The Tip of the Iceberg

This weekend two studies on the compensation of university presidents appeared.  The Chronicle of Higher Education released its annual report on “Executive Compensation at Public Colleges and Universities”  and the Institute for Policy Studies, a Washington D.C. think tank, released a report finding that student debt and low-wage contingent faculty labor are increasing faster at state universities with the highest paid presidents.

According to the Chronicle, median presidential pay at public universities rose by 5% over the previous year, compared to an increase of just 2.2% for faculty salaries as reported in AAUP’s annual salary survey.  Moreover, the number of public university presidents paid over $1 million annually jumped to 9 from 4 the previous year, with the highest-paid executive once again Ohio State’s gaffe-prone E. Gordon Gee, now at West Virginia.

I’ll have some comments further on in this post about the 9 million-dollar presidents, but let’s first turn to the IPS study.  “The One Percent at State U: How University Presidents Profit from Rising Student Debt and Low-Wage Faculty Labor” examined the relationship between executive pay, student debt and low-wage faculty labor at the 25 top-paying public universities.

According to the report, average executive pay at the top 25 rose to nearly $1 million by 2012 – increasing more than twice as fast as the national average at all public research universities.  While the average executive compensation at public research universities increased 14 percent from 2009 to 2012, to an average of $544,554, compensation for the presidents of the highest-paying universities increased by a third, to $974,006, during that period.

The report’s co-authors, Andrew Erwin and Marjorie Wood, found that administrative expenditures at the highest-paying universities outpaced spending on scholarships by more than two to one.   Moreover, the sharpest rise in student debt at the top 25 occurred when executive compensation soared the most.  The authors also found that the ranks of part-time adjunct faculty increased more than twice as fast at these 25 institutions as the national average at all universities and that by fall 2012, part-time and contingent faculty at the top 25 outnumbered permanent faculty for the first time.

“The high executive pay obviously isn’t the direct cause of higher student debt, or cuts in labor spending,”  Wood told The New York Times. “But if you think about it in terms of the allocation of resources, it does seem to be the tip of a very large iceberg, with universities that have top-heavy executive spending also having more adjuncts, more tuition increases and more administrative spending.”

Tip of the iceberg indeed!  And a tip of the hat to Erwin, Wood and the IPS for connecting the dots and showing the clear links between the student debt crisis, administrative bloat, and the “adjunctification” of the faculty.

Moreover, as the Chronicle report documents, chief executives were hardly alone among the highest-paid public university officials. Athletic coaches made up 70 percent of the public university employees earning more than $1 million last year, and medical doctors another 20 percent.

This brings us back to Gordon Gee and the 9 millionaire presidents.  Ohio State was No. 1 on the list of what Erman and Wood called the most unequal public universities. Their report found that from fiscal 2010 to fiscal 2012, Ohio State paid Gee a total of $5.9 million. During the same period the university hired 670 new administrators, 498 contingent and part-time faculty — and a mere 45 permanent faculty members. Student debt at Ohio State grew 23 percent faster than the national average during that time, the report found.

Gee, of course, had to leave Ohio State after he put his foot in his mouth one time too many.  He is one of four of the nine million-dollar presidents who have nominally “retired” from their posts.  Two others have already accepted other positions. Ohio State paid Gee $6.1 million in 2013, although he left mid-year, which includes $3.3 million in deferred pay and $1.55 million in retirement and severance pay.

Bowen Loftin of Texas A&M is number 2 on the Chronicle list.  He resigned this January after just three years and is now at the University of Missouri.  His $425,000 base salary did not change from 2012 to 2013 but in 2013 he was paid $950,000 in severance and retirement pay.  Quite the windfall for resigning after three years on the job to take another position.

Number 3 on the list is Hamid Shirvani, who was paid roughly $1.3 million in 2013 to run the North Dakota University system.  He “retired” in June 2013 after less than a year in office and was paid $962,095 in severance and retirement pay.

Perhaps the North Dakota trustees thought this a good investment, since by all accounts Shirvani was a toxic and destructive “leader.”  But they should have known he would be a problem.   For some readers, especially in California, may recall Shirvani as the genius who, as President of California State University Stanislaus, paid Sarah Palin some $70,000 to speak at a campus fund-raiser.  Not only did this outrage faculty and students, it was not welcomed by members of the state legislature, where Democrats enjoyed two-thirds super-majorities in both houses.  But this should have been the least of his crimes.  In Shirvani’s tenure at Stanislaus he managed to systematically alienate all constituencies, most notoriously the faculty, who voted no confidence in his leadership and virtually begged the CSU trustees to replace him.

It is worth noting, perhaps, that number 10 on the list, falling just shy of the million-dollar mark, was Mark Yudof, who retired as head of the University of California system in September 2013 and was replaced by former Homeland Security chief Janet Napolitano.  Despite having led the nation’s most prestigious public research institution, Yudof made “only” $591,084 in base pay and $266,000 in retirement pay.  But given, as I have previously reported, that the UC system’s Berkeley campus alone dished out around $13 million for not one but two football coaches last year, perhaps there wasn’t much left for Yudof to leave with.

2 thoughts on “The Tip of the Iceberg

  1. Pingback: Reichman in the Times | Academe Blog

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