College Presidents Paid Too Much?

California Governor Jerry Brown thinks so:

http://gov.ca.gov/docs/SKMBT_C45011071120240.pdf

Last year, in my COMPENSATION AND BENEFITS LAW BULLETIN, I said as much:


College presidents are the next group of CEOs to line up for big bucks
Not to be outdone by their counterparts in the for-profit world, says a new survey, public-university CEOs are bellying up at the buffet for ever bigger bucks. According tot he Chronicle of Education --- the newspaper of record in the industry --- median public-president compensation packages climbed to $436,111 in FY 2008-09, a 2.3% bump at a time fiscal austerity. Still, says the paper, the increase is modest compared to the average annual 7.5% increases of the prior four years and a banner 19% climb in 2005.
Nonetheless, some CEOs are knocking at the front door of the million-dollar club. Topping the list is the president of Ohio State with a 2009 comp package that the Chronicle pegged at $1.6 million. Close on his heels were the presidents of:
· University of Washington ($905,000)
· University of Delaware ($810,600)
· University of Virginia ($797,050)
· University of Texas ($787,260)
In an earlier survey --- November of last year --- the Chronicle reported 23 private-college presidents in the million-dollar-plus bracket with the CEO of Rensselaer Polytechnic Institute at the top of the heap ($1.6 Million). Top community college presidents, it reported, hover around the half-million-dollar mark.
On the other hand, the Chronicle’s editor observed that a third of those surveyed got no increase. Jeffrey Selingo opined that “the bad economy and fiscal crisis in many states” has “finally put a halt to those large pay increases” of the prior four or five fiscal years.
All the same, the New York Times commented, “Still, the largest compensation packages are unlikely to provide much comfort to students and families that have seen tuition rise or financial aid fall, or to professors who may have received pay cuts or even lost their jobs.”
Author’s Comment. Your Bulletin has made a regular practice of tracking executive compensation. (See your December 2008, March 2009, June 2009, July 2009, August 2009, September 2009, and January 2010 issues.) The most recent round of bonuses paid to top dogs at bailout beneficiaries has been so closely covered and loudly decried during the past month or so, that it hardly seems worthwhile to take up valuable space hear decrying this piggishness. I leave hat to others.
But with regard to college presidents, the unending tendency of college costs to outrun national inflation compels me to highlight this evidence that top management in higher education is no less greedy than their counterparts across the for-profit spectrum. And, while we consumers can punish private companies by buying elsewhere, we and our kids can’t realistically choose not to opt for higher education… not in a world where a college diploma has become the minimum credential required for admission to the middle-class midway.
The American higher education industry remains the finest in the world. However, in the words of commentator Jonathan Cole in the January 8th Chronicle, “Threats to our preeminence… can be found within the bellies of our great universities themselves. The commercialization of intellectual property undermines the core values of open communication and the normative prohibition on individual scientists’ and scholars’ profiting directly from their discoveries. Are our extraordinary universities selling their souls to the devil when scientists pursue the financially most lucrative research rather than the most fundamental problems?”
What Cole is driving at, I think, is that our higher education industry is poised to leap off the same cliff that America’s manufacturing and financial-services industries plunged from, each in its turn. And what pushed them? The greed and myopic vision of their CEOs and other senior executives, who were bedazzled by short-term gains that they could translate into big bonuses and --- even as failure stalked them --- golden parachutes.
In this author’s view, the slide began in higher education with the exorbitant packages presented on golden platters to big-time football and basketball coaches. It is accelerating with the seepage into the president’s office. As researchers and teachers, like baby birds in the university nest, squawk for their “fair” shares, we parents and students will continue to mortgage our diplomas to pay for these premium packages.

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In his July 12th letter to the Chairman of the CSU Board of Trustees, Governor Brown writes, "The assumption is that you cannot find a qualified man or woman to lead the university unless paid twice that of the Chief Justice of the United States. I reject this notion."

Bully for your, Governor. If only more corporate boards and shareholders had the same guts, maybe we could drive the piggies from the troughs.
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