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Increasing cost of education (salaries partly to blame?)

Old 11-18-04, 04:48 PM
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Increasing cost of education (salaries partly to blame?)

From CSM's enewsletter for 18 Nov 04

College trend: big bucks for person in corner office

Running a university is a big job, so those who sit in chief
executives' offices can expect to be well compensated. In its latest
survey, The Chronicle of Higher Education found that even in this age
of tight budgets, 17 chiefs of taxpayer-supported schools are making
more than a half-million dollars each this academic year. The
highest-paid public university presidents, their schools, and their
compensation:

1. Mark Emmert $762,000 University of Washington
2. Carl Patton $722,350 Georgia State University
3. Mary Sue Coleman $677,500 University of Michigan
4. David Roselle $673,700 University of Delaware
5. Mark Yudof $651,400 University of Texas System
6. Michael Adams $637,966 University of Georgia
7. Richard McCormick $625,000 Rutgers University System
8. Mark Nordenberg $553,414 U. of Pittsburgh System
I know this does explain everything regarding the increasing costs, but certainly this sort of thing contributes to it...
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Old 11-18-04, 04:58 PM
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Rutgers has almost 9,000 employees. How much should a CEO for an organization of this size be paid?

If less than $600K, who would take the job?
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Old 11-18-04, 05:05 PM
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Rutgers has almost 9,000 employees. How much should a CEO for an organization of this size be paid?

If less than $600K, who would take the job?
I'm not really making/passing judgement either way, I'm just throwing out an interesting fact I stumbled on to start a conversation. It would be helpful to see if/how these increased over the last couple of years (as tuition has gone up) but I'm not sure the study goes into that and I really don't have time/interest enough to try and dig it up Maybe someone else does.

Overall regarding compensation, I always thought it best to leave it up to "market forces"... in this case though since college is becoming less and less affordable for people it seems the supply side could potentially be readjusted a bit to meet demand, if they feel that's what the need to do

Last edited by nemein; 11-18-04 at 06:28 PM.
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Old 11-18-04, 05:30 PM
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are university finances public info? it would be interesting to see which costs are increasing the most
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Old 11-18-04, 05:33 PM
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are university finances public info?
As long as they are public I can only assume they are... haven't really looked into it.
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Old 11-18-04, 05:34 PM
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1. Mark Emmert $762,000 University of Washington
Former chancellor of my school. Never liked him.
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Old 11-18-04, 05:36 PM
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http://www.suny.edu/FinanceandBusiness/finance.cfm

Link to SUNY expenses. Interesting tidbit in there. Hospital revenue declined and hospital expenses increased. 10-1 that this is because of ER visits by illegal immigrants and now students are left paying the bill.
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Old 11-18-04, 05:51 PM
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I went looking for info on my alma mater's president and found this useful article:

http://home.hamptonroads.com/stories...367&ran=176330

The perks of being a college president
By PHILIP WALZER, The Virginian-Pilot
© October 4, 2004

Old Dominion University’s board last month approved a 15 percent raise for its popular president, Roseann Runte, bumping her annual salary t o $287,500 from $250,512.

But that wasn’t all.

The board also expanded a little-known perk that will be worth a half-million dollars if Runte stays at Old Dominion through 2011.

The deferred compensation plan – worth an average $60,000 a year for the next seven years – is not so unusual.

Thirteen of the state’s 15 public four-year college presidents currently have deferred accounts. Some of them gather more than $100,000 a year. As in the private sector, deferred compensation provides a lavish retirement benefit for top academics and a powerful incentive to stay on the job.

The payments, all from private funds, may be sheltered from taxes until the money is withdrawn. The presidents can’t dip into them until they have served for a certain period – usually five to 10 years.

Deferred compensation offers a significant benefit on top of salaries, which come from a mix of public and private money. In the 2003-04 school year, presidents at Virginia’s public colleges and universities received salaries ranging from $200,000 to nearly $400,000 and deferred payments running from $20,000 to $125,000. That doesn’t include other perks such as free housing, maid service, club memberships and car allowances.

For six of the college chiefs, the deferred payments totaled at least $75,000 annually. Three hit six digits: the University of Virginia’s John T. Casteen III ($125,000), Virginia Commonwealth’s Eugene P. Trani ($108,656), and Virginia Tech’s Charles W. Steger ($108,000).

The deferred allotments tend to be largest for the most senior presidents and those at the biggest schools. Timothy J. Sullivan, the president of the College of William and Mary since 1992, has gathered $908,365 in such payments.

Both Trani and Casteen have been at their jobs since 1990. Trani’s deferred payments so far total $842,000 and Casteen’s $885,000, according to university responses to Freedom of Information Act requests.

Including interest and other earnings, Trani’s and Sullivan’s accounts each surpass $1 million.

Trani’s was worth $1,212,421 as of this summer, and Sullivan’s stood at $1,141,365 .

Some school officials weren’t eager to discuss details of the compensation packages. U.Va. and George Mason University declined to identify the total value of their presidents’ accounts, saying their earnings were personal information.

And at William and Mary, officials initially provided few details on Sullivan’s retirement accounts.

Like most presidents, Sullivan has a deferred account and the school’s Board of Visitors approves the payout. But he has another account that goes straight to him from W&M’s Endowment Association, the private fund-raising arm affiliated with the college, without board oversight.

College officials initially refused to provide any figures from the second account, saying it was exempt from the Freedom of Information Act because it does not pass through the board. The law exempts university foundations, such as the Endowment Association, but requires access to “official salary or rate of pay” of public employees.

Sullivan, a former law school dean, also said that sharing the information, even without naming benefactors, could put a dent in fund-raising. “It’s very important to our current and future donors that the line between private and public funds be bright and clear,” he said.

But officials eventually released the $1.1 million figure. “The only thing that trumps Tim’s dedication to the law and legal profession would be his concern about the welfare of the college,” W&M spokesman William T. Walker Jr. said Friday. “He realized this is not an issue he wanted to raise at this point.” The rewards for college presidents seem excessive to some, a “bargain” to others.

The growth in compensation infuriates Del. John J. Welch III, a Republican from Virginia Beach, at a time when he says many of his constituents cannot afford rising college tuitions. Welch thinks the General Assembly should cap benefits for college chiefs.

“These presidents are hired with a contract; on their contract, it tells them what their compensation will be,” he said. “To think we have to give them substantial pay raises is ludicrous.”

But according to three of the presidents, their total compensation falls in line with those of other university leaders in the country and might be slightly less.

Casteen said he’s seen presidents elsewhere with “excessive” salaries and that Virginia tends “toward the appropriate mid-range of the market.” Trani said his compensation “certainly lags” presidents of other Southeastern universities with medical schools.

“To get people, you have to pay competitive salaries,” said Steger, who estimates that he works 12 hours a day, seven days a week. “I never even ask about the salary, but I do expect to be treated fairly.”

Richmond lawyer Gordon F. Rainey Jr., the rector of U.Va.’s board, is Casteen’s boss. He said, “Being a president of a college as complex and large as U.Va. is a very difficult, tough and demanding job, and I think the taxpayers get a bargain, frankly, with John Casteen.”

Robert Atwell, a former president of the American Council on Education, the leading advocacy group for colleges in Washington, cautions against excessive rewards for campus leaders. He draws the line at a $600,000-a-year package that includes salary, deferred compensation and other perks.

In Virginia, Casteen appears to come closest to that threshold. The total of his itemized benefits nears $575,000. “John has done a fabulous job there,” Atwell said. But if his package increased to $600,000, “I would raise questions,” Atwell added. The trend toward deferred compensation gathered steam about a decade ago as competition for college presidents picked up, said Sheldon E. Steinbach, the general counsel for the American Council on Education.

But not all of them receive it. Many two-year college presidents, including Tidewater’s Deborah M. DiCroce, don’t.

Neither does Willam M. Anderson, the senior four-year public-college president in Virginia, with 21 years at the helm of the University of Mary Washington. His annual salary is $268,500.

“He is happy with his compensation and believes he is fairly compensated,” said Richard Hurley, the university’s executive vice president.

Several academics and board members noted that deferred compensation is common in the business world, at substantially higher levels. “If it would be the private sector, it would be double,” said Virginia Tech’s Steger.

In academia, as in the private sector, deferred compensation serves up “golden handcuffs,” forcing an executive to think twice before leaving for another job, said Old Dominion’s rector, James A. Hixon, an executive vice president at Norfolk Southern Corp.

“It’s also what the market is demanding, in essence,” Hixon said. “If North Carolina and Tennessee and other institutions are offering packages that exceed what we’re offering in Virginia, we run the risk of losing our presidents to other states.”

But Welch and Atwell rejected the market argument.

In an essay in the journal Crosstalk, Atwell wrote: “My experience in the executive search business convinces me that there is no shortage of good candidates for strong institutions and, while compensation is important, it’s not the major driver of presidential aspirants.”

VCU’s rector, Edward H. Bersoff, said Virginia is getting a good deal.

Of the $446,000 total of Trani’s salary, bonuses and deferred compensation for 2003-04, one-third – $151,000 – came from public money.

“At the money the taxpayers are allocating to this task,” said Bersoff, a Northern Virginia business consultant, “no one with the appropriate credential would take that job unless they were independently wealthy.”
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Old 11-18-04, 05:53 PM
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SUNY's shortfall for hospital expenses was $200 million last year. This is a drop in the bucket.
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Old 11-18-04, 08:18 PM
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Originally posted by CRM114
Rutgers has almost 9,000 employees. How much should a CEO for an organization of this size be paid?

If less than $600K, who would take the job?
Assuming Rutgers has 25,000 students (a wild guess, but a typical enrollment), that works out to 25 bucks per student per year. Big deal.
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Old 11-18-04, 08:53 PM
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Originally posted by CRM114
Rutgers has almost 9,000 employees. How much should a CEO for an organization of this size be paid?

If less than $600K, who would take the job?
There would be plenty of qualified people who would take the job. Would some "big names" in academia take it? Maybe not, but that doesn't mean there aren't some "hungry" but capable people willing to take on a presitigious position. It's not always all about money.
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Old 11-18-04, 09:53 PM
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Originally posted by sracer
There would be plenty of qualified people who would take the job. Would some "big names" in academia take it? Maybe not, but that doesn't mean there aren't some "hungry" but capable people willing to take on a presitigious position. It's not always all about money.
can you name one who has shown interest and not been offered the job?
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Old 11-18-04, 10:19 PM
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I'll do it for $150K.
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Old 11-19-04, 06:45 AM
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Is this just for public schools? If it is, I wonder how much more/less the heads of the fancy private schools like Harvard and Yale get paid
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Old 11-21-04, 10:16 AM
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Amazing that Georgia State University's president makes more than UofM.

Shit, it's amazing that he's even UP there.
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Old 11-21-04, 10:48 AM
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Originally posted by sracer
There would be plenty of qualified people who would take the job. Would some "big names" in academia take it? Maybe not, but that doesn't mean there aren't some "hungry" but capable people willing to take on a presitigious position. It's not always all about money.
Uhm, do you want a hungry person running your huge company or a qualified one? That's the rub. There are only a handful of people with the experience and qualifications that make them available.

It is like a head coach in pro-sports. Even a guy who sucked with another team is in good position to land a job. Why? There just aren't that many people with ready and obvious qualities for the job.
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