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EAF563: American college & university presidents. “Issues, problems, and current topical concerns in the administration of higher education. Specific topics vary and students complete research projects on selected current critical issues.”

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  1. 1. Outcry over equity: Presidential salaries Amelia Wood, M.S. EAF563-02: American University Presidents Summer, 2014
  2. 2. Terms • An incentive is usually a payment tied to a pre-set goal or objective; • a bonus is a discretionary payment for overall good performance. • Both terms describe cash compensation beyond base salary, usually awarded at year’s end. • Jim Lanier explains that setting foundation CEO compensation should be the result of a reasonable benchmarking process. • Pres. Horace Mitchell talks about fair market value: Video ACE series 2AWood, M.S.2014
  3. 3. University president’s salaries: An overview (Chronicle, 2014) • Highest paid: Ohio State, President Gordon Gee at $6.1 million. (DIVE, 2014) • Bowen Loftin at Texas A&M University, and Hamid Shirvani at North Dakota University, top 3 highest paid. • Ranked by compensation per $1 million in total school expenditures, the highest paid president on the list was Mickey Burmin at Bowie State University. His pay was $308,265, or $3,805 per every $1 million of the school’s $81 million in total expenditures. • Lowest paid: Baton Rouge, LA. King Alexander at $14,680 • Chronicle interview w/Pres. Gee. ~ Chronicle Videos 3AWood, M.S.2014
  4. 4. By the numbers: 2012-2013 Button, K. (2014) • $478,896 was the median pay for university presidents. • $441,392 for 2011-12, trend toward annual increases • RE: Parachute packages: – e.g., Graham Spanier departed president after being fired from Penn State over the Jerry Sandusky child sexual abuse scandal garnered $2.9 million dollars. 4AWood, M.S.2014
  5. 5. Outcry over inequity . . . “The core mission of any university, and consequently its leadership, is to educate students and help them complete a degree. With poor and disparate student outcomes, colleges like the University of Houston and the University of Minnesota should invest more resources in their students, instead of their underperforming leaders.” Equity Line 5AWood, M.S.2014
  6. 6. Overcompensated & Underperforming?(Welch,2014) • Nine public college executives earned more than $1 million last year with little connection between president pay and college performance in serving students. • Of those nine executives include two lead institutions where the six-year graduation rate is far below the national average of 59 percent. 6AWood, M.S.2014
  7. 7. Yet, student costs continue to rise. Tyson, C. (2014). Throwing rocks at the ivory tower. Inside Higher Ed. http://bit.ly/1olYiIe Mettler, D. (2014). Degrees of inequality: How the politics of higher education sabotaged the American dream. Basic Books: NY http://nyti.ms/1olZTxD There is a plethora of information related to student inequities 7AWood, M.S.2014
  8. 8. Policy reports are mixed. Increased criticism: Should salaries be performance based? 8AWood, M.S.2014
  9. 9. e.g.,Complete to compete vs increase salaries Gregoire, C. (2011). From information to action: Revamping higher education accountability systems. NGA Initiative. Most policy reports Measure the institution not the president. More studies are needed. 9AWood, M.S.2014
  10. 10. Governing Boards evaluate Presidents • "It's important for a president to have clear goals, and for him and the board to be able to measure how he's meeting them," says Patrick M. Callan, President of the National Center for Public Policy and Higher Education. • But any formal evaluation is complicated by the difficulty of determining exactly what a board expects of a president. Is he an academic leader? The chief fund raiser? There's a great deal of ambivalence.“ (Basinger, 1999) 10AWood, M.S.2014
  11. 11. Discussion Questions • Are Presidents overcompensated & underperforming? • Should presidents receive performance bonuses? • What solutions would you propose? • Should presidents take dirty money? ~ Sentinel interview with Borstein & Trachtenberg (Kunerth, J. 1992). • Hard question at a time when cash-strapped colleges nationwide are cutting programs and faculty was a hypothetical one: “Would you accept a gift of $5 million a year for five years from an organization that called itself Friends of Saddam Hussein?” (or any notorious bad guy.) 11AWood, M.S.2014
  12. 12. References • Assoc. Gov. Brds. (2014). Setting foundation CEO compensation. YouTube. http://youtu.be/1pYvZMJcK7o • Atwell, R. (2008) Presidential compensation in HE. AGB.org. http://bit.ly/1mT9JQZ • Button, K. (2014). Highest-paid public college president made $6.1M in fiscal 2013. DIVE, http://bit.ly/Tm39vg • Chronicle Video (2014). Leadership series. Gordon Gee http://bit.ly/1mSXPGV • Chronicle Video: College Presidents Talk Leadership at ACE’s Annual Meeting. Horace Mitchell. http://bit.ly/1mSYvMk • Chronicle survey (2014). Executive Compensation at Public Colleges, 2013 Fiscal Year. Chronicle survey http://bit.ly/1ufwZg8 • Gregoire, C. (2011). From information to action: Revamping higher education accountability systems. NGA Initiative. http://bit.ly/1sciQV8 • Kunerth, J. (1992). Should colleges take dirty money? Presidents, including Rollins' Rita Bornstein, discuss a tough issue. Orlando Sentinel. http://articles.orlandosentinel.com/1992-07- 16/news/9207160216_1_saddam-hussein-dirty-money-launder • Magnitude of student debt http://www.takepart.com/ivorytower/economic-impact • Quatt C. & Vogel B., (2008). Should presidents receive bonuses? (4)16. Trusteeship, agb.org http://agb.org/trusteeship/2008/julyaugust/should-presidents-receive-performance-bonuses-0 • Rivlan, G. (2014). Book Review. NY Times. Mettler, D., (2014). Degrees of inequality: How the politics of higher education sabotaged the American dream. Basic Books: NY. http://nyti.ms/1olYrLH • Tyson, C. (2014). Throwing rocks at the ivory tower. Inside Higher Ed. http://bit.ly/1olYiIe • Welch, M. (2014). Overcompensated & underperforming. The Equity Line 12AWood, M.S.2014