Updated May 20, 2012

Executive Compensation at Public Colleges Switch to Private Colleges

Presidential Pay Is Still a Potent Political Target

One public system struggles to recruit the best amid scrutiny

In a long-simmering national fight over compensation for public-college presidents, the State of California emerged this year as the primary battleground.

More than any other institution in recent memory, California State University has publicly and sometimes bitterly wrestled with a vexing question for higher education: How much does a public university really need to pay its chief executive in order to recruit the best and brightest without squandering scarce resources? The question is one that eludes simple answers, but Cal State’s new policy of clearly stated salary caps for incoming leaders will test whether a governing board can rein in presidential pay without deleterious consequences.

Public outcry over presidential pay, which has become a potent political target in these lean economic times, appears to have done little to affect what presidents earn at public research institutions. In 2010-11, median total compensation for public-college presidents was $421,395, up about 3 percent from the previous year, The Chronicle’s analysis of 190 institutions and university systems has found.

E. Gordon Gee, president of Ohio State University and a perennial top earner, again leads the list with close to $2-million in total compensation. He was among three presidents to earn more than $1-million in the past year. The others were Michael D. McKinney, who was president of the Texas A&M University system, and Graham B. Spanier, whose long career as Pennsylvania State University’s president ended in November amid a child-sex-abuse scandal involving a former assistant football coach.

Criticism of presidential pay on Cal State’s 23 campuses has increased in tandem with crippling budget cuts and rising tuition, and the state’s fiscal situation looks ever more bleak. California’s projected budget gap has grown to $15.7-billion, up from a January estimate of $9.2-billion.

The outcry over presidential pay at Cal State reached a crescendo last July, when Elliot Hirshman, former provost of the University of Maryland-Baltimore County, was named president of San Diego State University and given a $400,000 salary, which was 33 percent higher than that of his predecessor.

While still below the median total compensation for public-college presidents included in The Chronicle’s analysis, Mr. Hirshman’s pay was pounced on by critics, including Gov. Jerry Brown, a Democrat, as a symbol of excess at a time of austerity. It did not help that Cal State trustees set Mr. Hirshman’s salary on the same day they approved a 12-percent tuition increase, which was the second double-digit percentage increase that year.

Under fire from lawmakers and students, Cal State’s board adopted a policy in January that capped the pay of incoming presidents at 10 percent more than their predecessor’s compensation. But that decision failed to appease critics, who found fault when the board gave the maximum pay to the next two presidents they hired, at the Fullerton and East Bay campuses. An amended policy, adopted this month, freezes all salaries for incoming presidents at current levels, unless a campus foundation can independently finance an increase of up to 10 percent.

A Case Study

Several states limit the total amount of public dollars that can be used for presidential pay, but Cal State’s policy appears unique in its approach to regulating the inflation of compensation from one president to the next. In that sense the university will provide a case study in whether a hard-and-fast limit on pay increases will hurt recruitment.

Raymond D. Cotton, a lawyer in Washington who specializes in presidential contracts, has his doubts about the cap. “I don’t think that’s going to work in a capitalist society,” he said, where a president “can go to Texas or Florida or to private universities where they can pay more.”

But Jim Moss, who has worked for 40 years as a consultant on presidential compensation, said a 10-percent cap is not necessarily “out of whack.” The reality, he said, is that compensation caps exist for most colleges, even if they are not clearly articulated in policy.

“Although it’s a free-market economy, most institutions are constrained by their ability to pay,” said Mr. Moss, managing director of PRM Consulting.

While some limits surely exist for any board hiring a new leader, the president of Cal State at Long Beach says he worries the university is handicapping itself as a recruiter of national talent. After reviewing salaries for presidents across the United States, F. King Alexander said he became convinced that, in most cases, Cal State could only hope to recruit new presidents from three states—New York, North Carolina, and Wisconsin—where pay is also relatively constrained at many institutions. Mr. Alexander theorizes that these states, which have strong public-university systems, have kept salaries lower than states where powerful individual-campus boards tend to one-up each other in a continuing compensation race.

“I’d say we’re in trouble. I know of states we can’t even touch,” said Mr. Alexander. He cited Florida, Michigan, Ohio, Texas, and Virginia as dead ends for recruitment. “The question is, Do our legislators want to be in the national market?”

Several California lawmakers have introduced legislation in recent years aimed at curbing presidential pay, and Mr. Alexander suggests these bills are merely designed to score political points.

“The compensation issue is nothing but a diversion,” said Mr. Alexander, who, in 2006, left the presidency at Murray State in Kentucky for Long Beach, where he earns $320,000 a year. “It’s a diversion that the State Legislature loves to throw out there to newspapers because they don’t want people to talk about the fact that they have cut us by 33 percent” over four years.

State Sen. Joel Anderson, a Republican, has introduced a bill that would ensure no state employee earns more than the $174,000 allocated to California’s governor. He said the cap, which would reduce every Cal State president’s salary, would deter only candidates who have the wrong priorities.

“California must attract the best and the brightest to run our universities, without attracting the greediest,” Mr. Anderson wrote in an e-mail. “When you take a public-service job with the State of California, it’s expected that a portion of your pay comes in the form of serving others.”

Results Close to Home

When college trustees defend escalating presidential pay, they often cite the need to be competitive in national searches in which top candidates are courted by multiple institutions across many states. At Cal State, however, a good number of recent searches have ended close to home. Of the seven presidents hired at Cal State since last spring, four already held positions within the university system.

Lou Monville, a Cal State trustee, said he did not view the recent internal hires as an indication that national candidates have been deterred by the system’s talk of reining in presidential compensation. “There’s no doubt we’re competing in a national market.”

Yet the university recruits heavily from within the state.

Once the newly hired presidents are in place, 11 of the university’s 23 campus leaders will have come directly from other California institutions. Most of those came from within Cal State.

Judging the quality of presidential-candidate pools at Cal State, and how they may be changing, is difficult because the university is not required to disclose the names of applicants. University officials say the pools have been strong but would not even discuss how many people applied for recently filled positions.

Jodie B. Ullman, chair of the San Bernardino Faculty Senate, said she saw no evidence that talk of salary caps deterred strong candidates from applying for the presidency there. Tomás D. Morales, president of the College of Staten Island at the City University of New York, was named San Bernardino’s president this month.

“Our pool was deep,” said Ms. Ullman, a psychology professor and a member of an advisory committee to the trustees on San Bernardino’s presidential search. “Presidents going into public universities are doing it for reasons that are separate from the salary. Presidents and all of us at public universities have a commitment to access.”

Controlling the growth of presidential salaries, Ms. Ullman added, is important both symbolically and practically at Cal State, given how stagnant faculty pay has been at the university. The last significant pay increase for faculty came in 2009, when a 2-percent across-the-board raise was approved, according to the California Faculty Association, a union representing more than 23,000 Cal State faculty members, from part-time lecturers to tenured professors.

The disparity between presidential pay and faculty compensation varies across the nation. A typical public-college leader earned three times as much in total compensation as the average full professor on his or her campus in 2010-11, The Chronicle’s analysis found. The greatest disparity over that period was at Ohio State, where Mr. Gee made 12 times the pay of the average professor on his campus. At San Diego State, which is the only Cal State campus included in The Chronicle’s analysis, Stephen L. Weber, Mr. Hirshman’s predecessor, earned twice as much as the average full professor there in 2010-11.

Golden Parachutes

As is often the case, some of the top earners in The Chronicle’s compensation survey received large deferred-compensation payouts or bonuses upon resignation. Such was the case with Mr. McKinney, whose nearly $2-million in total compensation at the Texas A&M University system included a separation agreement worth $683,000. Mr. McKinney, who provided no specific reasons for his resignation last spring, agreed not to sue the university as part of the arrangement.

For critics of golden parachutes, Michael F. Adams is a fresh target. The departing president of the University of Georgia secured a deal this month that will pay him $2.7-million over five years. The payouts do not begin until 2013, so the package is not included in The Chronicle’s analysis of 2010-11.

The Georgia agreement describes new fund-raising and teaching duties for Mr. Adams, but that has done little to mollify those who see the package as extravagant. Bill Hembree, a Republican state senator, said he was troubled by the deal, even for someone like Mr. Adams, whom he considered an effective president with a 16-year track record of success.

“Higher education has become a game of, How can I get up to that golden perch, so I can leave with great amounts of money?” Mr. Hembree said. “I think it sets a bad example.”

Criticism of pay for former administrators has been particularly intense at the University of Minnesota, where a special committee of the Board of Regents is reviewing executive compensation and paid leave for departing executives. The review followed reports that Robert H. Bruininks, who was Minnesota’s president until last June, approved $2.8-million in paid-leave packages for administrators even if they did not return to the university.

Eric W. Kaler, Mr. Bruininks’s successor, has said the payouts “hurt the public’s trust,” and the board is now considering a policy change that would limit payments administrators could receive on leave. While critical of his predecessor’s actions, Mr. Kaler said he does not think public-college presidents, by and large, are overpaid.

Mr. Kaler’s compensation is not included in The Chronicle’s analysis because he started his job in the 2012 fiscal year. His contract, which is less lucrative than that of his predecessor, provides $642,500 in salary and retirement contributions this year. Mr. Bruininks, whose retirement benefits increased over his eight-year tenure as Minnesota’s president, earned $747,955 in 2010-11.

“People think these are easy jobs. What a romantic thing to be a college president,” Mr. Kaler said. “These are tough jobs.

“Nobody went into public higher education, at least not me, to get rich.”

A caricature of Charles B. Reed, chancellor of California State U., looms over a faculty demonstration in protest of the trustees’ decision to allow foundations to contribute to presidents’ salaries.

Reed Saxon, AP Images

A caricature of Charles B. Reed, chancellor of California State U., looms over a faculty demonstration in protest of the trustees’ decision to allow foundations to contribute to presidents’ salaries.

The Outliers

Public-college leaders who earned the most in the 2011 fiscal year compared with their professors.
Chief executive Pay
ratio
Total
compensation
Average full
prof. comp.

1. E. Gordon Gee

Ohio State U.

12.3

$1,992,221

$161,400

2. Lee T. Todd

U. of Kentucky

7.4

$972,106

$130,700

3. Graham B. Spanier

Penn State U.

6.5

$1,068,763

$164,900

4. Jay Gogue

Auburn U.

5.4

$722,500

$133,000

5. V. Gordon Moulton

U. of South Alabama

5.1

$570,027

$112,800

5. Charles W. Steger

Virginia Tech

5.1

$738,603

$145,300

7. Ronald M. Berkman

Cleveland State U.

5.0

$630,000

$126,300

7. John C. Hitt

U. of Central Florida

5.0

$741,500

$149,300

9. Elson S. Floyd

Washington State U.

4.8

$625,000

$129,000

10. Mary Sue Coleman

U. of Michigan System

4.7

$845,105

$179,400

Typical President (Medians)

3.1

$421,395

$139,550

Omits presidents who did not serve all of the 2011 fiscal year. Includes former presidents who stepped down after 2011.

Find Out How Your President Compares

Presidential and Professor Pay Scatterplot
Compare public-college presidents’ salaries
with professor salaries.