Millionaire College Presidents Raise Eyebrows

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It isn’t too difficult for people to become a millionaire these days even in a tough economy where the value of stocks, bonds and real estate have been greatly devalued. Still, it is rather shocking to learn that as many as 23 private college presidents are being compensated to the tune of one million dollars or more annually, receiving corporate level pay for educational work.

Big Bucks

College costs continue to rise as do the compensation packages for university presidents.

College costs continue to rise as do the compensation packages for university presidents.

The Chronicle of Higher Education recently completed and published its annual survey of executive compensation revealing that private college presidents receive a median compensation package of $627,750 for the 2007-8 fiscal year, a 5.5% increase from the previous year. Leading the way in compensation is Rensselaer Polytechnic Institute (RIT) president Shirley Ann Jackson who was paid $1,598,247. That figure includes salary and a benefits package.

So, why are some college presidents getting paid so well?

Likely, that has everything to do with the quality of people who are being asked to head up these schools, many of whom have come from private industry where their compensation packages are generous. Ms. Jackson, for example, is a physicist and former chair of the federal Nuclear Regulatory Commission, and has been at the RIT helm for the past ten years. The governing boards of these schools set policy on how much their chief executive gets paid and because they have to compete with the business world, they must compensate accordingly.

College Cutbacks

High pay, however, upsets a lot of people. Over the years, presidential pay has increased faster than the rate of inflation and at a pace above tuition increases. With many schools cutting back on programs, increasing class sizes, and relying on adjunct faculty to a greater degree, generous pay packages are open to scrutiny.

Of note, the Chronicle’s information was culled from federal tax documents for the 2007-8 fiscal year, a period just prior to the current economic malaise. Lately, the majority of institutions have tempered, or frozen, salary increases.

The Chronicle’s most recent survey was of only of private university presidents, with previous surveys taking a look at private, public or both. Last year’s survey revealed that public university presidents were receiving even higher increases, revealing an 11% gain in one year.

Higher Tuition

Perhaps most frustrating to families is that the number of schools now charging more than $50,000 annually for tuition has surged from 5 to 58 in just one year. Colleges and universities continue to increase their educational costs, forcing prospective students to look elsewhere including state in-state public universities whose costs are far lower than what most private schools charge.

Source: Chronicle of Higher Education

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