There were signs in the recently released Chronicle of Higher Education report on college and university presidents’ paychecks that higher education is gaining a sense of limits. From 2010 to 2011, the total compensation for the chiefs of nonprofit higher-ed institutions edged up only 3.2 percent. But there were also signs of the old profligacy. The number of presidents collecting more than $1 million rose by 17 percent, to 42. And 2011 was a tough economic year, when median household income dropped and average student debt soared toward $30,000; one could argue that presidential compensation should have dropped as well. Next year’s survey will tell whether universities are serious about putting the brakes on presidential pay hikes.
Two of the nation’s five highest-compensated presidents were Northeastern’s Joseph Aoun, at $3.1 million, and former Tufts president Lawrence Bacow, at $2.2 million. Also in the million-dollar club were the presidents of Amherst College, Boston University, Brown University, and MIT. Northeastern rightly extolled the university’s across-the-board improvements under Aoun, whose salary included an as-yet-unpaid retirement bonus, while Tufts and Amherst pointed out that their payouts included lump-sum benefits to retiring chiefs.
These explanations are reasonable enough, but don’t justify the extent of the dollars involved. Average presidential compensation more than doubled between 1999 and 2009, according to a survey by law professors Brian Galle of Boston College and David Walker of Boston University. They argue that is “difficult to explain” the steady rise in pay “as simply an increase in the cost of talent.”
But even in Galle and Walker’s study, there were indications that other stakeholders were beginning to pressure institutions to rein in executive compensation. Galle and Walker noted that schools whose high presidential salaries were widely reported often suffer a decline in alumni giving the following year. And now, students are starting to weigh the costs of high tuition. This is all as it should be. Running a university is a major responsibility, and should be compensated accordingly. But no one who goes into academia expects to draw Wall Street-level salaries. Higher-ed chiefs should be well-paid, but within a structure that recognizes the growing burdens on tuition-paying students.