By Andrew Brown
Each year, the College Board publishes a book entitled Education Pays, which extolls the benefits of a college education for a graduate’s long-term career. But for top administrators at many private universities, this title takes on a more immediate meaning.
According to a recent report in The Chronicle of Higher Education, an astonishing 23 private university presidents in the U.S. pulled in pay packages in excess of $1 million during the 2007-08 fiscal year.
The median salary for presidents at private universities was $358,746, a rise of 6.5 percent from the previous year. Presidents at research universities fared even better, with a median of $627,750, an increase of 15.5 percent. The top earner, Shirley Ann Jackson of Rensselaer Polytechnic Institute, pulled in $1,598,247 in total compensation.
While university presidents’ salaries generally soared during the 2007-08 fiscal year, many experts believe that the recession has put the reins on these salaries since then.
Brian H. Vogel is principal of Quatt Associates, a Washington-based company that advises non-profits on compensation. In The Chronicle’s report, Vogel confirmed that these salaries have not seen any type of significant increase in the past year.
“Things have definitely changed since the recession,” he said. “I’m seeing a lot more restraint.”
This restraint can be seen firsthand here at Rider. President Mordechai Rozanski’s 2007-08 compensation of $497,647 was actually less than it was the previous year. This was not the case for the presidents of other area universities.
In a statement, university spokesman Dan Higgins explained why this was the case.
“Typically, the president’s compensation includes performance and incentive awards that are intended to reward and retain a strong leader in a very competitive hiring environment for college presidents,” he said in an e-mail. “The board authorized this incentive retention award for the reporting year involved, but in light of difficult economic times, President Rozanski declined the award.”
He added that the decision, made in 2007-2008, was “in anticipation of economic difficulties.”
For the current academic year, Rozanski has frozen his salary and that of other top administrators because of the national economic downturn.
Numerous Rider economics and management professors declined to comment on what the future holds for pay packages of college presidents.
But many compensation experts believe that the cost of acquiring and retaining top administrators will continue to rise, though perhaps not as quickly as in recent years.
The competition for top academic talent has stepped up greatly, as the retirement of many baby boomers has caused a shortage of proven administrators.
In The Chronicle report, Washington-based contract lawyer Raymond D. Cotton spoke to this shortage.
“There is a dwindling supply of people who can do these complex jobs well,” he said.
University trustees share responsibility for the upward trend in presidents’ salaries. The boards are usually the groups that set up the presidential compensation packages. As many of the trustees come from corporate backgrounds, they structure the contracts in the same way big businesses would.
“They have brought their business ideas with them, including things like bonuses and pay-for-performance,” Cotton said.
An obvious concern is that university presidents’ salaries will eventually be on a par with those of corporate CEOs. In some cases, the university trustees putting together their president’s pay package are the same people structuring contracts for CEOs.
A more apt comparison would be between the presidents and top collegiate coaches. Currently, Florida football coach Urban Meyer earns $4 million annually. In total, 56 NCAA football coaches are earning more than $1 million a year. Kentucky basketball coach John Calipari recently signed an eight-year, $31.25 million contract.
While superstar coach salaries eclipse those of university presidents, it is not unreasonable to think that someday there will be a university president with a comparable pay package.
Take RPI’s Jackson. As previously mentioned, she earns about $1.6 million annually from her university duties.
However, Jackson sits on six corporate boards, from which she pulls in at least another $1.3 million yearly, The Chronicle reported. A former adviser to President Clinton, Jackson also is paid for speaking engagements. After adding all these numbers together, Jackson makes about the same salary as Urban Meyer, $4 million.