- The average salary of the top 20 highest-paid chief executives at public colleges climbed to nearly $1.3 million in the 2018 calendar year, according to annual data released by The Chronicle of Higher Education.
- In 2018, 17 public college chief executives earned more than $1 million in compensation, up from 12 in the 2016-17 fiscal year. (The Chronicle switched from reporting compensation from the academic year to the calendar year.)
- Bonuses and other types of pay continue to make up a significant share of executive compensation. Only one nonprofit college leader had a base salary of at least $1 million in 2018.
Public colleges have come under fire for boosting their top leaders' pay as tuition continues to climb. What The Chronicle reports as annual compensation rose 3.5% for the 20 highest-paid execs when comparing the 2016-17 fiscal year and the 2018 calendar year.
However, James Finkelstein and Judith Wilde, public policy professors at George Mason University who study college executives' compensation, say it's hard to draw conclusions from the report because the way the data is captured differs between the two 12-month periods.
Buyouts and benefits can also skew the sample.
William McRaven (top image), who stepped down as chancellor of the University of Texas System in May, took home the most compensation in 2018 at $2.6 million. He was followed by Texas A&M University President Michael Young, who made about $1.9 million.
Both men vaulted to the top of The Chronicle's annual list because they received hefty deferred compensation packages.
"You see a president retires, and all of a sudden in their final year they got paid $2 million because they had $1 million of deferred compensation," said Finkelstein. "It's too late for the public to get upset about it because the president is gone."
College boards may be willing to pay high salaries in the hopes of attracting talented leaders. However, "there's absolutely no relationship between how much you pay someone and their performance," Finkelstein said.
That's been found to be true for chief executives in the corporate world, he noted. And recent research suggests the same of college presidents.
A recent study published in The Review of Higher Education, for instance, found that paying public college presidents more did not necessarily result in increased revenue from donors or the state. Instead, the relationship between higher compensation and increased state support is "weak at best," according to the study's authors, and could even be negative because lawmakers could be "turned off" by high executive salaries.
Even so, boards often want their compensation to stay competitive with what's offered at nearby universities, said William Tierney, co-director of the University of Southern California's Pullias Center for Higher Education, in an interview with Education Dive.
And some states appear to pay better than others. Six of the top 20 highest-paid executives were the leaders of institutions in Texas, for example.
A new tax could affect executive compensation going forward. In 2017, President Donald Trump signed a bill that established a 21% excise tax for nonprofit employees who earn more than $1 million each year. That could leave colleges with unexpected tax payments, especially when they pay out expensive exit packages.