Monday, November 12, 2007

The Corporatization of the University

"Presidents at 12 private universities received more than $1 million in the 2005-6 school year, the most recent period for which data on private institutions is available, up from seven a year earlier, according to an annual survey of presidential pay to be released today by The Chronicle of Higher Education. The number of private college presidents earning more than $500,000 reached 81, up from 70 a year earlier and just three a decade ago. The survey also found that the number of public university presidents making $700,000 or more rose to eight in 2006-7, the reporting period for public institutions. Only two public university presidents made $700,000 in the previous period. The survey did not include E. Gordon Gee, who took over at Ohio State University earlier this year and whose $1 million pay package, before bonuses, is probably the highest of any public institution."
"John W. Curtis, director of research and public policy at the American Association of University Professors, said rising pay to presidents was consistent with a “corporate mindset” at colleges."



Glater, Jonathan D. 2007. "Increased Compensation Puts More College Presidents in the Million-Dollar Club." (New York Times (12 November).


7 comments:

Jack said...

The one clear message that occurs to me when ever I read these stories concerning CEO pay at one organization or another, is that the board members who have made the compensation decision are telling everyone else in the organization that they have done little to contribute to the success of that organization. Did one guy make all the profit happen? Did one guy make the organization a huge success? That's not reality in any organization. It's just a continuing effort to make it appear that the top of the pyramid sits on the back of the base that forms the structure. Other than Jonas Salk and others of his ilk, I don't know of any person alive that is worth even that amount of annual pay.

Michael Perelman said...

Funny, because Salk was not greedy. He could have patented his vaccine & become fabulously wealthy.
Probably the only people worth that much would be people not interested in the big bucks.

Jack said...

I'd not meant to imply that Salk had benefited in any significant financial way. He did not. He simply invented a far better mouse trap. I'd have no significant problem with others who do the same and who go on to reap significant reward, but simply being chosen to steer the ship is no reason to think that you cause it to move forward and reach its destination. We hear so much BS about the need for every one to produce for the good of the organization, but then we tell the drones to screw off and take what they're given. It's a good old boy organizational concept. They all make sure to create the image of supremacy and their essential contribution to the bottom line. Again, BS. The team makes the winning effort. The coach simply coordinates that effort. What has happened to the concept of balance?

Michael Perelman said...

I did not take issue with you. I was just amplifying on your comment.

Michael Perelman said...
This comment has been removed by the author.
Jack said...

Nor did I interpret your comment to be that. Amplification of the absurdity of "executive" pay is sorely needed. It seems that every excuse is made for this looting of stock holder equity. it could otherwise be seen as a grossly disproportionate division of the total compensation necessary to run a complex organization. Look at who it is that grants these pay packages. Other executives from other publicly held corporations whose own pay packages will be determined by other executives sitting on the boards of their employers. A nicely tight nit group. A little of the old I'll scratch yours if you'll scratch mine. It's not likely that the stock fund industry which controls so many voting shares of those corporations will want to play the game any differently as their own executives are members of the same club. It's likely that the only way that this disparity of earnings will ever be addressed is through a more truly progressive income tax structure. Incomes in the stratosphere should be taxed as stratospheric earnings, which have little objective justification. We'll need a totally different group of elected representatives before that happens. The ones we have lately are clamoring to join the club, and not likely to make waves. It's just one more of those situations that are not likely to get better until they've gotten worse.

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