There is a myth that was originated and propagated by the lay media that college and university presidents are “overpaid.” The facts, based on my experiences, do not support this characterization.
To appropriately consider the compensation of college and university presidents, it is vital to review what they do on a day-to-day basis. The following are the broad categories of presidential duties that I see in my work with colleges and universities:
- Social and public affairs
- Board-related matters
This misconception of overpaying is reinforced by articles that publish presidents’ salaries or elements of their compensation packages (such as sabbaticals), without any deference whatsoever to the challenges presidents face today, the level of success a particular president may be having, the compensation that other people receive for similar positions at similar universities or in the private sector, the period of time during which a particular benefit might have been earned, or indeed any other context at all. Accordingly, it is important for those of us who are committed to attracting and retaining the best, brightest, and most capable people to university president positions to examine the larger picture.
Focusing at the outset on the community college world, articles have been published in The Chronicle of Higher Education dating back to at least 2001 announcing the coming dearth of people who would be available to do these jobs as the Baby Boom generation retires. Subsequent Chronicle articles have described how community colleges are competing with public school systems and even high schools for the top administrative talent because, in most cases, the compensation levels for community colleges have not kept pace with the market. And make no mistake about it: Although we in higher education may tell ourselves “it’s not about the money,” it is. Indeed, no matter what position an individual occupies within the academy, he or she usually has family and personal needs that have to be addressed monetarily, including housing, health care, food and clothing, technology, education, and pensions.
Accordingly, those officials who are in the position of recruiting and retaining top talent for higher education must be cognizant of the constant demands on a president and the inevitable burnout that can lead to, as well as the compensation packages for presidents at similar institutions. In short, trustees who serve on university boards, in their role as stewards of these institutions, must be aware of this market, just as they are in their private business endeavors.
During the course of my career as a lawyer and a compensation consultant in higher education, I have had the pleasure and honor to work with hundreds of college and university presidents. Time and time again, they have informed me of the growing demands placed upon them and the increased expectations of their various constituencies. In some instances, incredible as it may sound, some of these constituencies seem to think of the president as an on-campus super hero. And when a president does not fulfill some of these (often unrealistic) expectations, all too often there are calls for the president to resign.
So when we think about whether presidents are paid adequately, we need to ask several questions:
• Is the academy attracting the best and brightest people to these positions?
• When a specific university is finally able to attract a highly qualified person to be its president, does that president remain in that position for a significant period of time?
- How long is it taking on average for a president to exhaust his or her emotional/physical energy and seek retirement from the presidency?
- Is too much being expected from these individuals?
- As Baby Boomers retire, where will the academy find sufficient numbers of highly qualified educational leaders to fill the vacancies?
Pay and perks are by no means the only factors that can attract and retain the best and brightest. A major aspect that is sometimes overlooked is the quality of people who become trustees. After all, for a university to function at its best, the board of trustees and the president must work hand in glove. Where, we might ask, are the training programs for trustees? Certainly the Association of Governing Boards (AGB) does a very good job of helping trustees. Unfortunately, however, as one who has attended many AGB meetings, I believe that not enough trustees seek out the good services AGB has to offer. Thus, in my experience, one finds too many trustees who “wing it” on many issues, including compensation matters.
As presidential/CEO compensation data demonstrate, presidents of public and private universities are compensated at levels significantly lower than their private, for-profit counterparts. This is true in spite of the fact that the nature of the jobs performed, especially by the presidents of larger universities, is in my opinion significantly more complex than those performed by presidents of for-profit companies of similar size.
Therefore, are university presidents underpaid or overpaid considering what they do, the demands on them, and the compensation marketplace? The above discussion and data can only lead one to conclude that they most certainly are not!
Raymond D. Cotton is a practicing higher education attorney and nonprofit compensation consultant. He is a partner in the Mintz Levin law firm and vice president for higher education of ML Strategies, LLC. His office is in Washington, DC.