May 7, 2010 in City

Presidents’ salaries put the high in higher ed

By The Spokesman-Review
 

Is it time for the University of Washington president to make a million bucks a year?

You may say no. You may say hell no. You may say that it’s no time to ratchet up the already humongous salary for the top Dawg, given the various budgetary brutalities inflicted upon our state’s colleges and universities lately.

But the people who make this decision won’t really be listening to you. They’ll be listening to the market.

And this market only ever says one thing: More.

Absurd as it sounds, it will be a near-miracle if the next president at UW doesn’t make more money than the departing Mark Emmert, who is the second-best-paid public-college president in the land, at more than $900,000 a year.

After all, this is the chief way that salaries at the top have gotten so large to begin with. It’s not just the annual raises, though those can be plenty big. It’s what happens nearly every time a university honcho is replaced: the value of the position suddenly skyrockets.

Take Washington State University’s new athletic director, Bill Moos. It took an increase of merely 36 percent in base salary over the last guy to bring him in. The last guy, Jim Sterk, went to San Diego State, which is paying him 16 percent more than his predecessor.

The market always says more, at least for these jobs. It never seems to say: Hey, colleges, why don’t you pay those non-tenured instructors – who are teaching most of your freshmen – a decent wage? It never seems to say: How about not piling on students and families with tuition increases of 28 percent in two years?

Instead, there is a constant game of musical chairs. The new president at the University of Idaho, Duane Nellis, came on board for an increase of 15 percent over his predecessor, Tim White. White went to the University of California Riverside as chancellor, making 14 percent more than his predecessor, who went to Purdue to pull down – well, actually about the same as her predecessor.

That’s just crazy, Purdue.

It says something about the state of these salaries that when the last national survey found that public school presidents had seen raises of a mere 2.3 percent in 2007-08, they were described as “stagnant” or “flat.” That’s because in the five years previous, that average went up 36 percent.

How can it be that the value of presidents has come to be seen as so very, very high, while the value of everyone else has not? One clue might be found in the boards of regents.

Regents are the ostensible authorities that govern universities. They sign off on the major decisions – sometime more and sometimes less than a rubber stamp – and they may have no more important function than hiring and paying presidents.

And who are these regents? In large part, they are CEOs, founders of companies, senior executives. They are honchos. Of the 10 regents on the UW board, eight fit this bill, including the chief executive officers of Costco and REI, plus a former Starbucks CEO. The makeup of the board at WSU is similar (including Betsy Cowles, chairwoman of the company that owns this newspaper).

It’s only natural that they place a high value on the big office, given that they occupy big offices themselves. If regents were plumbers, the market might be telling them to jack up salaries for the maintenance staff.

This upward drift is happening everywhere. The average CEO in 2008 earned 319 times the salary of his or her lowest-paid employee. Thirty years ago, that differential was 42, according to the Institute for Public Policy, a liberal think-tank.

Someday, somewhere, a college is going to take a stand. Go all Purdue on someone’s fanny, and pay the next prez merely as much as they paid the last one. It won’t fix the budget. It will just fix the message.

Presidents are valuable, no doubt, and deserving of their singular status on the pay scale. Increasingly, they are fundraisers-in-chief for a system being starved of public money, and that is no small responsibility. At WSU, President Elson Floyd has set fundraising records during a recession. Emmert oversaw a similar flourish of donations at the UW.

So maybe I’m wrong about all this, and the market is right. Whatever the case, it’s pretty clear who the regents will be listening to.

Herb Simon is chairman of the UW board of regents, and a partner in Simon Johnson LLC, a development firm. He said he is still in the process of forming a search committee to replace Emmert, who has, by most accounts, been very good at his job.

“The issue of salary is not even on our agenda at this point,” he said. “Our goal is to find the best and brightest. … We are going to pay what the market requires to get the best and brightest.”

Shawn Vestal can be reached at (509) 459-5431 or shawnv@spokesman.com.

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