College Presidents’ Salaries Not-So-Slowly Sliding Up the Pay Scale

Student Loan Girl — Wed, 21 Nov 2007 04:09:00 GMT

It costs a lot of money to go to college. It costs even more money to run a college. And it’s costing increasingly more money to pay college and university presidents’ salaries and compensation packages, with many reaching the million-dollar mark.

According to The Chronicle of Higher Education’s most recent survey of executive compensation, salaries for presidents of private institutions has increased 200 percent over the last five years, with 81 presidents making more than $500,000 a year. Eight out of the 182 public institutions surveyed now pay salaries of at least $700,000, a jump from the two who reached that benchmark last year (“Presidential Pay is Increasing Fastest at the Largest Institutions,” Nov. 16, 2007).

In some ways, the life of a growing number of college presidents can be compared to that of a U.S. senator. In addition to their high salaries, these presidents might receive free housing, cars, travel, meals and “gifts” from friends of the institutions.

But with yearly college tuition hikes outstripping both the rate of inflation and increases in financial aid, one of the questions becomes whether rising presidents’ salaries are contributing to rising tuition costs (see our Nov. 4 blog, “Student Loan Debt Is on the Rise”).

A New York Times article by Jonathan D. Glater reports that families and lawmakers are concerned about these unfettered increases, questioning college and university presidents making millions even as students graduate with soaring levels of student loan debt (“Increased Compensation Puts More College Presidents in the Million-Dollar Club,” Nov. 12, 2007).

“The public has lost confidence in the altruistic mission of higher education,” says Patrick M. Callan, president of the National Center for Public Policy and Higher Education, in Glater’s article. “They see higher education as just another institution that’s in it for its own bottom line.”

Salaries on the Rise at Both Private and Public Schools

At private institutions, 81 college presidents earned $500,000 or more in the 2006 fiscal year, an increase of 15.7 percent from the previous year.

NOTE: Because some institutions changed Carnegie classifications, the number of institutions from which these data were collected changed from 670 last year to 654 this year. The statistics do not include special-focus institutions or the compensation of presidents who worked only part of the year.

Data and text courtesy of The Chronicle of Higher Education.

At public universities, the median total annual compensation in 2006–07 for the sample of 182 leaders was $397,349. The following chart shows how many presidents were in each of the $100,000 pay classifications.

Data and text courtesy of The Chronicle of Higher Education.

Schools and Presidents Defend Their Pay

Officials at schools with some of the highest paid presidents argue that “running a large university is increasingly similar to running a corporation,” writes Glater. In fact, the Chronicle points out, more college presidents are coming from corporate environments.

School officials, Glater explains, maintain that generous salaries are necessary both to draw presidents that can operate under the corporate mindset needed “to help build institutional wealth and prestige” and to keep them from defecting to a higher bidding school once they’ve been hired—one-third of public college presidents have no formal written employment contract, according to the Chronicle.

For fear of being ousted as the next Benjamin Lander—the former president of American University who was fired for allegedly requesting more than half a million dollars business compensation for personal expenses—some presidents themselves want to make it clear that not all college heads abuse their compensation packages and expense reimbursements. For some presidents, their greatest yearly expense comes in the form of donations given back to their schools.

In another Chronicle article, reporter Piper Fogg interviewed five college and university presidents about how they spend their money. Although all of them admitted to some personal splurging, they also pointed out the thousands of dollars they give back to the schools they work for (“With All Those Perks, How Do College Presidents Spend Their Money?,” Nov. 16, 2007).

David Hodge, president of Miami University (Ohio), earns $399,005 per year, but has donated more than $100,000 in the last year to create need-based scholarships for his students.

Lois B. DeFleur, president of the State University of New York at Binghamton, might own a Piper Comanche 260C single-engine airplane that she bought over 30 years ago, but the school only reimburses her for mileage at the automobile mileage rate—she pays for the gas, $5 a gallon, out of her own pocket. And out of her $344,500 pay package, DeFleur has donated about $100,000 over the last five years to her school, as well as the $25,000 she received for winning the McGraw Prize in Education.

If college presidents are increasingly expected to operate as CEOs, Hodge and DeFleur certainly differ from typical corporate executives in what they voluntarily give back to their employers out of their own salaries. And while college presidents’ pay is rising rapidly, the Chronicle notes that compared with the salaries of corporate CEOs, college executive salaries still lag far behind.

As long as colleges and universities stay on their current path toward functioning as corporations, presidents’ salaries will most likely continue to climb—it will be for the schools, the students, and the public at large to see if they get the corporate-level college management that corresponds to the corporate-level pay.

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College Presidents’ Salaries Not-So-Slowly Sliding Up the Pay Scale