Does It Matter How Much We Pay Public College Presidents?

Steven Yang / Purdue University

Gov. Mitch Daniels, soon to be Purdue's 12th president.

It wasn’t that long ago that Purdue University paid its president more than twice incoming president Mitch Daniels’ base salary.

Former Purdue president Martin Jischke brought home more than $880,000 in compensation in 2006, one of the highest amounts for any public university president at the time. (Jischke’s sucessor, France Córdova, made $555,000 last year.)

It puts Daniels’ newly-approved contract — and $420,000 base salary — in perspective.

But while the outgoing governor will have a relatively small salary compared to his Big Ten peers, “with state financing for public universities dwindling, executive pay has become a volatile issue in some states. The typical public university president earns about 3.1 times as much as the average full professor at the school,” writes Tamar Lewin for the New York Times.

On the other hand, some argue six-figure presidential salaries are a cost of doing business, pointing out Daniels’ paycheck is a drop in the bucket of Purdue’s $2 billion budget.

Those officials who are in the position of recruiting and retaining top talent for higher education must be cognizant of the constant demands on a president and the inevitable burnout that can lead to, as well as the compensation packages for presidents at similar institutions. In short, trustees who serve on university boards, in their role as stewards of these institutions, must be aware of this market, just as they are in their private business endeavors.

During the course of my career as a lawyer and a compensation consultant in higher education, I have had the pleasure and honor to work with hundreds of college and university presidents. Time and time again, they have informed me of the growing demands placed upon them and the increased expectations of their various constituencies. In some instances, incredible as it may sound, some of these constituencies seem to think of the president as an on-campus super hero. And when a president does not fulfill some of these (often unrealistic) expectations, all too often there are calls for the president to resign.

But the optics of a college president’s six-figure salary get trickier when viewed against trends of ballooning student debt, rising degree costs and budget cutting.

In The Chronicle of Higher Education, University of California at Santa Barbara professor Christopher Newfield writes public college executives have “genuinely tough jobs,” but…

It’s hard to see the big payoffs from the big salaries. This well-paid generation of public-university presidents has presided over the largest per-student public-financing decline in modern American history. If we wanted real performance pay, we would tie presidential salaries not to private fund raising but to the current level of state support. If a president is there while state financing is cut to 1999 levels, then the presidential salary gets rewound to the same time and place.

The real question for presidential pay is this: What does it do to the presidential ability to imagine and rebuild public higher education? A president making $50,000 to $100,000 per month is insulated from the struggling world his decisions create. A president who measures success in private donations has to answer to private donors. A president who thinks a public university should look like a business may spend 10 years—true story—growing the ranks of senior staff members four times faster than the ranks of professors. A president who is dependent on industry winds up speaking in the language of advertising.

(NOTE: If he earns performance-based bonuses, Daniels could receive a total of $546,000 in compensation.)