The Deepening Caste System in Higher Education, Addendum 2

In my first two posts in this series (links provided at the end of this post), I commented on the excessive compensation being received by David Petraeus for teaching a course as an adjunct faculty member at a CUNY campus and by Gordon Gee as president of Ohio State. This post provides updates on both of those stories.

Responding to the bad press generated by his receiving $150,000 to teach a single class (and, when I say teach, I mean that he will present material during the three-hours of class meetings each week; others have been hired to respond to student questions outside of class and to assess student work for the class), David Petraeus has announced that he has agreed to teach the course for $1. This gesture brings to mind the industrialists whom F.D.R. recruited to manage American weapons production during World War II (the so-called “dollar-a-year men”) and Lee Iacocca’s response to the Federal bailout of Chrysler in the 1980s. (It must be noted, however, that when Chrysler once again become solvent, Iacocca was richly compensated for managing that turnaround.) I suppose that someone’s giving up a $150,000 pay check for teaching a single college class is an event of equal historical significance.

I am being somewhat snide because, honestly, I am not sure what to make of this turn of events. I suppose that it represents a small victory for those of us who have been trying to bring attention to and, perhaps, to slow the corporatization of higher education. And it may be that David Petraeus himself recognized how out of step his initially announced compensation would have been with what the typical adjunct faculty member earns. But whenever corporate management or university administrations respond to public pressure, one wonders if they actually understand the issues raised as much as they are annoyed by their having been raised, and one worries that some sort of other “deal” has been reached that basically makes a mockery of the publicly announced resolution.

In a Wikipedia article on those who have accepted $1/year in compensation—and there is a much longer list than one would have expected—it is noted that CEO’s of some very profitable corporations have limited their salaries to $1/year simply for tax purposes. For instance, in 2010-2011, Larry Ellison, the founder and CEO of Oracle, received more than $77 million in other compensation.

Other corporate executives who have managed their tax liabilities in much the same way include Mark Zuckerberg of Facebook, Sergey Brin, Larry Page, and Eric Schmidt of Google, Meg Whitman of Hewlett-Packard, Terry Semel and Jerry Yang of Yahoo, Mark Pincus of Zynga, Vikram Pandit of Citigroup, and Richard Fairbank of Capital One Financial.

Several corporate leaders have, however, eventually accepted no compensation whatsoever: Steve Jobs of Apple, Richard Kinder of KinderMorgan, and John Mackey of Whole Foods. I am assuming that their extensive personal holdings of stock in their corporations made their receiving other annual compensation somewhat redundant.

Likewise, several political figures, whose great personal wealth has made their salaries for public service essentially superfluous, have accepted governmental salaries of $1/year: Michael Bloomberg as Mayor of New York City, Arnold Schwarzenegger as Governor of California, and Michael Riordan as Mayor of Los Angeles. Because he is now the least widely known of the three, I should explain that Riordan had made a fortune as a corporate raider—as one of the early masters of the leveraged corporate buyout– and then, in the mode of many of the robber barons of the Gilded Age and our New Gilded Age, he became a philanthropist, before finally seeking public office. (Vanderbilt, Carnegie, and Rockefeller never thought to take that last step, though several of Rockefeller’s descendants have done so.)

Given how much Gordan Gee has earned as president of Ohio State University, in both direct salary and deferred compensation, and given that his own off-the-cuff, misfired jokes about the university’s football rivals led to his resignation, one might have expected some sort of similar gesture on Gee’s part in regards to his compensation as the university transitions to new leadership. But if one expected such a gesture, one would have been very disappointed.

In the second post in this series, I detailed the cost of Gee’s new suite of offices as he takes on the newly created position of President Emeritus. When questioned about his compensation for this new position, the university indicated that those details were still being worked out.

Well, the details have now been worked out. Gee will now receive $5.8 million over the five years of his contract as President Emeritus. To be clear, that means that he remains the most highly paid administrator at a public university in the United States. (Last year, Graham Spanier of Penn State, technically received higher compensation than Gee, but Spanier’s compensation reflected his severance package from Penn State; moreover, he is facing criminal and civil trials for his role in the cover-up of Jerry Sandusky’s crimes and will have legal costs that even his very generous compensation will probably not quite cover.)

When Ohio State hires a new President, one assumes that that person will need to be paid more than Gee is now being paid. For it will be difficult enough to find someone willing to operate, not just figuratively but literally, in Gee’s shadow. Paying that person less than Gee is being paid would make the realities of that person’s position so obvious as to be untenable. So, very shortly, this one university will very likely have the two most highly paid administrators at public universities in the U.S.

Previous posts in this series have included:

“The Deepening Caste System in Higher Education”: https://academeblog.org/2013/07/08/the-deepening-caste-system-in-higher-education/

“The Deepening Caste System in Higher Education, Addendum 1”: https://academeblog.org/2013/07/13/the-deepening-caste-system-in-higher-education-addendum-1/

4 thoughts on “The Deepening Caste System in Higher Education, Addendum 2

  1. Unfortunately, the caste system in higher education was evident in the differing salary structures for the humanities as compared to those of the more “scientific” of the social sciences and the “hard” sciences, as well as the professionals schools (generally exclusive of schools of education).

    For decades, academics have accepted the use of “market forces” to justify the deepening disparity in these salary structures — not to mention the disparities with adjunct salaries which are used far more extensively in humanities disciplines than in other disciplines. Thus, indeed, the Petraeus case is disturbing but “market forces” were at play there in exactly the same manner that they are in play every single day for the underpaid humanities faculty. And for the top levels of administration in universities. Only a handful of “super-star” humanities professors are the exception to this general rule — again, due to “market forces.”

    A complete overhaul of the compensation systems in universities is long over-due but not likely to occur any time soon. In part, of course, because the corporatization of the university began a long, long time ago — and the majority of the faculty of the nation’s universities were/are silently accepting of that fact because, in the manner of the Martin Niemoeller saying “they were not humanities faculty.”

    There has been and is no “ich bin ein Berliner” collegiality to be found anywhere on this score, is there?

  2. I think the highest paid “academic” in RI public higher ed is a coach!
    But what is the solution for the humanities profs? They know that to actually hire decent professors in high demand fields (in management, computer science etc) one has to pay more than in humanities, and paying everyone the higher salaries is financially impossible. Do the humanities profs want to not have the higher paid fields on their campus? Perhaps they should be glad they have a nice job without being envious of those with higher pay.

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