The Absurdity of University Presidents' Compensation

If you aren’t part of the daily mess that is higher education, you may not know much about how much college administrators are paid.

Whatever you think it is, add 50%. Or more.

I once spoke to some parents who were considering sending their child to a particular college. I asked them what they thought the school president earned. They guessed $100,000 per year. I laughed. They upped their guess to $200,000.

“The president of that college makes over $600,000 per year,” I said with a smile.

As they picked their jaws up off the floor, they could only mutter, “Is that why the school is so expensive?”

Mind you, this school was small and private with almost no name recognition (even in the city in which it’s located) and consistently has financial troubles and limited educational resources for students. And most of its faculty only make around $50,000 in salary.

By the way, this particular president is not a PhD-level scholar and had no prior experience in academia when he was hired. Oh, and he recently paid off a university employee through an NDA. So, there’s that.

Yet, this president was deemed so valuable to the institution that he was, supposedly, worth this exorbitant pay.

But big salaries for administrators while others in education struggle is a pretty standard story.

Just the other day, the president at the University of Michigan, Santa Ono, received a contract renewal that is one of the most lucrative in the country. He will earn approximately $3 million per year through 2032. His new contract includes a 26% raise from his previous high salary. Do you know any teachers that have recently earned a 26% raise? How about custodians? Have tuition fees for students been cut by 26% recently?

For regular folks, a 26% pay increase would literally be life changing. For academic administrators, it’s just part of the normal negotiation process.

Ono will also receive annual bonuses and other perks.

Why is he receiving such massive compensation?

A board member said, “To retain a president who can effectively lead, we need compensation that keeps them at our university.”

At least he has a PhD and a notable background in academic research. And no NDA’s that we know about.

But isn’t it interesting that such an argument is applied to administrators but rarely to teachers? When teachers ask for higher pay, the response is, “We don’t have it in the budget. Feel free to go somewhere else.” Teachers are expected to be in education for the love of the students, for the love of research and their field, for the love of “the life of the mind.”

Not administrators.

They are hired guns, able to be bought by the highest bidder. And they are willing to walk if their demands are not met.

Loyalty to the kids? Ridiculous. There’s a reason they get out of the classroom so quickly in their careers, if they were ever there to begin with. (At the school I mentioned at the beginning, the school president was so rarely seen on campus, aside from in his suite at football games, that the students made a sort of “Where’s Waldo” social media game out of it. His pettiness at being mocked in this way led him to threatening to sue students participating in this game. Think of that what you will.)

Loyalty to research or their field? Yeah, right. Again, there’s a reason they leave the academic side of academics. Who needs all that pesky reading and writing when there are cocktail parties to attend?

Passion for a life of the mind? Ha! There’s a reason they demand massive penthouse offices, expense accounts, and perks for their spouses. It ain’t for their minds.

Why are students (through their high tuition payments) and professors (through their low pay and devotion to teaching) supposed to make sacrifices, to do their part to invest in themselves and in education as a cultural institution, but college presidents are asked to make no such sacrifices? They are, quite literally, rewarded for not making sacrifices.

Speaking of sacrifices, the compensation problem is even worse at Christian universities, where presidents and boards often give conflicting accounts for a school’s success.

One will repeatedly hear how “God brought these students here,” or, “God has blessed this campus,” or something similar that expresses how the school’s prosperity has a divine origin. “We would have had to close our doors if it weren’t for God watching over us.”

Then, out of the other side of their mouths, presidents and boards will tout the influence of the leadership as the cause for the school’s performance. The president’s public persona, fundraising connections, or leadership during crisis is really the reason for a new contract and hefty raise.

As with Ono at the public university, they must be incentivized to stay through competitive compensation.

So, which is it? Is it God’s work or the president’s effectiveness? If it’s God, then the president certainly doesn’t need that massive salary. After all, God will provide. If it’s the president, then they need to stop talking about their faith as the key influence.

“God is the foundation of our school. But actually, our school would completely fail if this guy weren’t the boss and making ten times what the faculty make.”

You can’t have it both ways.

Another problem with executive compensation is how it is distributed. Rarely is this information made public so parents, students, and members of the community can see where their money is going. Why exactly did he or she get that giant bonus? Why was it tax-protected? Why does he or she get certain benefits that no other employee of the school gets?

These are legitimate questions to ask when families fork over hundreds of thousands of dollars to get a diploma.

And it’s not uncommon for leaders to pursue bonus goals over what is best for students, professors, or the reputation of the school. For example, a president might receive a bonus for enrollment growth. However, enrollment growth can be accomplished in ways that might actually harm student learning, the classroom experience, academic programs, the social environment, the mission of the school, or other factors in the stability of a university.

Since presidents rarely seek input from faculty or students, they have no reason to care about the long-term consequences of their immediate personal financial incentives.

“Your philosophy classes are a disaster because our new students can’t read? Not my problem! I just got a $100,000 bonus from the board for lowering admission standards and bringing on 75 new tuition-paying football players who will never actually graduate! Woo-hoo!”

As in most of life—and universities are not the special places we assume them to be—money is often all that matters.

The parents’ concern I mentioned previously isn’t the full reason colleges have become so expensive. There are many factors that go into determining that ever-increasing tuition price tag. But let’s not assume that the president’s salary isn’t at least part of the problem.

If students and teachers—you know, the ones who are actually part of the education process—are really the most important parts of a school, then that is where the money, if there is any, should be going.

How many important faculty members could be hired if Ono’s salary were trimmed from $3 million down to just $200,000? Seems reasonable—after all, the cost of living in Ann Arbor, Michigan, isn’t exactly Manhattan or Malibu. How much more learning, mentorship, research, and community outreach could take place if $2.8 million per year were spent in those areas instead of administration?

Why stop at $200,000? How much more goodwill could be garnered among faculty and staff if the president said, “I’m no more important than the psychology professor or the admissions counselor or the head of the maintenance department, so my salary should be comparable to theirs. We are all in this together to help young people become educated, successful citizens.” That would be a president everyone would support.

Public trust in universities is declining right alongside enrollments. And college presidents deserve some of the blame.

If universities are to be salvaged, the presidents need to take the lead by humbling themselves. They need to make the same sacrifices everyone else is making. They need to remember that education is not about them.

Otherwise, these wealthy presidents soon won’t have anything to preside over.

But something tells me they aren’t too worried about that. After all, they have compensation clauses in their contracts for that too.