Multi-Million Dollar Salaries and Perks for University CEOs on the Rise

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September 5, 2013; Mother Jones


Some years ago, there was a survey conducted by a couple of national nonprofit leadership organizations to ascertain the “core values of the nonprofit sector.” How do the ever-rising salaries of private university presidents—while faculty salaries stagnate and tuition costs to students skyrocket—reflect the core values of the nonprofit sector? Jaeah Lee and Maggie Severns writing for Mother Jones note that a number of private universities—and, to be fair, public universities as well—are providing pay and perks to university presidents that are kind of mind-boggling.

Their list of outrageous perks includes: New York University’s $1 million low-interest loan to president John Sexton to buy a summer home on Fire Island (NYU also forgave one-third of the mortgage it had provided to current Treasury Secretary Jack Lew when he left the school in 2006); Johns Hopkins University’s payment to Bill Brody, its outgoing president, of $3.8 million in retirement benefits; the $1 million exit bonus paid by the New School to outgoing president Bob Kerrey, the former senator from Nebraska; and Vanderbilt University’s payment of $6 million in 2011 to Harry Jacobson, the former chancellor of the school’s medical center even though Jacobson had retired two years earlier.

In case you’re concerned who might be ultimately paying for these costs, here are the one-year undergraduate tuition, fees, and room and board costs for these nonprofit universities (tuition, fees, room and board statistics drawn from CollegeData):

  • New York University: $59,337
  • Johns Hopkins University: $57,820
  • New School: $55,340
  • Vanderbilt University: $56,612

Mother Jones also published a list of private university presidents who made more than $1 million in 2010, topped by Kerrey at the New School with a top salary of $3,047,703, followed by a long list of others. (We’ve added the tuition/fees/room/board figures to the list.):

  • Shirley Ann Jackson, Rensselaer Polytechnic Institute, salary: $2,340,441; tuition, etc.: $56,925
  • G. David Pollick, Birmingham Southern College, $2,312,098; $40,910
  • Mark Stephen Wrighton, Washington University (St. Louis), $2,268,837; $57,285
  • Nicholas S. Zeppos, Vanderbilt University, $2,228,349; $56,612
  • Steven S. Sample, University of Southern California, $1,963,710; $56,903
  • Lee C. Bollinger, Columbia University, $1,932,931; $58,742
  • Richard C. Levin, Yale University, $1,616,066; $55,300
  • Robert J. Zimmer, University of Chicago, $1,597,918; $56,718
  • Jack P. Varsalona, Wilmington University, $1,550,218; NA
  • Amy Gutmann, University of Pennsylvania, $1,461,742; $55,934
  • Nathan O. Hatch, Wake Forest University, $1,458,499; $54,860

What’s going on here? Some people might say that for top schools to attract top talent, you have to pay top dollar. Some advocates in the nonprofit sector suggest that high salaries like these are perfectly acceptable, and that nonprofit CEOs should get salaries comparable to private for-profit sector salaries—and these are. The Mother Jones authors note that the trustees of universities are often CEOs themselves (a higher proportion of private university trustees come from the corporate sector than the trustees of public universities) and their salaries have also skyrocketed in recent years, so it makes sense that they would assume that the presidents’ salaries at the universities they oversee would also rise accordingly. Running New York University, the New School, or Vanderbilt is really running a big-time corporation, and the CEOs of these entities ought to be paid commensurately.

On the other hand, much like at private corporations, while the CEOs’ salaries are rising year after year, that doesn’t go for the salaries of faculty, much less non-faculty employees. Increasingly, universities get by on hiring part-time adjunct professors, who are paid roughly between $2,000 and $3,000 per course (with no benefits), as opposed to hiring full-time faculty. The proportion of university faculty who are part-time has risen from about 30 percent in 1974 and around 40 percent in 1993 to over 50 percent in 2011. Much like in the corporate world, where average hours per week is sinking and where part-time employment is increasingly the norm, underpaid part-time faculty at colleges and universities are the new faculty majority. Add in graduate assistants, and non-tenure part-time faculty might be as high as 75 percent. Universities keep their labor costs low and make them lower by following the corporate model even while their CEOs pull in ever more lavish salaries and perks. Pablo Eisenberg calls this “the caste system in higher education.”

If university CEOs run their schools like private corporations, pushing labor costs down by hiring low-cost, no-benefit part-timers, do the CEOs’ seven-figure salaries and associated perks reflect the values of the nonprofit sector?—Rick Cohen

  • Mat Despard

    Like large hospitals and health care systems that limit the amount of charity care they offer while handsomely rewarding their executives, colleges and universities are following suit with compensation packages and dwindling financial aid, which leads me to believe that these really are not “nonprofits” in the sense that most people believe but may more appropriately be labeled “public interest corporations” and subject to something more than full exemption from corporate income tax.

  • Nell Anvoid

    What is there to debate here? Higher education has turned into a crazy, self-destructive business focused on “competing for students.” Good schools now go into paroxysms when the inane “rankings” and ridiculous annual guidebooks place them below their perceived peers. I won’t even go into the neurotic fetish with so-called and self- proclaimed “elite” schools. As a result parents and kids make really foolish choices that put them into obscene long term debt…when they could be getting a world class education at a good public university. Massachusetts is the poster child for this psychotic snobbery because there are so many private colleges laughably claiming to be elite. Just compare the overall experience at a snooty, juvenile, academically-mediocre alumni factory like Boston College with the global dynamism of and cultural vibrancy of a research based campus like UMass Amherst. Around Boston, BC gets all the accolades. But 20 miles away, the rest of the world seems to understand the land-grant gem we have out in Amherst. It’s no wonder that the self-referenced governing boards at private schools treat school heads like rock stars; it’s all about keeping up that “elite” image.

    And no….it’s not an admirable ethos.

  • TK

    The University of Chicago is #3 in average pay for its professors:

    Its president is not #3 in pay. He is not overpaid.

    He has done a good job for UChicago and most people there feel he is worth the money.