November 10, 2003

Are College Presidents Paid Too Much?

Or are they rather paid too little? Or are they, perhaps, paid just the right amount, with not a penny more or less on either side of the ledger sheet about which anyone could reasonably find grounds to query and/or complain?

There's no one answer, of course, in part because compensation levels vary so enormously. I suppose another question might be, Do salaries of $500,000 to $1 million per annum represent a real trend, or are these compensation packages rather isolated and atypical instances?

Anyway, this week (on Thursday, November 13) the Chronicle of Higher Ed. is holding a Colloquy Live on the issue of presidential compensation:

Are college presidents paid too much or too little? With some salaries now approaching $1-million, what is the justification for the increases in presidential compensation?

The guest speaker is Raymond D. Cotton, whose "Negotiating Your Contract: Lessons From the Front" addresses the question, "How can newly appointed presidents get a good compensation package without appearing greedy?" The answer, in a nutshell, for those of my readers who aspire to enter this salary stratosphere, is to not negotiate your own contract but rather get some other party to do it for you (and just so we're all clear on this point: he's not talking about joining a union).


In the comments to this entry, "(no longer a) first time poster" provides a link to this AP item entitled "Salaries of College Presidents Rising." Can you guess who was the top earner among college presidents last year? I drew a blank, and I have to say the answer surprised me. I'll give you a hint: forget about the Ivies.*

Click below to see answer.

*The answer (for those who don't want to read the AP article): Shirley Ann Jackson, president of Rensselaer Polytechnic Institute in Troy, New York, who commanded a salary of $891,400, which was nicely supplemented by an additional $591,000 for serving an eight corporate boards.

Posted by Invisible Adjunct at November 10, 2003 02:38 PM

Excellent! I simply cannot wait to employ such modest and appropriate tactics myself! Upon entering the job market in a few short years, I shall engage the services of the local barrister, who I am sure will secure a modest and appropriate contractual obligation.... Even better, I shall use this information upon receiving the flood of acceptance letters sure to come my way in the spring. Ingenious! My thanks to Mr. Cotton for providing this eminently useful template....

"Today, the following bonuses have been brought into higher education primarily by the businesspeople who now serve on most boards: performance bonuses, retention bonuses, and signing bonuses."

Let's see, what was that about the university system becoming a corporate entity based on 1)the credentialing of paying consumers, and 2)the exploitation of a cheap, transient, and disposable workforce? I can't for the life of me remember.....

Posted by: shkspr at November 10, 2003 03:48 PM

This Associated Press article dovetails nicely into this discussion . . .

Posted by: (no longer a) first-time poster at November 10, 2003 04:01 PM

Aha. Now I know what will be the very first thing to do when I get my PhD - find myself an agent.

Posted by: aa at November 10, 2003 04:02 PM

Why wait? After 5 years in grad school, isn't one eligible for a "retention bonus"?

Posted by: shkspr at November 10, 2003 04:09 PM

I say hire Scott Boras, the sports agent who procured Alex Rodriguez's highest contract in the history of professional sports -- $25.2m over ten years, or Jeff Moorad, who negotiated Manny Ramirez's 8 year $160m contract.

Posted by: Chris at November 10, 2003 06:04 PM

To be perfectly clear, Boras negotiated a quarter-billion for A-Rod.

That's a lot of money...too bad it can't buy the Rangers out of last place.

Posted by: Nathan Lundblad at November 10, 2003 07:22 PM

Actually, U. Presidents have been leveraging their pay against football coach's pay. Can't have the subordinate paid more than his boss, can you?

Posted by: zizka at November 10, 2003 08:34 PM

Ah, once again Joe Pa sets the standard.

Posted by: Chris at November 10, 2003 08:53 PM

Will you promise not to laugh at me if I admit I have no idea what you guys are talking about?

No, it's okay: go ahead and laugh :)

Posted by: Invisible Adjunct at November 10, 2003 10:24 PM

These guys are professional baseball and football people. Football and baseball are sports -- sort of like curling, except that there's a lot more money involved, and a few other things.

Posted by: zizka at November 11, 2003 08:19 AM

I'm sure that university Presidents and other administrators look longingly at the corporate sector, and seek to use corporate compensation packages as an indicator of what they should be paid. But it seems to me that the role of a university President is in no way comparably to the role of a corporate CEO. (Indeed, the term "administrator," as used in education, is rarely used in the corporate world, except for certain low-level positions).

In the university, the primary role (teaching) could be carried out just fine, for the most part, even if the university administration did not exist..yeah, you might have to teach in your living room instead of a classroom, but the class content and delivery would be the same. You don't need any university administrators to tell you how to teach. In many cases, they really *are* just keeping the lights on and the grass trimmed.

This is far from true in the corporate world. Consider a manufacturer like Boeing. The organization of the work *is* the essence of the work. No one could build a large commercial airplane by himself. The work is, moreover, highly dependent on expensive capital equipment. Management makes the enterprise possible, in a way that is not true of management and the university.

These are somewhat half-formed ideas and probably not too well-stated, but I do believe that there are tremendous differences in the nature of "management" across the sectors, which need to be explored. Comments are welcome.

Posted by: David Foster at November 11, 2003 12:20 PM

I'm not really suprised that he didn't make the list but Constantine Papadakis of Drexel University actually falls pretty close behind Penn's president and most def. beats out Unv of Delaware and Rutgers. Its still suprising to consider how much he's getting payed, especially when you listen to current students complain about the job he's doing.

However, one only has to look at how Drexels turned around in just about every sense from five or six years ago and I can't say he doesn't deserve it.

Posted by: Chris at November 11, 2003 12:48 PM

It was enscribed:

I say hire Scott Boras, the sports agent who procured Alex Rodriguez's highest contract in the history of professional sports -- $25.2m over ten years, or Jeff Moorad, who negotiated Manny Ramirez's 8 year $160m contract.

If you can get either one to return your phone calls...

Posted by: Jonathan Goldberg at November 11, 2003 08:52 PM

Um ... is there ANY reason that, especially at public universities, we taxpayers are wiling to shell out more for coaches and U presidents than we do for the President of the USA? He's still at $400k per annum, plus expenses, right? And he has access to WMDs, veto power, etc.? How truly weird is that?

Posted by: Another Damned Medievalist at November 12, 2003 03:16 PM

A.D.M.: The POTUS is able to distribute favors hand over fist for four years. Once he's out of office he can get paid a million dollars for a fifteen-minute speech (Reagan in Japan). We don't need to pay them; they'll succeed in feathering their nests anyway.

Posted by: zizka at November 12, 2003 04:06 PM

If you want an interesting exploration of the executive pay issue, read Rakesh Khurana's great book, "Searching for a Corporate Savior: The Irrational Quest for Charistmatic CEOs"

Posted by: alex at November 13, 2003 11:14 AM