This report reviews the policies and resultant compensation levels for executives in California public higher education. The report also contains information on California's community colleges. In responding to the legislative directive, the report focuses on describing changes in policy or compensation levels over the last 12 months. Compensation levels are evaluated in light of a set of national comparison institutions for the California community colleges, the California State University (CSU), and the University of California (UC). Because each of the 72 community college districts in California is responsible for setting the compensation of its own executives, policies vary widely, as do compensation levels. Average salaries of executives in the community colleges increased by six to seven percent. At CSU, executive compensation is to be set at the mean of presidential salaries of an established set of comparable institutions in the United States. In line with the policy, the rate of change in salaries of CSU presidents has exceeded that of other state institutions, and the pay lag for executives of all types has been reduced, although not eliminated. National comparisons are also used to set the compensation for executives at UC and all its branches. UC has been attempting to simplify its executive compensation policies and has succeeded in reducing the lag between UC and comparison institutions, making the university better able to compete for executive leadership. (Contains 11 displays.) (SLD)