Record number of college presidents earning over $1M per year
- According to new data released by the Chronicle of Higher Education, 66 college presidents made more than $1M in 2015, a record number which included 59 private institution chiefs and seven from public schools.
- In most cases, the base pay accounted for less than half of the total compensation, and bonuses and other nontaxable income made up the difference.
- Six of the 66 received one-time severance or deferred-compensation payouts.
Under proposals in both the House and Senate versions of the tax bill currently being shepherded through Congress, tax-exempt organizations would pay a 20% excise tax on the salaries of the top-five paid individuals whose salaries are over $1 million, according to analysis by NPR. Most will say paying the campus's chief executive so much is necessary to remain competitive in a market where the number of schools is growing, but the leadership pipeline is shallow.
However, in a climate marked by austerity, affordability and the idea that higher ed is mired in excess and disconnected from the general populace, it may be hard to sell the public on the need to pay executives over $1 million — especially when the average salary for those institutions on the lower end of the socioeconomic totem pole are earning only a fraction of that amount, and wearing more hats to serve students who need more help. This is coupled with a Moody's report released earlier this year which indicated 70% of the wealth in higher ed is concentrated within the top 20 institutions, as well as a New America report which found many institutions are actually backpedaling on access against this news.
As legislators continue to float proposals to tax salaries and endowments at colleges deemed able to afford it, boards should be cognizant of the public perception battles associated with higher compensation packages. This is not to suggest they should be significantly cut, but many of the strategies which are already in place, like deferring compensation and cutting base salaries in exchange for other perks like campus housing, may need to be more heavily leaned upon at the top institutions.
Not only that, but institutions will have to put forth a better showing of trying to serve more low-income students through institutional scholarships. The narrative cannot be that institutions are admitting fewer low-income students because they can't afford to pay while news breaks that their chief executives are earning over $1 million each year.
House Education and the Workforce Committee Chair Virginia Foxx (R-NC) said Tuesday as the PROSPER Act moved out of committee, "It is not the government's responsibility to fund community college," pointing to the "community" aspect, and there is a growing sentiment that higher ed is a private good, and thus should be funded by the individuals directly benefiting. Leaders must do a better job of showcasing the public benefits of higher education, but that message may be lost amid salary-fueled claims that the Ivory Tower sits disconnected from the common man.
- Chronicle of Higher Education Executive Compensation at Private and Public Colleges
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