Pay for college chiefs rising fast
Their compensation has outpaced inflation for five years, prompting demands for oversight, disclosure.
SOURCE: Chronicle of Higher Education/Rich Clabaughâ€“STAFF
When former Sprint Nextel executive Gary Forsee landed a job as president of the University of Missouri system in December, his annual salary dropped from $21.3 million to $400,000, reflecting the huge disparity in pay between the private sector and academia. Still, Wall Street and ivy towers share this in common: charges that the top dogs make too much money.
To the dismay of professors and students, many leaders of public universities make well above $500,000 a year, while several private colleges pay seven-figure salaries to their presidents.
And their pay is growing at a rapid clip: Last fall, a new study found that compensation of university presidents has grown by 28 to 37 percent over the past five years, depending on the type of university. During that time, inflation lifted the cost of living by 13 percent.
Advocates note that the pay of higher-education executives hardly compares to that of CEOs in the business world. But critics complain that the generosity at the top makes no sense as students face sharp tuition increases and professors see middling pay hikes.
"It's completely unseemly for our administrators to imagine that they ought to aspire to those kinds of salaries," says Lillian Taiz, president of the California State University's faculty association.
"We have an obligation to do a good job and not expect to live like millionaires."
Executive salaries are drawing special attention here in California, where university pay scandals continue to roil the Golden State.
The University of California, for one, is looking for a new president to replace Robert Dynes, who announced plans to resign in 2007 after the system gave hefty pay raises and perks to executives without disclosing them publicly or alerting the university's overseers. Mr. Dynes reportedly approved some of the raises and later admitted missing "red flags" amid a culture of "paranoia."
"Students were paying, taxpayers were paying, and people were getting sweet deals," state Sen. Abel Maldonado complained in an interview last summer.
Meanwhile, the 22-campus California State University is under fire for providing perks and benefits to executives without public disclosure. An audit released in November called for a variety of new safeguards, and a new lawsuit by two alumni seeks to eliminate retroactive raises.
Despite complaints from faculty and students, however, one of the Cal State system's regents has announced plans to boost executive salaries by 46 percent over the next four years.
By contrast, salary increases for the nation's professors outpaced inflation just twice in the past four academic years, according to the American Association of University Professors. Student tuition, meanwhile, has grown by almost a third in the last five years at public four-year universities, according to the College Board.
In addition to their base salaries, university executives often get a variety of perks such as incentive bonuses and hefty housing and car allowances.
In some cases, they make even more money outside of academia. University of California at San Diego's chancellor, for example, reportedly earned almost as much as her annual university salary in 2006 serving on 10 boards of directors. The university system set limits on board service in 2007.
Nationally, a survey by the Chronicle for Higher Education found that average public-university president compensation was $397,000 in 2006-07. Eight public institutions paid over $700,000 that year compared with two the previous year.
Ms. Taiz, the faculty association president and a history professor at Cal State Los Angeles, blames the salary increases in part on competition from private universities, which have higher salaries than do public institutions.
Claire Van Ummersen, a vice president with the American Council on Education, says there's a smaller pool of talent, especially for top-notch research institutions. This is especially true as baby boomers begin to retire, says Ms. Van Ummersen, who served as president of Cleveland State University and chancellor of the University System of New Hampshire.
Universities also have to fight to woo executives away from the private sector, where companies may be equal in size and budget to universities but pay executives much more, she says.
Taiz is unimpressed by such arguments. She says it makes no sense for university chancellors to make more than the governor of California. "Public servants don't go into public service for the money, or ought not to," she says.
For the moment, there's no national movement to put a lid on executive salaries. But in California lawmakers have pushed to make it harder for higher education officials to keep executive salaries under wraps.
"The university's defense is, 'We have to pay for the best people.' They should say that and be upright and straightforward about it," says James Savage, a professor of politics at the University of Virginia.