UCSF policies.
  • Administrative stipends, defined as payments by the University for responsibilities related to University administration beyond normal academic responsibilities (APM 633).
  • Income from a profession or activity unrelated to training and experience that is your qualification for University appointment, as determined by your Department Chair in consultation with the Vice Dean for Academic Affairs.

 

14. Are any outside professional activities exempt from the time and the earnings thresholds?

Yes.

CATEGORY III activities are allowed under the Plan. These activities are considered within the course and scope of University employment and do not present issues of conflict of commitment. According to APM 671, the following are examples of Category III activities:

    • Serving on a federal, state or local government agency committee, panel or committees
    • Acting in an editorial capacity for a professional journal; reviewing journal manuscripts or grant contract proposals; attending and presenting talks at scholarly colloquia and conferences
    • Serving as a committee member, an officer or board member of a professional or scholarly society.

Category III activities do not count toward the time limit determined by your department’s compensation plan, and the income earned may be retained by you and does not count toward your earnings threshold. Category III activities are not subject to the Plan’s reporting requirements.

 

15. When do I need advance approval to engage in outside professional activities?

  1. Advanced approval is required for all Category I activities. Under APM 671, Category I activities require advance written approval from the Chancellor or designee because they are most likely to raise conflicts of commitment. Requests for approval of such activities are to be directed first to your Chair, followed by the SOM Vice Dean for Academic Affairs, then the Vice Provost for Academic Affairs before submission to the Chancellor. Contact your department administrator or SOM Academic Affairs for details on requesting an exception.
  2. Advance approval is also required anytime the faculty member anticipates the time or earnings threshold will be exceeded. If you wish to engage in any Category I or Category II activity that might reasonably be expected to cause you to exceed the time limit or earnings threshold as decribed by your department’s compensation plan, you must request prior written approval for each engagement from your Chair before proceeding. All income earned from these engagements is owed the Plan. The exception request form can be found here.

 

16. Can an exception be made to allow me to retain income beyond my annual outside professional activities earnings threshold?

All earnings must be managed consistent with the terms of the Health Sciences Compensation Plan. In general, the retained earnings threshold cannot be exceeded without prior approval. If a Plan member is granted that approval, all earnings that exceed the threshold are owed the Plan. The faculty member may receive some portion of the outside income as incentive compensation.

In rare circumstances, with appropriate justification, a request can be made to retain additional outside income by requesting approval through Office of Academic Affairs. The request will require final approval by the Chancellor. In the event that you participate in an activity for which you anticipate exceeding the earnings threshold and request approval to retain additional income, you must request an exception to the earnings threshold prior to exceeding it. The request must be approved by the Chancellor or his/her designee.

 

17. What happens to outside income that I am required to deposit into an HSCP account?

Funds deposited into the compensation plan account are under the control of the chair. An individual faculty member can make a request to the chair for how the funds are distributed. In general, the faculty member can make a request to the Chair to allow some portion of the funds to be used to support academic activities (academic enrichment fund) or to request that some portion of the funds be paid to you as incentive (Z) compensation. A faculty member cannot personally determine how funds are allocated under IRS rules (“constructive receipt” limitations). The request must be made prospectively at the beginning of each academic year. At that time, you can request that outside income deposited into your department’s HSCP account be allocated in one of the following ways, depending on the options defined in the department’s compensation plan:

OPTION A:          Z Payment

Income is paid as a Z payment minus applicable assessments (dean’s and department’s tax) as published in your department’s compensation plan.

OPTION B:           Academic Enrichment Account

Income minus applicable assessments can be allocated to an Academic Enrichment Account to be used to support University-approved academic professional activities in support of your academic work. This income is never eligible to be taken as a “Z” payment or as salary by the Plan Participant. Unexpended balances remain the property of the University when the Plan Participant retires or separates from University employment.

OPTION C:           Designated Academic Enrichment Account and Z Payment

A defined portion (flat dollar amount or percentage) of the income is allocated to an Academic Enrichment Account and the remainder is paid to you as a Z payment. Please refer to your department compensation plan for additional information.

Once your option has been approved by your Chair, changes are not permitted under any circumstances until the following year.

 

18. How do I account for time devoted to and income earned from Category I and Category II activities?

You are responsible for maintaining a running total of your time and earnings related to Category I and Category II activities during each academic year. At the end of each academic year, you are required to provide an annual report to your department Chair, accounting for time and earnings from outside professional activities for that year. You are obligated to submit an annual attestation even if you do not engage in outside professional activities during the reporting period.

 

19. Are there any other rules that apply to consulting for industry?

Faculty members are allowed to provide consultations to industry. Since outside consulting is allowed under the compensation plan, the agreements between an outside company and the faculty member are personal agreements for which the University is not a party. All outside consulting relationships have some limitations and could create conflicts of interest, particularly if you have or anticipate having other relationships with the company for which you are consulting. For example, there are limitations on any role you might have in research activities funded by an outside company if you are also consulting or receiving any compensation from the company. If you are a consultant to an outside company, there are also restrictions to what role you can have in research activities supported by the company. You should also report the relationship to the Conflict of Interest Advisory Committee (COIAC) that can assist you in managing any conflicts that arise. In addition, under the UCSF Industry Relations Policy, you are not allowed to participate in speakers’ bureaus or provide educational or marketing lectures for which the company is controlling the content. See the UCSF Industry Relations Policy.

 

20. I work at and am paid by an affiliate institution. Is this activity considered an outside professional activity that must be reported? Does my time spent and income earned there count toward my time and earnings thresholds?

No. If you are a salaried employee of an institution that has a formal affiliation agreement with the University of California, your employment with that institution is not considered an outside professional activity.   Examples of organizations with which UCSF has formal affiliation relationships include Zuckerberg San Francisco General Hospital and Trauma Center (ZSFG), SF VAMC, Benioff Children’s Hospital Oakland, and Gladstone Institute. Your work performed within these organizations does not count toward your time and earnings thresholds. All other work performed outside of UCSF or an affiliate must be reported as defined above.

 

21. May I engage in outside professional activities for another hospital or clinic not affiliated with the University?

No. Patient care (clinical) activities must be provided within the University setting or at an institution that has a formal affiliation agreement with the University. Such activities performed for another hospital or clinic not affiliated with the University may occur only under a professional services agreement (PSA) between The Regents and the outside hospital or clinic. If you require more information about the process for requesting a PSA, please contact your respective department manager.

 

22. I am a physician and my professional activities at UCSF are limited to my clinical specialty. May I moonlight and retain income for clinical activities distinct from those I practice at UCSF?

No. Moonlighting is prohibited by University policy for all faculty members of the HSCP. Plan participants can perform clinical work at another institution only when it is done under a formal PSA between the University and the outside institution. All income from patient care or any other type of clinical activities is owed the University and cannot be retained by the faculty member. In most cases, any income generated under a PSA will be paid directly to the University so no transfer of funds is required by the faculty member.

 

23. What if I am not sure if my outside professional activity is allowed under the HSCP?

If the type of activity is not referenced in Category I, II or III, listed above, you should check with your Chair, who will make that determination in consultation with the Vice Dean for Academic Affairs.

 

24. Am I covered by University insurance when I provide outside professional services?

All clinical activity performed within the course and scope of University activity is covered by the UC Professional Liability Program. If the work is done at an outside organization under a PSA with The Regents, the work is considered within course and scope and is covered. No other outside professional services are covered by University insurance programs. University insurance coverage is set out in BUS-81.

The University’s general and professional liability and workers’ compensation coverage does not extend to activities that are outside of the course and scope of your University employment. If you engage in activities that are not covered by an appropriate consulting agreement, training affiliation or professional services agreement, coverage does not extend and The Regents will not indemnify and defend you in any action brought against you subject to these outside activities. If you engage in professional activities that are outside the course and scope of your University employment, you are encouraged to obtain outside legal consultation, as needed, and consider, if advised, obtaining personal liability insurance.

 

25. I accepted an invitation to provide a Category I or Category II service in my area of professional expertise to a company and they wish to pay me by check for services rendered. Who should the check be made payable to?

The company should pay you directly. The company should not pay the University because it is not a contracting party to the agreement. If the check is paid to the University for outside professional activities performed under the terms of the HSCP, you may be at risk with the IRS for violating “constructive receipt” requirements and incur penalties.

 

Frequently Asked Questions Related to Managing Time and Income Related to Outside Consulting Activities

 

1. A firm asked me to consult for them monthly and in return for my consultation, they will provide an honorarium. As it is honoraria given by an agency outside the University (as defined in Other Activities Income above), are these honoraria excluded from my annual outside professional activities earnings threshold?

No, the University does not consider these payments honoraria. Since consulting is a professional service identified as a Category II activity under Plan policy, income from consulting counts toward your earnings threshold. Such income earned above the approval threshold is owed the Plan. The Plan defines honoraria as “payments… for occasional lectures… which are not in return for other services…” The fact that such services are to be rendered on a regular basis precludes their exclusion as “honoraria. ” Simply calling consulting payments “honoraria” does not exclude them from counting towards your outside professional earnings threshold.

 

2. I am occasionally asked by a for-profit entity (e.g. , pharmaceutical company, medical appliance manufacturer, etc. ) to speak. They offer an honorarium. As it is honoraria given by an agency outside the University (as defined in Other Activities Income above), may I retain this income and consider it exempt from my annual outside professional activities earnings threshold?

These payments are not honoraria. They represent payment for a Category II service to for-profit entity and may be retained, but do count toward your earnings threshold. Such income earned above the earnings threshold is owed the Plan. Occasional lectures or presentations to academic institutions or societies are legitimately claimed as honoraria and exempt from your earnings threshold; lectures or presentations to for-profit entities are not. Please note that the UCSF Industry Relations Policy prohibits participation in speakers’ bureaus and delivery of educational or marketing lectures for which the company is controlling the content.

 

3. A firm for which I have consulted wishes to pay me in stock, stock options or non-cash compensation instead of cash. What should I do with non-cash compensation or security received as payment for services rendered?

You are required to disclose all non-cash compensation (stock and/or options) received in exchange for professional services within 30 days of receipt. For more information, see the School of Medicine's policy on the Reporting of Stock Options or contact the Dean's Office.

STOCK received in lieu of compensation for Category I and Category II outside professional activities must be disclosed to the Department Chair and to the Dean’s Office within 30 days of the date of receipt. The stock will be valued at the time of disclosure. If the stock is given to you at no cost, the stock may be retained by you but the dollar amount equal to the stocks full market value on the date of receipt will count toward your earnings threshold. An amount equal to the stock’s full market value on the date of receipt is owed the Plan if you have exceeded your earnings threshold. If the purchase price is equal to the market value on the date of receipt, no amount is counted toward your earnings threshold. And, if earned above your approval threshold, no money is owed the Plan. If the purchase price is below market value price on the date of receipt, the difference between the purchase price and the value of the stock on the date of receipt counts toward your earnings threshold. Dollars equal to the difference is owed the Plan, if earned above your approval threshold. Following a determination of the value of the stock, you will be notified of the nature of any Plan obligations, based on the above methodology. Should you neglect to disclose the stock at the time of receipt, the difference between the purchase price or value of the stock at the time of receipt and the value of the stock at the time of disclosure will be applied to your earnings threshold. If the disclosure occurs after you have reached your approval threshold, the dollar difference will be owed the Plan. Disclosure at the time of receipt is required regardless of the stock’s potential valuation, and regardless of whether you believe that any dollars are due the Plan.

STOCK OPTIONS received in lieu of compensation for outside professional activities must also be disclosed to the Department Chair and the Dean’s Office within 30 days of the date the stock option agreement is signed. The Dean’s Office will obtain a valuation of the stock as of the date of the agreement. If the offer price is equal to or greater than the stock’s valuation/market price on the date the agreement is signed, no amount is counted toward your earnings threshold. And, if earned above your approval threshold, no money is owed the Plan. If the option price is below the stock’s valuation/market price on the date the agreement is signed, the difference between the option price and the value of the stock is counted toward your earnings threshold. And, if earned above your approval threshold, the difference in dollars is owed the Plan. Following a determination of the value of the stock, you will be notified of the nature of any Plan obligations, based on the above methodology. Should you neglect to disclose this information within 30 days of signing such stock option agreements, the difference between the offered option price at the time the agreement was signed and the value of the stock at the time it is disclosed will be applied to your earnings threshold. And, if earned above the threshold, the difference in dollars is owed the Plan. Disclosure of stock options is required regardless of 1) the stock’s potential valuation, 2) whether you intend to exercise the options, and 3) whether you believe that any dollars are due the Plan.

FOUNDERS’ STOCK received in lieu of compensation for outside professional activities must also be disclosed to the Department Chair and to the Dean’s Office within 30 days of the time of receipt. It will be valued at the time of receipt and any value will be applied to your earnings threshold. And, if earned above your approval threshold, dollars equal to the stock’s value is owed the Plan. Since the value of founders’ stock is generally insignificant, in most cases, a negligible amount would be applied to your earnings threshold or, if earned above the threshold, owed the Plan. However, if the founders’ stock is not disclosed upon receipt, the value of the stock at the time of disclosure will be applied to your earnings threshold or, if earned above the threshold, equivalent dollars will be due the Plan.

 

4. Where do I report stock/stock option compensation?

Faculty who receive stock or stock options in lieu of compensation for outside professional activities must disclose that compensation to the Dean’s Office. The disclosure must be made within 30 days of receipt and/or signing of grant offer notification, independent of vesting dates. For more information on what documentation to submit with your disclosure, see the School of Medicine’s Policy on Reporting of Stock Options. Email disclosures and required documentation to the Dean's Office.

 

5. The firm that I consulted for wishes to defer payment of consulting fees. Is this permitted under the Compensation Plan?

HSCP policy requires that income earned from Category I and Category II activities in excess of your earnings threshold, and owed to the HSCP, must be deposited to the Plan at the time that the services are rendered and payment is made. Deferred income generated by Category I and Category II activities still counts toward your earnings approval threshold.

Whenever possible, income associated with outside work should be reported in the same year as the work was completed. Since some activities span over more than one year, the reporting of time and income may not occur in the same year. In these situations in which income is delayed or deferred, time must be reported in the year the work was performed. Deferred income is reported in the year it is received. In some cases, the reporting of deferred income to a future time may result in income for that year exceeding the income threshold. If deferred income results in exceeding the threshold, appropriate prior approval should be requested.

Deferral of payments to a time past employment with the University (e.g. , post retirement) is not permitted.

Since deferred income could create some risk with respect to IRS reporting of income, if you are offered deferred compensation for outside activities, you are advised to consult with your tax advisor.

 

6. May I request that payments for my consulting services be made payable to the University?

No. All payments for consulting services personally provided by a faculty member to an outside entity should be made payable directly to the faculty member. The University is not a party to personal consulting agreement and should not receive payments on behalf of a faculty member. Doing so may put the faculty member at risk with the IRS for violating “constructive receipt” requirements and possibly cause him/her to incur penalties.

 

7. I wish to purchase stock in a company for which I have consulted. Does the Plan limit such investments?

No. You are able to make personal investments in companies for which you are consulting.   Your money is your own to do with as you please.  If you purchase stock at its current market value, you have no obligation to the HSCP. If you are given the opportunity to purchase stock below market value, you must account for the difference between your purchase price and the current market price according to the terms of the compensation plan. The difference between the current market value and your purchase price represents compensation to you. As a result, you may be required to pay the University an amount equal to the difference between your purchase price and the current market value of the stock. A delay in reporting the value of the stock could incur you considerable financial obligation if the stock price increases before fulfilling your reporting obligation.

In addition, whenever you own equity in a company with which you are consulting or performing research activities, you should be aware of Conflict of Interest regulations that govern the reporting of such holdings.

 

8. I wish to found a company that will pursue research in my area of expertise. What are my obligations under the HSCP related to my role as a founder of a company? Does the HSCP limit what rolds I can have with the company?

While each situation may have different requirements, some general principles must be met as a founder of a company. There are three fundamental issues to consider:

  • Reporting obligations under the HSCP;
  • The management of intellectual property related to inventions that were developed using University resources (including laboratory space, staff, etc.); and
  • The management of investments and income associated with your role in the company.

First, if you are going to found a company, you must receive PRIOR approval from the Cancellor to serve in a founding role. To do so, complete and submit the preapproval request form to the Vice Dean for Academic Affairs.

Second, all intellectual property must be managed according to University rules. Before founding a company based on intellectual property created during employment at UCSF, you are required to discuss the specific situation and how to manage the intellectual property issues with the Office of Technology Management Administration. The OTM staff will assist you in determining how to manage the intellectual property, licensing and other issues to ensure that you do not compromise your responsibilities related to UC Patent Policy or relinquish intellectual property for which you and the University may have rights.

Third, there are restrictions to the role(s) you can play as a founder of a company. As a founder of a company, you can serve on a scientific advisory board. However, you cannot serve in any executive and/or managerial role in the company unless you receive prior approval by the Chancellor. In general, approval is provided under specific circumstances, often related to the needs of a start-up organization before a management team has been recruited to assume overall responsibility for day-to-day operations.

 

 

9. What are my ongoing reporting obligations as a founder, or even co-founder of such a company?

The initial establishment of a company, which under most circumstances requires a “significant professional commitment,” is considered a Category I activity and requires prior approval.

 

10. Am I obligated to periodically renew, by prior approval, my continuing role as a founder or co-founder of a company?

No, once the company has been established, no further prior approval is required for your role as founder/co-founder of the company. However, if subsequent to the establishment of the company, you continue your association with the company in either an executive or managerial position, or as an employee of the company, all roles are considered Category I activities, which require prior approval.

 

11. If I receive no compensation for my efforts in an executive or managerial position, am I still obligated to pursue prior approval for my activities with the company?

Yes, Category I activities, although performed without compensation, require prior approval and count toward your time threshold for outside professional activities as determined by your department’s Compensation Plan.

 

12. If I were to continue my relationship with the company as a member of the board of directors, would I be obliged to seek prior approval?

No, serving on a board of directors is a Category II activity that does not require prior approval. However, the activity counts toward your annual time allotment as determined by your department’s Compensation Plan, and earned income, if received, counts toward the earnings approval threshold.

 

13. What are my obligations if I were to enter into a consulting arrangement with the company?

Consulting is a Category II activity and does not require prior approval. However, the activity counts toward your annual time allotment as determined by your department’s Compensation Plan and earned income counts toward the earnings approval threshold. If you have an equity position with the company, you should disclose your relationship to the Conflict of Interest Advisory Committee (COIAC) to clarify how to manage any conflicts that arise related to consulting or performing research activities funded by the company.

 

14. I founded (or co-founded) a company prior to the implementation, in July 2015, of APM 671, which has determined that assuming a founding/co-founding role of a company to be a Category I activity. Am I now obliged to seek retroactive approval as founder (or co-founder)?

No. However, if you presently have a continuing association with the company in any of the roles discussed in the questions/answers above, the activity, the time spent on the activity, and the income earned from the activity are to be disclosed and reported as specified in each instance above.

Please note that members of the HSCP may not form partnerships, be separately incorporated, or be members of a group professional corporation, or the legal equivalent thereof, for the provision of professional healthcare (clinical) services.