A new report compiled by the Chronicle of Higher Education shows private university presidents are raking in larger salaries than ever despite heading organizations that are officially tax-free non-profits.
The Chronicle’s list, which covers the 2013 calendar year (the most recent for which full information is available), reveals presidents of 32 different private colleges are making at least $1 million a year. On average, private college presidents averaged $436,429 in compensation, a growth of 5.6 percent from 2012. Not only are salaries rising faster than inflation, they’re even rising faster than tuition costs.
While average salary is going up, the number of million-dollar earners dropped slightly, from 38 to 32. That number can fluctuate substantially year-to-year because most people earning that much reach that level because of one-year bonuses and other benefits.
A separate survey of public university presidents finds their pay is lower, with only two million-dollar earners, but is growing faster, with a 7 percent increase in 2014.
The most well-paid president by a country mile is Lee Bollinger of Columbia University, who took home $4.6 million in total compensation in 2013. That includes not only base salary, but also bonuses, incentives, and other forms of compensation. In Bollinger’s case, it includes over a million dollars in pay that was deferred over the past 11 years, a tactic many colleges use to encourage presidents to remain long-term.
In terms of base pay, the highest-paid president is John Sexton of New York University, who had a salary of about $1.24 million.
Compensation isn’t simply dictated by a university’s prestige or overall wealth. While the schools with the highest-paid presidents include two Ivy League members, one of the best-paid presidents is Nido Qubein, who earned over $2.9 million for his management of the relatively minor High Point University in North Carolina. Qubein’s pay package amounted to over 2 percent of the school’s total budget.
Meanwhile, Richard Joel of Yeshiva University finished fourth on the list with $2.5 million in compensation, even though the school has been battling severe financial difficulties in recent years, including losing over $100 million in Bernie Madoff’s Ponzi scheme. Yeshiva tells The New York Times Joel’s high figure is due to delayed compensation, and says he has requested $150,000 in pay cuts over the past two years.
Not every college president is raking it in. At a handful of schools, almost all of them religiously affiliated, the president earns no salary at all. Many of these presidents, such as Robert Wild of Marquette, are members of religious orders such as the Jesuits and have taken a vow of poverty.
Exceptions aside, the increasingly high salaries of university presidents are attracting more and more attention in an environment where tuition is outpacing inflation and top universities are piling up enormous endowments tax-free. At Columbia, for instance, annual tuition surpassed $51,000 and the school has an endowment of about $9.6 billion. Even at that hefty tuition figure, it will require over 97 students worth of tuition to finance Bollinger’s salary.
Most non-profit endowments are required to spend at least 5 percent of their value every year to keep their non-profit status, but universities are exempted from this requirement, which in the case of top schools has allowed them to balloon to immense size.
Several boards of directors were quick to defend high salaries when questioned by the Chronicle, though.
“If you’re going to recruit and retain the type of talent that you need to run a university of this complexity and to continue to advance this university’s reputation and the quality of its product, you have to fairly compensate individuals for doing that job,” says David Cohen, who chairs the University of Pennsylvania’s board. President Amy Gutmann was the second-highest compensated president, taking home just above $3 million. Cohen says without her hefty pay package, Gutmann could leave for the corporate sector or another school that offers a juicier package.
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