By Sarah Wright
Increasing Executive Pay… In The Education Sector
The issue of disproportionately high executive pay has recently been brought to the fore by political commentators and movements like Occupy Wall Street. It's not much of a secret that this is an issue in the business sector. But it might cause some surprise that executive pay has risen at a number of private colleges in the U.S. Given the current state of anxiety over the rising cost of tuition and plummeting personal resources to pay for higher education, is this really the right time for college presidents to be getting an income boost?
About the Raise
This pay raise, reported by The New York Times and The Chronicle for Higher Education, refers to the 2009 salaries of presidents of 36 private colleges. At this time, these presidents were each earning more than $1 million, which reflected a general increase in the salaries of college presidents from the previous year. At that point, the recession was already in full swing.
The study that revealed these findings, conducted by The Chronicle, also revealed that on average, the presidents of the nation's 50 wealthiest colleges saw a 75% raise in average salary in the 1999-2000 to 2009-2010 decade. This contrasts with just a 14% pay raise for professors at the same institutions, which include Drexel University, Johns Hopkins University, Northwestern University, Millsaps College and the Florida Institute of Technology.
What Does This Mean for Students?
Private colleges are, of course, free to compensate their executives as they see fit. But private colleges tend to be more expensive than public schools, and this kind of executive compensation will ultimately fall on students' shoulders in one way or another. After all, though schools do receive donations from alumni and friends, student tuition is revenue that each and every college or university relies on, public or private.
However, according to the study, the raises only reflected an average of 0.4% of the schools' overall budgets, meaning that the compensation is not necessarily disproportionate to the amount of money moving in and out of the schools. Plus, the numbers were partially skewed by the addition of benefits such as life insurance, which one college president was counted as having received due to his death during the study's time period. If executive pay is a big concern for you, and you're starting to look at colleges, this may be something that would have impact on your choice. But ultimately, the high numbers don't appear to reflect reckless or irresponsible spending on the part of the institutions included in the study.
Some people might also think that college coaches make too much money.