University Presidents Are Cashing In, While Students And Professors Get Messed Over

Dear Colleagues:

Professional and daily newspapers have recently let us know that 42 presidents of private universities and 17 presidents of public ones now make more than $500,000. In fact, seven presidents of private universities made more than $800,000 in the 2003 fiscal year, and the outside earnings of some of these (via payments made to them because they are corporate directors, for example) gave them total earnings of a million dollars or more. (Judith Rodin of Penn is said to have made $893,213 in university compensation and about $404,000 as a director of five corporations (for a total of nearly 1.3 million dollars. Boy, financially speaking, Rodin must be the original Thinker, eh?).

Presidents of public universities are no pikers either in the really big money game. Four of them are over or pretty near $700,000. Mary Sue Coleman, the President of Michigan (my own alma mater) made 677,500, which put her "only" in third place among presidents of public universities. (However, it is significant that she also gets at least $100,000 in directors fees, plus shares and stock options -- no piker Mary Joe.) The guy said to be in second place, Carl Patten, made $723,350 for being President of Georgia State University. (Georgia State?)

Ofttimes high compensation for presidents of public schools arises because they receive money from private contributions as well as public monies. (For example, of the $651,400 received by the President of the University of Texas system, $581,169 comes from private contributions; of the $549,783 received by the President of the University of Virginia, $398,362 comes from private contributions. There are many other examples, particularly including Louisville, Texas Tech, and the University of Texas at Austin.)

In fairness to the academy (if fairness is the right word), it is reported that one-third of private college presidents earned "only" between $200,000 and $300,000 in the 2003 fiscal year, and the median compensation for presidents at all public universities surveyed by The Chronicle of Higher Education was "only" $328,400. (Medians were higher in some individual regions (e.g., the South, with a median of $398,002), and lower in other regions (e.g., the west, where the median was $303,651).) Earnings of $200,000 or $300,000 are not exactly chicken feed, yet perhaps they don’t have quite as obnoxious a ring as saying a university President makes nearly $700,000 or a million dollars.

At the same time that we are hearing that university Presidents are making a fortune, we simultaneously read that professors are getting little or nothing in pay raises, and students’ tuitions are constantly going up. Perhaps Georgia can serve as a poster child here. Let me quote from the November 19th issue of The Chronicle of Higher Education:

The University of Georgia’s Mr. Adams [who earned $637,966] was the sixth-highest-paid president in the survey, and G. Wayne Clough, president of Georgia Institute of Technology, was 11th, earning $531,587. The system’s chancellor, Thomas C. Meredith, was 17th, at $501,455. Meanwhile, the system’s faculty and staff members have had no raises since October 2002, and tuition rose 5 percent last year.

On a more general note, it is said that a survey by the College Board showed that public four year schools raised tuition by an average of 14 percent last year and by another 10 percent this year.

So what the hell is going on here? Well, it’s pretty obvious, isn’t it? Some people have found a gravy train in the academic world and are riding it for all it’s worth. Presidents, of course, are not the only ones to be doing this, but they are leading practitioners. Generally speaking, in the education world of today, it is money that speaks, not education. The students get screwed, tuition wise. Large segments of the professoriate get screwed, salary wise (e.g., English professors, philosophy professors, etc.). But the presidents (and the people who run Harvard’s endowment and the football and basketball coaches) make out like bandits -- which may be what some figuratively think of some of the Presidents (or money managers, or coaches) -- and rich schools sit on enormous endowments whose huge annual incomes could each pay far more than full freight for every one of the schools’ students, while the poor cannot afford college. (Harvard’s endowment, by the way, is said to now exceed $22.5 billion. Couldn’t Harvard buy all of Iraq with that sum of money and solve one of our problems?)

Does anyone think, by the way, that Presidents have to be paid $500,000 or $700,000 or a million dollars, or else competent people won’t be Presidents? That apparently is what university trustees, who come from the vastly overpaid corporate world -- where the compensation of the top ten CEOs is said to have increased 4,300 percent since 1981 -- seek to persuade us of. They spout all the usual excuses for unconfined greed -- they tell us what a hard job being President of a university is, how time consuming it is -- it’s 24-7 -- how one has to be able to satisfy and entice so many different constituencies like donors, faculty, alumni, boards, politicians, etc., etc. "[Q]ualified presidential candidates are in short supply," and the boards "are at the mercy of market economics," are what The Chronicle says board members and educational consultants claim. This is all a species of bovine defecation, or bull roar as some used to call it in mid century Chicago.

One is tempted to sarcastically point out, of course, that if the boards and consultants are right -- if huge salaries are needed to attract people who can and will run universities competently -- then the boards are not paying enough if one judges by the continuous difficulties and disasters being experienced by universities. Maybe they should be paying not $700,000 dollars or one million dollars, but seven million or ten million dollars. Or, taking the outrageous corporate world as our guide, as the boards apparently are doing, maybe it should be several score million or one hundred million dollars. Maybe a one hundred million dollar man or woman can clean up what a mere million dollar man or woman cannot.

So much for sarcasm. The truth is that good people -- people with vision, concern, articulateness -- would serve as Presidents of universities for far less than $700,000 dollars or one million dollars, or even "just" $500,000 or $400,000. There are many such persons already serving as presidents or lesser administrators. (Remember the geographic presidential medians discussed above?) There are others who now are not even administrators who could do a fine job if they were to become administrators (and were to focus on education instead of Mammon). The claims of directors and consultants that salary elephantiasis is necessary to get good people is just another transplantation into the academic world of the uncabined corporate greed whose latest, now-20-year-long round was unleashed by Ronald Reagan in the early 1980s. He gave us, and we still have, morning in America -- morning in America for unchecked corporate greed and militarism and mourning in America for those whose values include reasonable limits on these things in the interest of a more balanced society. Balance is plainly missing today in the academic world, where Presidents grow rich, while faculty grow in the other direction, students get soaked -- ever more soaked -- students’ parents denude themselves financially to send kids to college, and lots of people can’t even afford college and are therefore shut out of a major vehicle for climbing the socio-economic ladder. Oh, well, so it goes; at least the Presidents are making money.*

---

*If you wish to respond to this email/blog, please email your response to me at velvel@mslaw.edu. Your response may be posted on the blog if you have no objection; please tell me if you do object.