Times are tough at public universities. Students and their families are feeling the pinch of high tuition and unfriendly loan markets. Public universities are preparing for reduced state funding and smaller endowment returns. And public university presidents are getting a raise? That’s the bizarre situation that The Chronicle of Higher Education found in its annual executive compensation survey this year. Though it’s tough to argue that executives, like any employee, don’t deserve to be compensated when they are doing their job well, it’s incumbent upon public universities to recognize that giving their executives raises during hard times sends the wrong message about their missions.
Released Monday, The Chronicle’s main finding in its executive compensation survey was that the gap between pay at public and private universities is closing, and fast. The primary reason for this is the dramatic increase in pay at public universities, which was up 7.6 percent on average from last year. Our own president, Mary Sue Coleman, is among this crowd — her pay increased 4 percent this year. Though the average private university still pays about $100,000 a year more than the average public university, during the past five years, executive compensation has risen 17 percentage points more at public universities than at private universities.
But one must wonder that in these economically difficult times, how public universities can justify raising both tuition and the salary of their presidents? And there’s a simple answer most universities provide: If you want a competent executive, you need to pay the high price to get them — and keep them, as private universities and corporations try to lure them away with higher pay. When those presidents do a good job, you need to give them a raise.
It’s tough to argue with that logic, except that it leads to executive compensation quickly spiraling uncontrollably upward, as it has in the past five years. This forces public schools to devote even more of their stretched budgets to paying their presidents. And when you have to answer to taxpayers, like public universities have to and private universities don’t, that puts you in a problematic situation. As public universities, including our own, increasingly beg for more state funding, it’s bad form when people see that money going to presidents’ wallets, instead of classrooms, financial aid or professors.
What is needed is a more sensible approach to executive compensation. This can’t come from state legislatures, which could cap public universities’ pay rates, leaving them less competitive with their private counterparts. Besides, this would likely be a serious encroachment on universities’ autonomy, especially here at the University of Michigan, where a constitutional amendment or serious boilerplate language would be needed to cap Coleman’s salary.
That leaves universities to take this issue upon themselves, justifying their raises when they are deserved and refusing to raise pay when times are tough. Good presidents, who presumably care more about the public service they are performing than the wad of cash they are making, should be able to understand this. Many have already, even turning down raises or giving them back. Coleman has frequently been one of these presidents, except for this year, when she accepted a 4-percent raise.
When students, faculty and taxpayers are feeling the pinch of a bad economy, public university presidents shouldn’t be the only people insulated from the hard times.