<p>State funding is decreasing, tuition has reached an untenable height, and schools are turning to fund-raising campaigns. At least that is the trend I have been seeing.</p>
<p>University of Cincinnati just raised a 1 BILLION dollar endowment fund. Pretty impressive. It shows strong community and alumni support, and provides income for years to come.</p>
<p>@BCEagle91 - You are assuming that every dollar donated is attributable to only the president’s tenure, which is false. Additionally, basing someone’s compensation on an ill-defined revenue stream, of which the origination of is not the primary role of the position, is not in the best interests of the institution.</p>
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<p>Base it on the delta then.</p>
<p>Who’s to say that fundraising is not the primary goal of the University President?</p>
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<p>What kind of work commitment is a state legislature job? Is it something they they often do just part time and hold other jobs, or is it a full time job on it’s own?</p>
<p>Ultimately, there’s very few college presidents in the country and the fact that they may be overpaid isn’t a huge source of waste simply because of their small numbers. Maybe Michigan could reduce the salary of the college president by 500K for instance. If that was passed onto tuition savings it’d average about $12/year for each student. Not a big deal. The University wastes far more than that on all sorts of nonsense every year.</p>
<p>I think it’s a $100, not a $100k. I have shoes that cost more than a 100 bucks.</p>
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<p>It’s possible to do it part-time but you wouldn’t be that effective in doing the job. There’s a wide variation on how responsive legislators are to constituents.</p>
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<p>Yes, it’s $100, not $100K.</p>
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<p>It was that simple once upon a time, but that’s now a badly outdated and oversimplified conception of how major public research universities work. The University of Michigan, for example, is an enterprise that spends about $5.5 billion a year, and raises revenue to match those expenditures. Toward that total, the state legislature appropriates less than $300 million annually, something on the order of 6% of the University’s overall operating budget. </p>
<p>And tuition produces only a small fraction of the rest. Of Michigan’s 27,000 undergrads, about 2/3 are in-state and 1/3 are OOS. If they were all full-pays, tuition would produce about $600 million in revenue, but you need to discount that by the amount the university pays out in need-based and merit aid from institutional funds, about $180 million, bringing net undergraduate tuition to about $420 million. Adding in all the graduate and professional school tuition brings the total net tuition to somewhere around $850 million, but that still represents only 16% of the University’s overall budget.</p>
<p>Where does the rest come from? Well, about 44% of the University’s overall budget is in its hospitals and health systems, a $2.4 billion annual enterprise that on both the expenditure and revenue side works like any other health care provider, but is necessary to allow the medical school to provide the research and medical training opportunities it provides. The health system has its own highly professional management team, but the President is the one ultimately responsible for ensuring that management team is in place and the books are balances on that huge enterprise. The University also brings in over $1 billion a year in research grants from outside sources, many of them federal but some corporate and some foundation-sponsored; but this isn’t “easy money,” these grants are highly competitive, and you need to actually do the work, which means you need to have the labs and the scientists and graduate research assistants, and in most cases you need to have all that already in place to be able to successfully compete for the grant. The University has an endowment of nearly $8 billion (7th largest for any college or university, public or private), which at a standard payout of 5% per year would produce just under $400 million in annual revenue; but that endowment needs to be carefully managed, and the President is the principal officer in charge of seeing that it continues to grow through sound management and by the addition of major gifts, which in turn don’t just fall in your lap–they need to be carefully cultivated. The University holds hundreds of patents and other intellectual property rights that bring in something on the order of $100 million a year in royalties and licensing fees. Annual giving by alumni brings in more than $100 million per year. The Athletic Department is a self-sufficient unit within the University that brings in about $140 million a year in revenue from ticket sales, parking and concessions, conference payouts (from television revenues and football bowl game revenues, which are divided equally among Big Ten conference member schools), and licensing fees on Michigan-branded sports paraphernalia, among other revenue streams. And on and on.</p>
<p>It’s pretty clear, then, that a modern major research university is a huge and extremely complex enterprise, of which the President is the CEO, responsible for seeing that all the operating units are performing to expectations, that the budgets are balanced and that revenue from all these diverse revenue streams is coming in as expected. Oh, and that the University’s 25,000 employees get their paychecks on time, and that appropriate compensation and benefits policies are in place to allow the University to attract and retain some of the most capable people in their respective fields, while still being fiscally prudent; and for seeing that the University’s 584 major buildings and 31 million square feet of space are properly equipped and maintained and upgraded and replaced on a prudent and fiscally responsible schedule, and that major donors are found for major upgrades or additions to this capital stock. The President also needs to to be a skilled politician to keep the University’s governing body, the Board of Regents, happy–along with a diverse array of often restive constituencies including state legislators, students, faculty, staff, alumni, major donors, the local community, and the state’s citizens who elect both the Board of Regents and the legislature, among others. Fundraising is only part of the President’s job, but it’s a critical part; there’s really no one else in the University who is going to close the deal on major gifts, whether it be in annual giving or gifts to endowment or gifts to fund major capital projects, without which the enterprise can’t continue to move forward.</p>
<p>From my vantage point, University of Michigan President Mary Sue Coleman earns every dime of her $918,783 compensation. In fact, she’s been an incredible bargain, and I regret that she has elected to give up the reins. She’ll be hard to replace. Not many people are cut out for a job this complex.</p>
<p>
Interesting article on exactly what a top coach can be worth:</p>
<p>
[The</a> Magic Of Nick Saban: Everyone Wants To Go To Alabama](<a href=“http://sports.yahoo.com/news/magic-nick-saban-everyone-wants-alabama-155022258.html]The”>http://sports.yahoo.com/news/magic-nick-saban-everyone-wants-alabama-155022258.html)</p>
<p>They deserve every last penny.</p>
<p>@bclintok,</p>
<p>How do the accountabilities of a state governor compare to a public university president?</p>
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<p>Why is there an automatic belief that their pay is unearned?</p>
<p>Many doctors and lawyers make more than $400K basically working on their own or with a small staff. Lots of finance people do, and heck I even know some software people that do as well.</p>
<p>But why is it wrong for a person in charge of a corporation that employs thousands of people and an annual budget in the hundreds of millions to make above $400K? </p>
<p>Do you think that someone with the talent to do so successfully doesn’t have other options?</p>
<p>I don’t necessarily think that’s too high a salary. They work a really demanding, difficult, high-pressure job that requires lots of skill and intelligence to do well. But on top of that, if they rise to president through the school’s faculty ranks, they probably spent 10-30 years working at lower-level jobs like adjunct, professor, department head, etc. all of which are notoriously underpaid at most public schools.</p>
<p>My mother works at a public university as a systems/head librarian and is well paid after probably 10 years of work. My father is a “mathematics instructor” (assistant professor?) at a community college, works long hours every day, spends his evenings and weekends preparing for his classes, and makes maybe 20-30k a year. He has only been there for a few years so hopefully his position will increase with time, but what I’m saying is that it’s hard to move up in these public schools, and anyone who makes it all the way to president has “put in their time” basically.</p>
<p>hebegebe, the president of the united states makes 400,000 a year.</p>
<p>Public university presidents, paid by taxpayers, should not make this much money. It’s preposterous. In the private sector, they are running tax exempt organizations. Should these organizations be tax exempt when their presidents are making that much money?</p>
<p>What percent of the population makes this amount of money</p>
<p>But, forget the president. Look at the other administrators and look at the cost. Professors make nothing, more and more untenured faculty, students are paying historic rates, and the administrators make more and more and more.</p>
<p>What is wrong with this picture?</p>
<p>Please explain why this is “right,” and why if it isn’t “right” for the community and country, the organizations should be tax exempt?</p>
<p>I read this as “Salaries of public college CHEFS rise, median tops $400,000”</p>
<p>I was thinking, dang, that’s a good gig!</p>
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<p>Well, the salaries of presidents and administrators are often still a very small portion of the budget of a large public university, so to tax the entirety of the school’s budget would probably do more harm than good (where good = reduced president salary, etc.)</p>
<p>And being president of a very large school is a demanding and stressful job on par with CEO of a very large company. It may seem cushy when we’re just looking at the $$ and benefits, but those people work EXTREMELY hard and often put in many, many years of low-paying work to get there, when they could probably make more money more quickly in the private/business sector…I think it’s a reasonable thing to have them be well-paid.</p>
<p>If there was no marked difference in salary between a professor and the president of the university, what incentive would anyone have to move from professor (reasonable workload/hours per week, maybe summers off, low pressure) to president (high workload, constant availability, no time off, high pressure and media spotlight)?</p>
<p>In the midst of skyrocketing student costs, it comes across as fraud that administrators are getting raises while student debt is reaching exorbitant levels. I get the sense that perhaps they aren’t doing their job right in the first place if student costs are going up. You’re trying to justify the raises by claiming that there is little incentive to be the president, however, I would be willing to bet that the prestige of president is what should draw applicants. It should be a job vested to those who truly maintain school integrity, rather than a job motivated by high earnings and perks. If ANYONE doesn’t see the problem here, you need to open your eyes and realize the purpose of a university in the first place. The fact that public universities are guilty concerns me.</p>
<p>Thank you, bclintonk, for your post above. You answered very nicely what I was trying to get at. I don’t think the UMichigan salary you referenced is outlandish at all when compared to the corresponding responsibilities in the private sector. Being a research university president, with all those arms and legs (medical centers, law schools, perhaps other graduate schools, is indeed comparable to a CEO of a large organization.</p>
<p>The $2.9 million Spanier earned last year included $1.2m in severance pay & $1.2m in deferred compensation. </p>
<p>Must be nice to have a golden parachute like that, in spite of deliberately & illegally suppressing knowledge about Sandusky sodomizing a 10 year boy in the football locker room, thereby allowing that pedophile to continue to molest young boys for many years more.</p>
<p>You all still still think his pay last year isn’t outlandish?</p>
<p>There is so much mismanagement going on in these institutions, it’s ridiculous. They are run like government organizations and yet the pay is compared to the private sector? </p>
<p>They aren’t held accountable for cost cutting and the only places they cut costs is in the important areas of teaching and professors and classrooms and labs, and yet, still we say they have tremendous responsibility? Perhaps if you couldn’t bring down costs you would lose your job in the private sector.</p>
<p>It’s ridiculous, imho, and there is NO CEO in the country who would not lose their job for this kind of fiscal mismanagement. Not one.</p>
<p>There’s practically no middle management in the private sector anymore, and the only places with these piles of receptionists and secretaries are taxpayer funded and tax exempt places. </p>
<p>If the money was going into great professors? Fine. But year after year after year, these guys give their buddies administrative jobs in the six figures with pensions nobody can afford, and call this doing a good job? No way. In the private sector, you get rid of your talent? you go out of business.</p>
<p>The mission of these places is getting to be more and more like the administration heavy public school systems, and it is the students, the children of the taxpayers, who aren’t getting what is being paid for, at all.</p>
<p>poetgrl - why should they be trying to reduce costs for students? College endowments are heavily invested in Sallie Mae, which gives student loans. The more money Sallie Mae makes, the more the endowment makes</p>
<p>[Sallie</a> Mae Profit Boosts College Endowments And Pension Funds As Students Pay More](<a href=“HuffPost - Breaking News, U.S. and World News | HuffPost”>Sallie Mae Profit Boosts College Endowments And Pension Funds As Students Pay More | HuffPost Latest News)</p>