As sure as the arrival of fall mid-term grades, college presidential salaries and benefits undergo regular annual public scrutiny, with publications that monitor trends in higher education releasing reports on executive compensation.
In its yearly survey, The Chonicle of Higher Education reported that in 2004, a few college and university leaders drew annual salaries and benefits that approached $1 million - not compensation of Enron or Tyco proportions, by any stretch, but nonetheless prompting analogies between higher education leaders and corporate CEOs.
While handfuls of colleges paid their leaders nearly $500,000 in total compensation, more than 50 college presidents received roughly $300,000 at that time.
Those numbers encompass non-salary benefits ranging from homes or housing allowances and cars to personal staff, and often include insurance policies, club or association memberships, tuition or travel accounts for children and spouses, as well as expense accounts.
With those numbers in mind, total compensation for Lisa Marsh Ryerson, the Wells College president, seems par for the course.
In fiscal year 2005, Ryerson earned $292, 847 - competitive with her colleagues at larger, more comprehensive area institutions. Keuka College, Ithaca College and even Hobart and William Smith Colleges paid their leaders between $300,000-$400,000 in salaries and benefits that fiscal year.
Still, a Chronicle editorial asked, “How much is too much to pay?”
Yet some in the field say that what pundits and the public perceive as “too much” is really a drop in the bucket compared to schools' overall budgets. Salaries and benefits - particularly non-salary compensation - are worthy investments college boards make in leaders hired to make endowments grow. These leaders, say insiders, bear increased responsibilities that validate their earnings.
The American Council on Education's 2002 survey, “The American College President,” stated budgeting, fundraising, and maintaining relationships with legislators, faculty governing boards among the growing demands college presidents reported facing.
“A president always, always, always, represents an institution wherever he or she goes,” said Raymond D. Cotton, a Washington, D.C. attorney who specializes in presidential compensation.
Eschewing the business analogue, Cotton pointed to aspects of heading an institution - like shared governance between boards and presidents, as well as sheer pay scales - to highlight marked differences between colleges and corporations. He said the private sector allows a wide range of issues to which boards and their leaders can agree, while public agreements are defined by statues, such as the regulations around terminating a president's contract - as happened with former Harvard University President Lawrence Summers, who was dismissed last year after critics accused him of “using genetics to explain sexism” in academia.
“Over the course of time, there are always relationships in business that don't work out. And non-profits in general do not like to find themselves in court,” said Cotton. Relationships between college presidents and their boards have become more formalized over the years, and contracts today run 10-15 pages long.
Cotton claimed to have negotiated more presidential contracts than anyone in the country - having worked on 180 college institutions, large and small, in New York alone. Using terms like “marketplace” and “supply and demand” he drew correlations between presidential earnings and increased competition between schools for a smaller pool of candidates.
In short, boards governing larger institutions - boards comprised primarily of people from the business world - are willing to do whatever it takes to lure candidates with potential to grow endowments, and keep them there. Ideally, those candidates come with experience leading smaller schools - as provosts or presidents - primed for elevation.
“There's a huge advantage to a board hiring someone who's made a mistake at a junior level and won't make them again as president,” Cotton said.
Peggy Williams, the president of Ithaca College, illustrates Cotton's point. Prior to assuming the presidency there some 10 years ago, Williams spent eight years at the helm of Lyndon State College, a roughly 1400 student campus on the northern border of Vermont and New Hampshire. Cotton said he was familiar with her contract, and ventured to guess that between 200-300 candidates had initially vied for the position at Ithaca. Within six months to a year, the search winnowed down their choices , with the help of a recruitment firm, to a handful of people.
When you get down to the end, to those two, three, four key people, those are the people (institutions) are competing for,“ he said.
Ithaca College, whose undergraduate enrollment is approximately 6,100 students, paid Williams, $321,305 in fiscal year 2005. Its endowments are north of $100 million, Cotton said. Several years ago, the school undertook a multi-year fundraising campaign to add housing and build a new business school. Last year, Ithaca began offering a doctoral program in physical therapy, in addition to its baccalaureate and masters degree programs.
Public relations staff for the school emphasized that the $39,601 listed under “expense account and other allowances” on the federal 990 tax form included the rental value of the home where she resides. New reporting guidelines require auditors to report the fair market rental value of presidential homes like Williams'.
Markets and marketplaces, though, are not limited to houses and extend to the shrinking pool of viable candidates for college presidencies - a trend Cotton and his colleagues, along with the Chronicle and other publications, are monitoring with growing concern.
“The American College President” survey found that the average age or presidents increased from 1986 and that in 2001, most college leaders were around 57 years old - baby boomers getting ready to retire. Five years later, governing boards are looking to recruiters to help them fill projected vacancies. The same survey found that search consultants were used to recruit more than half of recently hired presidents in 2001, a trend Cotton said exerts “upward pressure” on presidential compensation packages - as recruiters demand fees generally equivalent to a third of a new recruit's salary - and one he did not see leveling off. “That has an effect on marketplace as a whole,” he said.
When Cotton first started 1981, recruitment firms were non-existent, as were presidential contracts.
“Most (appointments) were handshakes, a few were one page letters from the board to a president that said, 'Your salary is blank, you get this and that. See you next year.' There was no such thing as bonuses,” he said. And now?
“If the institution wants to maximize its income from its investments, why should it care if it pays $300,000 or $400,000 for someone who will make a difference in endowments,” Cotton said.
Staff writer Olivia Goldberg can be reached at 253-5311 ext. 235 or at olivia.goldberg@lee.net
While handfuls of colleges paid their leaders nearly $500,000 in total compensation, more than 50 college presidents received roughly $300,000 at that time.
Those numbers encompass non-salary benefits ranging from homes or housing allowances and cars to personal staff, and often include insurance policies, club or association memberships, tuition or travel accounts for children and spouses, as well as expense accounts.
With those numbers in mind, total compensation for Lisa Marsh Ryerson, the Wells College president, seems par for the course.
In fiscal year 2005, Ryerson earned $292, 847 - competitive with her colleagues at larger, more comprehensive area institutions. Keuka College, Ithaca College and even Hobart and William Smith Colleges paid their leaders between $300,000-$400,000 in salaries and benefits that fiscal year.
Still, a Chronicle editorial asked, “How much is too much to pay?”
Yet some in the field say that what pundits and the public perceive as “too much” is really a drop in the bucket compared to schools' overall budgets. Salaries and benefits - particularly non-salary compensation - are worthy investments college boards make in leaders hired to make endowments grow. These leaders, say insiders, bear increased responsibilities that validate their earnings.
The American Council on Education's 2002 survey, “The American College President,” stated budgeting, fundraising, and maintaining relationships with legislators, faculty governing boards among the growing demands college presidents reported facing.
“A president always, always, always, represents an institution wherever he or she goes,” said Raymond D. Cotton, a Washington, D.C. attorney who specializes in presidential compensation.
Eschewing the business analogue, Cotton pointed to aspects of heading an institution - like shared governance between boards and presidents, as well as sheer pay scales - to highlight marked differences between colleges and corporations. He said the private sector allows a wide range of issues to which boards and their leaders can agree, while public agreements are defined by statues, such as the regulations around terminating a president's contract - as happened with former Harvard University President Lawrence Summers, who was dismissed last year after critics accused him of “using genetics to explain sexism” in academia.
“Over the course of time, there are always relationships in business that don't work out. And non-profits in general do not like to find themselves in court,” said Cotton. Relationships between college presidents and their boards have become more formalized over the years, and contracts today run 10-15 pages long.
Cotton claimed to have negotiated more presidential contracts than anyone in the country - having worked on 180 college institutions, large and small, in New York alone. Using terms like “marketplace” and “supply and demand” he drew correlations between presidential earnings and increased competition between schools for a smaller pool of candidates.
In short, boards governing larger institutions - boards comprised primarily of people from the business world - are willing to do whatever it takes to lure candidates with potential to grow endowments, and keep them there. Ideally, those candidates come with experience leading smaller schools - as provosts or presidents - primed for elevation.
“There's a huge advantage to a board hiring someone who's made a mistake at a junior level and won't make them again as president,” Cotton said.
Peggy Williams, the president of Ithaca College, illustrates Cotton's point. Prior to assuming the presidency there some 10 years ago, Williams spent eight years at the helm of Lyndon State College, a roughly 1400 student campus on the northern border of Vermont and New Hampshire. Cotton said he was familiar with her contract, and ventured to guess that between 200-300 candidates had initially vied for the position at Ithaca. Within six months to a year, the search winnowed down their choices , with the help of a recruitment firm, to a handful of people.
When you get down to the end, to those two, three, four key people, those are the people (institutions) are competing for,“ he said.
Ithaca College, whose undergraduate enrollment is approximately 6,100 students, paid Williams, $321,305 in fiscal year 2005. Its endowments are north of $100 million, Cotton said. Several years ago, the school undertook a multi-year fundraising campaign to add housing and build a new business school. Last year, Ithaca began offering a doctoral program in physical therapy, in addition to its baccalaureate and masters degree programs.
Public relations staff for the school emphasized that the $39,601 listed under “expense account and other allowances” on the federal 990 tax form included the rental value of the home where she resides. New reporting guidelines require auditors to report the fair market rental value of presidential homes like Williams'.
Markets and marketplaces, though, are not limited to houses and extend to the shrinking pool of viable candidates for college presidencies - a trend Cotton and his colleagues, along with the Chronicle and other publications, are monitoring with growing concern.
“The American College President” survey found that the average age or presidents increased from 1986 and that in 2001, most college leaders were around 57 years old - baby boomers getting ready to retire. Five years later, governing boards are looking to recruiters to help them fill projected vacancies. The same survey found that search consultants were used to recruit more than half of recently hired presidents in 2001, a trend Cotton said exerts “upward pressure” on presidential compensation packages - as recruiters demand fees generally equivalent to a third of a new recruit's salary - and one he did not see leveling off. “That has an effect on marketplace as a whole,” he said.
When Cotton first started 1981, recruitment firms were non-existent, as were presidential contracts.
“Most (appointments) were handshakes, a few were one page letters from the board to a president that said, 'Your salary is blank, you get this and that. See you next year.' There was no such thing as bonuses,” he said. And now?
“If the institution wants to maximize its income from its investments, why should it care if it pays $300,000 or $400,000 for someone who will make a difference in endowments,” Cotton said.
Staff writer Olivia Goldberg can be reached at 253-5311 ext. 235 or at olivia.goldberg@lee.net
