Enormous payouts to college executives

While politicians and the public cry with outrage at executives' huge compensation packages in private, for-profit corporations, executive pay at non-profit universities and colleges have been shooting up.

The Chronicle of Higher Education's report features Amy Gutman, president of the public University of Pennsylvannia (Ben Franklin's baby). She got a 40% pay increase over the previous year, to a total compensation package of $1,088,786 in 2006-7.

And she's not alone.

"Fifteen presidents of public research universities took home at least $700,000 in 2007-2008, up from eight in last year's survey, and nearly one-third now earn over $500,000, according to the annual Chronicle of Higher Education survey out Monday [November 17th]." says the Chicago Tribune .

Some people are outraged that the executives get such high pay while students can't get financing and non-tenured faculty work hard at low pay.

Below is the Chronicle's table, comparing public and private, non-profit and for-profit CEO pay. (I wonder about Illinois state politicians' official pay versus their "take home" in our corrupt state.) I notice that no private college CEO is listed.

"Chief Executive Pay in One State

Here we compare the annual compensation of Richard Herman, chancellor of the University of Illinois at Urbana-Champaign, who makes close to the median compensation of $427,400 for a public research university president, with the compensation of other chief executives in the state.

Patricia A. Woertz, chairman and CEO, Archer Daniels Midland, Decatur, Ill.

$17.5-million

Richard Herman, chancellor, University of Illinois at Urbana-Champaign

$427,500

Neil J. Nicoll, CEO, YMCA of the USA, Chicago

$412,788

Walter Milton Jr., superintendent, Springfield (Ill.) Public Schools

$261,314

Rod R. Blagojevich, governor of Illinois

$177,412

Timothy E. McGuire, president, National Merit Scholarship Corp., Evanston, Ill.

$143,500

National Median Salaries

Accountant	$54,630
Architect	$64,150
Civil engineer	$68,600
Corporate lawyer	$128,610
Member, U.S. House of Representatives or U.S. Senate	$169,300
Chief Justice, U.S. Supreme Court	$217,400
Anesthesiologist	$321,686
Nonprofit CEO	$326,500
President, private research university	$434,369
Corporate CEO (large companies)	$1,030,000
SOURCES: The Bureau of Labor Statistics Occupational Outlook Handbook, 2008-9 edition; Securities and Exchange Commission proxy filings; the office of Illinois Gov. Rod R. Blagojevich; The Chronicle of Philanthropy; the federal judiciary; 2007 Equilar Survey of Corporate Chief Executives; Chronicle reporting"

What needs to be asked is: what is a public-university president producing to warrant such pay? Highly educated and productive graduates? Large-revenues from deals with private firms for university research?

I can't claim to know how such pay rates should be determined, but if this level of pay is what the market will bear for university presidents, I wonder if the scramble for the millions of government-financed college students these last 10 years has anything to do with it.