The athletic association, which will pay for the boost in the UGA president's compensation, approved the new lease agreement Tuesday in a brief executive committee meeting by teleconference.
The association is the nonprofit company that runs the football program and other UGA teams that compete in NCAA sports. Adams is chairman of the association's board and the executive committee but sat out Tuesday's meeting.
Under the lease agreement, the athletic association can continue using Sanford Stadium, Stegeman Coliseum and other athletic facilities on the UGA campus, which are all owned by the state.
In exchange, the association is required to support the university in certain ways, such as helping to pay expenses for the Redcoat Band, helping pay for Adams' fundraising expenses and paying for insurance, upkeep and repairs to athletic facilities - and now, helping to pay Adams' deferred compensation.
At a meeting last week, the regents voted to boost Adams' deferred compensation by $50,000 to $200,000 a year, giving him total compensation next year of $660,318, regents spokesman John Millsaps said.
But the regents also decided not to use tax or tuition money to fund Adams' raise, he said. Instead, they turned to the athletic association for the money as part of a new lease agreement, inserting the new requirement as an amendment to the association's lease agreement.
At the same time, the regents deleted a requirement that the athletic association contribute to the UGA One Diversity Scholarship program, which will be taken over by another university-affiliated foundation.
The unusual financial arrangement on Adams' salary actually stems from a blowup seven years ago between Adams and the UGA Foundation, whose members tried to oust Adams after he refused to renew then-athletic director Vince Dooley's contract.
At the time, the foundation actually was paying more than half of Adams' compensation, just as similar foundations paid big chunks of presidential salaries at Georgia State University, Georgia Tech and other schools.
After the dustup, the regents adopted a policy which allowed the foundations to continue paying part of presidents' salaries. But instead of paying the president directly, the foundations turned the money over to the university system, so only the state was writing paychecks.
The UGA Foundation quit paying for salary supplements, and the Arch Foundation, formed to take the place of the older foundation, didn't have the resources to contribute to presidential pay.
Since then, all of Adams' compensation has come from state funds, Millsaps said.
Though most state employees have had their salaries frozen for the past three years, the regents decided Adams deserved a raise because he is president at the state's flagship university, because he is the most senior president among the state's four public research universities and because they wanted to give Adams an incentive to stay as UGA fundraisers prepare to kick off a $1 billion campaign.
Chancellor Erroll Davis also supports the raise, he said.
Adams got outstanding marks in a recent outside review of his presidency, focusing on what Adams has achieved in the past five years and how he achieved those things.
"Even among those who differed on the way things were done, everyone agreed substantial progress has been made, and this president was the person to lead the institution to the next higher level," Davis said. "The board wanted to send a signal that it wanted President Adams to remain and hang in there."
The regents also saw that the recently hired presidents of Georgia State University, Georgia Tech and the Georgia Health Sciences University were making nearly as much or more than Adams, even though Adams has been serving much longer, Davis said.
UGA spokesman Tom Jackson said Adams and the university would have no official comment, saying the raise was a decision by the regents.