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University President Salaries Soar Into the Millions

By Michael Janofsky
THE NEW YORK TIMES

Donald E. Ross turned Lynn University, once a nearly bankrupt two-year Catholic school for women in Boca Raton, Fla., into a thriving four-year liberal arts college. Now, as Mr. Ross nears retirement after 34 years as president, it is apparent how much the board of trustees appreciates his work.

Mr. Ross ranked first in total compensation among the nation’s private university presidents for the 2003-4 academic year with a package worth $5,042,315, according to the latest annual survey of executive compensation by The Chronicle of Higher Education. Data from 2003-4 is the most recent available for private institutions. The results were released publicly last Monday.

For the first time, the survey reported leaders of private universities earning $1 million in a single year. The four others identified were Audrey K. Doberstein, formerly of Wilmington College in Delaware ($1,370,973); E. Gordon Gee of Vanderbilt University ($1,326,786); John R. Silber of Boston University ($1,253,352); and John N. McCardell Jr., formerly of Middlebury College in Vermont ($1,213,141).

Overall, the survey said, nine presidents of private universities earned more than $900,000 each, compared with none the year before, and 50 presidents of private universities earned at least $500,000 each, a 19 percent increase over the previous year.

The upward spiral serves as the latest reminder that effective college presidents are a hot commodity and that college boards are going to unusual lengths to recruit and retain them even as tuitions soar and Congress and the Internal Revenue Service examine the finances of nonprofit institutions. The I.R.S. is looking at the rise in compensation for executives working for nonprofit institutions and is in the process of auditing about 2,000 of them, some of them university officials.

Universities defended the payment packages as crucial to their success, and Raymond D. Cotton, a lawyer who specializes in contract negotiations for college presidents, said high compensation for those at the top reflected a growing demand for a shrinking population of qualified people.

The job of running a large university is growing in complexity, Mr. Cotton said, and the problems are even more demanding at public universities, where the president has to raise money from donors as well as from the state legislature.

Further, a number of well-known and highly paid presidents have retired in recent years, putting pressure on their schools to find comparable replacements.

“There’s an imbalance in the supply and demand in the marketplace,” Mr. Cotton said. “There is a growing demand for people who can do the job well but a diminished supply because of baby boomer retirements. What all universities are trying to do is find a successor who has been someplace else as president.”

Pressures notwithstanding, critics of the trend say lofty compensation packages have spawned a new ultra class within academia that grows steadily disconnected from the masses and undermines public confidence.

“We’ve created a cadre of hired guns whose economic interests are totally divorced from students and faculty,” said Patrick M. Callan, president of the National Center for Public Policy and Higher Education, a nonprofit group based in San Jose, Calif. “It creates a real problem for leadership, and does nothing to help higher education.”

Presidents of public universities generally earn much less than their private counterparts. But the survey also showed a jump in the number of public university presidents earning more than $500,000, 23 for the current academic year, from 17 in 2003-4. The latest group is led by Mary Sue Coleman of the University of Michigan ($724,604), Mark G. Yudof of the University of Texas ($693,677) and Carl V. Patton of Georgia State University ($688,406).

David P. Roselle, president of the University of Delaware, was included on the list as ranking second, but his total compensation of $720,522 is based on the 2003-4 academic year.

For the first time, The Chronicle extended its survey of pay and benefits to include colleges that specialize in one field, and the top 10 presidents all made more than $500,000 for the 2003–4 academic year. Two cleared $1 million: Samuel H. Weese ($1,725,376), former president of the American College in Pennsylvania, which focuses almost exclusively on financial services; and Paula S. Wallace ($1,068,726) of the Savannah College of Art and Design.

The Chronicle’s survey reflected responses from 589 private institutions, 139 public schools and 118 specialty schools.

Concerned that Mr. Ross’s compensation package would draw criticism, Lynn University’s board chairwoman, Christine E. Lynn, whose family has been a major benefactor, wrote to students, faculty and donors last week to say that $4.5 million of the total represented accrued retirement benefits, based on Mr. Ross’s years of service.

Other universities portrayed the high compensation as an effort to stay competitive. Julie Peterson, a spokeswoman for the University of Michigan, said Ms. Coleman was wooed from the University of Iowa in 2002 with a package that included an annual base salary of $475,000 but also deferred pay of $500,000 as a retention bonus and $375,000 in additional base pay if she stayed at Michigan for five years.

Mr. Yudof, who is in his third year leading the University of Texas system, is limited by statute to a base salary of $70,231, according to the survey. But Michael Warden, a system spokesman, said Texas remained competitive by paying him an additional $615,000 through two major endowments.

By Michael Janofsky
THE NEW YORK TIMES

Donald E. Ross turned Lynn University, once a nearly bankrupt two-year Catholic school for women in Boca Raton, Fla., into a thriving four-year liberal arts college. Now, as Mr. Ross nears retirement after 34 years as president, it is apparent how much the board of trustees appreciates his work.

Mr. Ross ranked first in total compensation among the nation’s private university presidents for the 2003-4 academic year with a package worth $5,042,315, according to the latest annual survey of executive compensation by The Chronicle of Higher Education. Data from 2003-4 is the most recent available for private institutions. The results were released publicly last Monday.

For the first time, the survey reported leaders of private universities earning $1 million in a single year. The four others identified were Audrey K. Doberstein, formerly of Wilmington College in Delaware ($1,370,973); E. Gordon Gee of Vanderbilt University ($1,326,786); John R. Silber of Boston University ($1,253,352); and John N. McCardell Jr., formerly of Middlebury College in Vermont ($1,213,141).

Overall, the survey said, nine presidents of private universities earned more than $900,000 each, compared with none the year before, and 50 presidents of private universities earned at least $500,000 each, a 19 percent increase over the previous year.

The upward spiral serves as the latest reminder that effective college presidents are a hot commodity and that college boards are going to unusual lengths to recruit and retain them even as tuitions soar and Congress and the Internal Revenue Service examine the finances of nonprofit institutions. The I.R.S. is looking at the rise in compensation for executives working for nonprofit institutions and is in the process of auditing about 2,000 of them, some of them university officials.

Universities defended the payment packages as crucial to their success, and Raymond D. Cotton, a lawyer who specializes in contract negotiations for college presidents, said high compensation for those at the top reflected a growing demand for a shrinking population of qualified people.

The job of running a large university is growing in complexity, Mr. Cotton said, and the problems are even more demanding at public universities, where the president has to raise money from donors as well as from the state legislature.

Further, a number of well-known and highly paid presidents have retired in recent years, putting pressure on their schools to find comparable replacements.

“There’s an imbalance in the supply and demand in the marketplace,” Mr. Cotton said. “There is a growing demand for people who can do the job well but a diminished supply because of baby boomer retirements. What all universities are trying to do is find a successor who has been someplace else as president.”

Pressures notwithstanding, critics of the trend say lofty compensation packages have spawned a new ultra class within academia that grows steadily disconnected from the masses and undermines public confidence.

“We’ve created a cadre of hired guns whose economic interests are totally divorced from students and faculty,” said Patrick M. Callan, president of the National Center for Public Policy and Higher Education, a nonprofit group based in San Jose, Calif. “It creates a real problem for leadership, and does nothing to help higher education.”

Presidents of public universities generally earn much less than their private counterparts. But the survey also showed a jump in the number of public university presidents earning more than $500,000, 23 for the current academic year, from 17 in 2003-4. The latest group is led by Mary Sue Coleman of the University of Michigan ($724,604), Mark G. Yudof of the University of Texas ($693,677) and Carl V. Patton of Georgia State University ($688,406).

David P. Roselle, president of the University of Delaware, was included on the list as ranking second, but his total compensation of $720,522 is based on the 2003-4 academic year.

For the first time, The Chronicle extended its survey of pay and benefits to include colleges that specialize in one field, and the top 10 presidents all made more than $500,000 for the 2003–4 academic year. Two cleared $1 million: Samuel H. Weese ($1,725,376), former president of the American College in Pennsylvania, which focuses almost exclusively on financial services; and Paula S. Wallace ($1,068,726) of the Savannah College of Art and Design.

The Chronicle’s survey reflected responses from 589 private institutions, 139 public schools and 118 specialty schools.

Concerned that Mr. Ross’s compensation package would draw criticism, Lynn University’s board chairwoman, Christine E. Lynn, whose family has been a major benefactor, wrote to students, faculty and donors last week to say that $4.5 million of the total represented accrued retirement benefits, based on Mr. Ross’s years of service.

Other universities portrayed the high compensation as an effort to stay competitive. Julie Peterson, a spokeswoman for the University of Michigan, said Ms. Coleman was wooed from the University of Iowa in 2002 with a package that included an annual base salary of $475,000 but also deferred pay of $500,000 as a retention bonus and $375,000 in additional base pay if she stayed at Michigan for five years.

Mr. Yudof, who is in his third year leading the University of Texas system, is limited by statute to a base salary of $70,231, according to the survey. But Michael Warden, a system spokesman, said Texas remained competitive by paying him an additional $615,000 through two major endowments.

Some pay packages and spending practices of university presidents have become controversial in recent years. At American University, a private institution of 10,000 students in Washington, Benjamin Ladner, its president, recently resigned amid accusations that he spent large amounts of university money for his personal use. The board gave Mr. Ladner a $3.7 million severance package.