MURCHISON: Big business in big universities
If Americans have heard one yarn about the salaries, incentive packages and lifestyles of top business executives, they’ve likely heard 1,000. There’s always room, of course, for another. Except this one comes from an unlikely source: the Chronicle of Higher Education.
The Chronicle recently released a survey of the compensation packages available at 185 public universities. At the top we find Ohio State University President E. Gordon Gee, whose employers judge him to be worth $1.3 million a year. One can only hope he is.
Who’s No. 2? University of Texas Chancellor Francisco G. Cigarroa at a princely $750,000. (It seems princely to most taxpayers, I expect.)
In place No. 3 we find the president of the University of Texas at Austin, William C. Powers Jr., who receives $746,738. You’ve always heard about us rich Texans.
Other compensation packages in the top 10 range from $728,504 to $633,631. The talented and able recipients of these salaries might do better on Wall Street, but academia isn’t Wall Street - a point often lost on toilers in the academic factories called modern universities.
Universities are big business now. However, they didn’t start that way.
The university’s classic mission is the formation of minds and character. A state’s public university was always deemed especially responsible to the taxpayers who kept its doors open and its faculty paid. It wasn’t a business; it was a public service.
One didn’t enter public service with the aim of getting rich. A president or chancellor might live in a special house owned by the university, but the idea of a bonus (bonus for what - increasing law school admissions?) or a deferred compensation package was foreign to the whole enterprise. Monetary incentives were the cold-tipped tools of Wall Street.
Speaking of Wall Street, an odd aspect to the reports about university compensation packages is what could be called the outrage deficit. With tuitions soaring, wouldn’t one expect more indignation from the paying public? Or has someone sold us on high administrative pay as one of modern life’s necessities?
If so, things really get odd here. One finds that in the corporate model, as applied to academia, incentives don’t always match outcomes.
Take the University of Texas (UT) system, whose flagship campus in Austin is listed as 45th in the latest - and widely devoured - U.S. News & World Report rankings. Now, 45th clearly beats 63rd (Texas A&M), 75th (Indiana), 85th (Auburn) and 143rd (Arizona State), but it’s not intellectual grandeur, least of all when barely half of its students graduate in four years, compared with students at Rice (83 percent), Virginia (84 percent) and North Carolina (74 percent).
With in-state UT tuition crowding $10,000 a year, there might be room for public concern over the performance of a “university of the first class” known sometimes as too large (50,000 students) and too uncertain of a central mission - to teach, form character or snag lucrative research contracts.
The largest pay package in 2008 for a CEO in the nonprofit sector in the Southwest was $229,000. Texas might not find a Mr. Gee or a Mr. Cigarroa available at that reduced rate. So what? The taxpayers might procure for that money an old-fashioned-scholar type rather than a corporate-style mover and shaker, someone immersed in mathematical formulas and odd bits of history, likelier surrounded by students than by assistant associate second vice presidents, fundraising consultants and well-heeled alumni in need of massaging.
A key question begs an answer: Hasn’t the time come to move in the direction of the old pre-corporate approach to higher education, in which great teaching and excited learning magically intersect? The workman is worthy of his hire, we’re assured on high authority. That does not mean universities funded by the taxpayers - you, me, all of us - have to hire people who really might be happier running a hedge fund than a temple of wisdom and reflection.
William Murchison is a senior fellow at the Texas Public Policy Foundation, a nonprofit free-market research institute based in Austin.
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