Colorado’s Well Paid College Presidents

M. Roy Wilson, who leads the University of Colorado at Denver and Health Sciences Center has a total compensation estimated by The Chronicle of Higher Education in its November 24, 2006 edition at $697,500 a year for 2006-2007.  This makes Wilson the 8th best paid public college President in the nation.  This breaks out as a $500,000 base salary (9th highest), a $175,000 bonus (2nd highest), and $22,500 in retirement pay.

This is notable given the financial squeeze that Colorado’s institutions of higher education of experienced during Colorado’s recent recession, due to constitutional spending limits under TABOR.  State funding is still not quite to pre-recession levels in Governor Owen’s last budget proposal.  But, while this is at the high end of the scale, it is also hardly obsene compared to president’s of comparable institutions or unfathomably immense pay packets of corporate CEOs in big business, particularly given some unique qualifications that Wilson brings to the job.

Governor Owens, by comparison brings in $90,000 a year. Attorney General John Suthers earns $80,000 a year.  Lieutenant Governor Jane Norton, Secretary of State Gigi Dennis and State Treasurer (and Secretary of State Elect) Mike Coffman each draw $68,500 a year in base salary from the state treasury.  Each of these posts also come with healthy retirement benefits and in the Governor’s case, a residence that has come in handy despite his initial reluctance to use it, according to neighbors of the 8th Avenue official residence.

The presidents of the University of Delaware, Purdue University, the University of Florida, the University of Washington, the University of Michigan System, and Georgia State University make more.  One of them, however, Carl Patton of Georgia State University, has an artificially inflated total compensation package as it includes a third of a $900,000 golden parachute which accrued over twelve years of service.

David P. Roselle, of the University of Delaware leads the public college president pack with a package estimated at $979,571 for the most recent year information is available 2004-2005 (the University of Delaware considers itself quasi-private, a status shared by the University of Colorado in an effort to escape TABOR limitations on tuition increases).

Unlike many of Wilson’s peers, Wilson does not pick up any additional compensation serving on corporate boards of directors, a perk that involves little work and healthy compensation in exchange for loyally approving fat CEO pay packages on a regular basis.  Wilson also lacks the common perk (which was valued and considered in ranking pay packages), of a Presidential mansion.

While not making any records, other top university administrators in Colorado aren’t precisely hard up. 

Colorado State University President Larry Penley had a total compensation of $463,997 in 2006-2007, including a residence and a college provided car.

University of Colorado System President Hank Brown who gets a house, but no car, had total compensation of $429,000.

University of Colorado at Boulder President Bud Peterson had total compensation of $337,200 including the car and the residence that the university provided.

University of Northern Colorado President Kay Norton had total compensation of $307,851 including her official residence.

While Wilson’s package was generous, it is hardly the most gross example over compensation. 

Many of the the professors at the medical school that is part of the Health Sciences Center make mid-six figure salaries themselves, to compete with private sector pay for medical doctors, and it is customary for the top administrator in a college system to make an amount comparable to, or in excess of, the higher paid employees in the system.

M. Roy Wilson himself, is an esteemed, multi-specialty, research oriented medical doctor (meaning he has first hand experience winning research grants) with prior experience successfully serving as president of a similar health sciences center in Texas.  Few people in the country can bring those credentials, which help him secure respect from the faculty and gives the system confidence that he will suceed in running Denver’s very expensive research and teaching institution.  Few of his peers bring these kinds of credentials to the table.

Many of his peers at private colleges are also better compensated.  A couple of dozen of them make make than he does in total compensation. 

The best paid college president at any university or college in the county, private or public is Audrey K. Doberstein of Wilmington College in Delaware, who earned $2,746,241.  (Private college statistics come from charitable organization tax form 990 which are currently available only through the 2004-2005 academic year and are thus not strictly comparable to the more current public college numbers).

On the other hand, her big pay package, and that of nine other private university top executives in the top two dozen reflect golden parachutes accrued over a long period of successful service that vested upon those individual retirements.  Only a dozen college presidents make more than M. Roy Wilson when these somewhat deceptive outliers that are a product of accounting rules are considered.

The best paid private college president not including golden parachute payments is Peter G. Traber, who leads the Baylor College of Medicine.  He makes $1,311,716 a year in salary and benefits, plus another $20,000 a year and stock options for serving on a corporate board of directors.  Three more of the private college presidents that make more than Wilson also lead medical schools.

The median pay for public university presidents and public college system presidents at institutions that grant PhDs is $374,846.  Two of the five best paid public college presidents in Colorado make less than that.

The median pay for private college presidents at institutions that grant PhDs like CSU, CU and the University of Northern Colorado, in 2004-2005 was $497,046 (about 30% more than comparable public institutions), which is more than four of the five top paid college presidents in Colorado earn.

The average salary of professors at public colleges that offer PhDs in 2004-2005 ranged from $99,685 for male full professors, to $55,234 for female assistant professors (according to American Association of University Professors data reported by the World Almanac 2006).  The median is probably close to $68,000, a number midway between the pay of male and female associate professors, the intermediate academic rank.  Thus, the average college president at public universities that offer PhDs makes a little less than six times as much as the average professor.  Comparable secular private institutions pay about 20% more to the median professor, while comparable religiously affliated private institutions pay about 5% more than public institutions.  Still the ratio of president to median professor pay in private institutions is still only about eight to one.

Of course, none of these governmental and non-profit institution salaries can meaningfully compare to the pay of CEOs at large for profit corporations, who make about twelve times as much, despite the fact that many large universities and university systems are comparable in scale and complexity to large publicly held corporations. 

As The Chronicle notes (this story is based on a hard copy of these reports), the average total compensation for corporate CEOs at the 350 largest U.S. corporations was more than $6,000,000.  Much of that comes from stock options.  In contrast, in non-profits and governmental corporations, senior executives don’t share in the institution’s growth in value, they only receive contractual compensation out of the entity’s cash flow.

On advocacy group estimates that the average big company CEOs total compensation was 431 times that of the average American worker.  This uses an average figure twice as large as that relied upon by The Chronicle, probably by using a narrower set of large corporations, and workers at big corporations probably make closer to twice the number used for an average American worker in that estimate.  Still, even a ratio of 100-1 CEO to employee pay ratio far exceeds that of college presidents, even adjusting for the fact that the six to eight to one figure, excludes many lower paid college employees like facilities maintenance and food service workers.

Another way of looking at the comparison between university CEO pay, and corporate CEO pay, is to see it as a measure of just how much American stockholders are paying for a weak corporate governance system.

While in the private sector, corporate boards of directors are almost always docile, are effectively self-perpetuating and owe their loyalty primarily to the senior executives who helped facilitate their appointment, rather than to the shareholders who generally vote for board members on a management controlled Soviet ballot called a proxy.  This is true even of so called “independent directors” (as that term is defined in laws like Sarbanes-Oxley), many of whom are also among the best paid college presidents.

University presidents at public and private institutions alike, in contrast, usually report to boards of directors elected by voters, or to boards of directors who are political appointees of elected officials, or to boards chosen by alumni.  These genuinely independent boards rarely give away the farm.

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Andrew Oh-Willeke

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