Monday, November 17, 2008

As Economy Sours, Presidential Pay Draws Increased Scrutiny

From the issue dated November 21, 2008

The price of leadership continues to rise in higher education, particularly for public-university presidents. According to The Chronicle's latest survey of executive compensation, median pay and benefits rose 7.6 percent in 2007-8, to $427,400, for the leaders of 184 public research universities.

Many of the nation's wealthiest private institutions also had big pay increases at the top. And some community-college leaders, who earn far less than their four-year peers, made big strides in the past year.

Over all, compensation stayed relatively flat at private research universities but rose about 6 percent at private master's and at bachelor's institutions, the survey found.

Presidents of public research universities, who have traditionally earned less money than their private-college counterparts, are gaining ground. Fifteen public universities paid their top officials more than $700,000 in total compensation in 2007-8, the survey found. In 2006-7, just eight public-university leaders earned that much.

And it is not just the richest institutions that are putting more money in their leaders' pockets. Presidents at nearly one-third, or 59, of the public research institutions surveyed earned total compensation of more than $500,000 in 2007-8. (Among private college presidents, 89 earned $500,000 or more in 2006-7, about a 10-percent increase from the year before.)

E. Gordon Gee of Ohio State University was the highest-paid public-university president in the 2008 academic year. Including a $310,000 bonus announced this month, he brought in $1,346,225. Only three private-college leaders made more in 2007, the most recent year for which data are available: David J. Sargent, of Suffolk University ($2,800,461); Henry S. Bienen, of Northwestern University ($1,742,560), and Lee C. Bollinger, of Columbia University ($1,411,894).

Economic Troubles

The pay increases at many institutions happened before the worst of the economic turmoil hit. Since then a handful of college leaders have handed back their bonuses or turned down raises, as their campuses grapple with state spending cuts, hiring and building freezes, and worries over rising tuition. (See article.)

Increases in presidential pay have stirred concerns on Capitol Hill. Charles E. Grassley, the top Republican on the Senate Finance Committee, who has scrutinized the finances of the wealthiest colleges, said in a statement released last week that he is worried about presidential pay increases at a time of rising tuition and tight student aid.

"The Chronicle's study shows that the executive suite seems insulated from budget crunches," Mr. Grassley said. "In these hard economic times, apparently belt-tightening is for families and students, not university presidents."

Mr. Grassley said that the salary increases may be justified but that students, parents, and university boards should be given more information "so they can decide for themselves" whether presidential pay is reasonable.

As executive compensation faces questions, The Chronicle looked at how college presidents' pay compared with the compensation of chief executives at nonacademic organizations, and it asked a college president and a faculty member to weigh in on whether college leaders deserve their salaries. (See all articles in this supplement.)

Other highlights in this report:

Thinking of serving on a corporate board? The pay's great — but so are the risks.

Why does little-known Suffolk University have the highest-paid president?

Presidents of regional state universities have responsibilities similar to those of leaders of more complex institutions, but they earn considerably less.

Like many community colleges, those in California are having trouble attracting leaders.

Big blind spots can hinder presidential searches.

Want a raise? Try looking in the Evergreen State.

In January, The Chronicle will offer salary information about other top officials at private colleges. The data will include the salaries of the chief financial officer, the chief academic officer, and the five other highest-paid employees on about 600 campuses. Look for announcements of this data in the coming weeks on our Web site.

Section: Executive Compensation
Volume 55, Issue 13, Page B3

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