Shawn Vestal: Million-dollar salary for WSU’s Schulz not what it seems

In a time of financial sacrifice and falling enrollments, the latest news about Washington State University President Kirk Schulz was bound to turn heads.

His official base pay, as listed by the state Office of Financial Management, leaped 52% from $625,000 to $952,600 between 2019 and 2020. He was ranked in August at No. 11 on Chronicle of Higher Education’s list of the highest-paid presidents of public colleges, a ranking that put his total compensation at just over $1 million, which would make him one of 16 presidential millionaires at public universities.

And all of that came following Schulz’s announcements in recent years that he was taking pay cuts, foregoing retention raises and returning two cars that had been provided for his use – decisions he made in light of the university’s ongoing efforts to cut budgets.

What in the world?

It seemed like a sign of outrageous hypocrisy.

But this is not, for once, an instance of skyrocketing administrative salaries, and the two seemingly contradictory pictures do, in fact, add up. It’s a ramification left behind by WSU’s former decision to buy a downtown Seattle condo for the president’s use, the university’s later decision to sell that condo – and a huge tax bill that bounced back on Schulz from all that.

“This was pre-Kirk,” said Marty Dickinson, president of the WSU Board of Regents. “This wasn’t really on Kirk.”

Schulz’s million-dollar year was actually the product of a one-time payment intended to help him cover that tax liability of almost $356,000. Next year, his base salary returns to the same level where it’s been for several years now: $625,000.

Furthermore, Schulz did take cuts in pay – 5% in each of the past two years off his base salary – and did forgo two annual retention bonuses of $25,000 each, she said.

“He definitely took a pay cut,” she said. “He was one of the first university presidents to step forward” and do so.

The 2004 purchase of the Seattle condo, at Bell Street and First Avenue downtown, preceded both Schulz and his predecessor, Elson Floyd, who relied on that condo and a Seattle car in visits to the West Side. Floyd, a popular and ambitious figure whose tenure was marked by great achievement and a pile of debt, died in 2015. He put WSU on the road toward opening a medical school and went all-in on deficit spending in athletics – and when Schulz took over, there was a major budget shortfall.

Schulz instigated a campuswide effort to make cuts in each department (not counting football, naturally) and eliminated a $30 million budget deficit; the pandemic brought another wave of cost-cutting efforts at the school.

The Seattle condo and car were purchased as part of an effort to stake a larger WSU flag on the West Side, in order to bolster fundraising and appeal to potential students, and the argument was that the president would need to be over there enough to justify the expense. When Schulz took over, he neither wanted nor felt he needed these amenities, and he didn’t use them, said Phil Weiler, WSU’s vice president for marketing and communications.

In February of this year, the regents sold the Seattle property, which it purchased for $825,000, for $920,000.

“From the Board of Regents’ standpoint, having a condo in downtown Seattle didn’t make a ton of sense,” Dickinson said.

The condo and car should have been considered taxable fringe benefits, though Schulz had not paid taxes on them since his hiring in 2016.

The Regents voted to cover the unpaid taxes and liability, which seems only fair. That payment of $355,748, in addition to Schulz’s base salary of almost $597,000 – his actual base of $625,000 minus the 5% voluntary cut – were the main factors that landed him at No.11 on that Chronicle of Higher Education list. (It also included fringe benefits related to housing, travel, etc.)

That list is, in many ways, a chronicle of excess and the arms race of rising administrative salaries. Fifteen college presidents at taxpayer-funded institutions other than Schulz were above $1 million in total compensation. Another 20 earned between $800,000 and $999,000, and another 80 made between $500,000 and $799,000.

Universities are good at justifying increasing expenses in administrative salaries by playing catch-up-with-the-Joneses – the same justification for never reining in football costs – and the ranks of the presidential millionaires at public schools will doubtlessly swell.

But Schulz is not in those ranks, and the story of his paychecks is actually quite different. Having foregone his retention raises, his base pay is the same that Floyd earned in his final year. Schulz’s total compensation in the year preceding the tax payments – base salary plus everything else – was $710,674.

That number would put him at 60th, not 11th, on the Chronicle of Higher Ed list.

Under his current agreement, next year’s salary will be the same.