58 College Presidents Now Earn in Excess of $1 Million!

Dear Commons Community,

Pay packages for private college presidents have continued to rise, as the number earning more than $1 million increased in 2015 and average compensation rose 9 percent.   In 2015, the year with the most recent data available, 58 presidents earned a compensation package worth more than $1 million, up from 39 presidents in 2014, according to the annual ranking of pay at 500 private colleges compiled by The Chronicle of Higher Education.

At the head of the list was Nathan O. Hatch, the president of Wake Forest University, whose earnings of $4 million included a lump sum of nearly $3 million that he earned upon completing 10 years in the office.

In a statement, Wake Forest said Dr. Hatch’s compensation without those earnings — a base salary of $839,944 — was in line with similar institutions. Donna Boswell, the chair of the board of trustees, said Dr. Hatch’s leadership was “exceptional.”

Colleges frequently cite competitive pressures in setting the pay of presidents, who sometimes come from, or are recruited for, the corporate executive suite. They also note increasing demands on college leaders to raise money for their schools.

By that same token, these pay packages could “serve to feed a growing political argument for cutting tax benefits and public funding for higher education,” said Charlie Eaton, a professor at the University of California, Merced, who has studied university endowment wealth.

The top 10 included some expected names, including the leaders of the University of Pennsylvania, the University of Southern California, Columbia University, the University of Chicago and Boston University.

Private colleges tend to pay their presidents more than public ones do. The Chronicle’s most recent compilation for public universities showed eight earning compensation packages exceeding $1 million, led by Michael Crow of Arizona State University, at $1.6 million.

As presidents’ pay has risen unabated, lawmakers have begun criticizing the size of some universities’ endowments, which are currently untaxed. The tax bills that passed in the House and Senate each include a 1.4 percent tax on earnings of some college endowments, including many of the nation’s most elite schools. As many as 70 schools with large endowments could be affected by that tax, depending on which version of the bill is adopted.

Last year, three influential Republican legislators, led by Senator Orrin G. Hatch of Utah, sent a letter to 56 private universities with endowments of $1 billion or more, requesting information on “the numerous tax preferences” they enjoy. “Despite these large and growing endowments,” the letter said, “many colleges and universities have raised tuition far in excess of inflation.”

It will be interesting to see how the tax bills working their way through Congress will evolve in terms of taxing college endowments.  These data on college presidential salaries will fuel discussions to tax the endowments.


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