The University of Minnesota’s wish list for its next president includes a knack for innovation and business acumen. Several regents and state lawmakers argue it should also feature a willingness to work for relatively modest pay.
They say the right candidates would be so keen on a prestigious, rewarding public service post that they would accept a salary markedly lower than the $625,250 the president now makes. By bucking a national trend of relentlessly rising top administrator pay, the U could send a strong message to families grappling with ever-costlier tuition and legislators wary of granting the U’s funding requests in full.
“Being the president of the University of Minnesota is one of the most amazing jobs you can ever have,” said Regent Darrin Rosha. “The key is to find somebody who loves the university as much as they love money.”
But others on the U’s governing board, on campus and in the state Legislature caution that pushing for lower pay could shrink the pool of qualified contenders for the high-stakes job.
“We can’t ignore the market, and if we do so, we do it at our peril,” said Board of Regents Chairman David McMillan.
Some higher education leadership experts say it’s hard for one institution to go against the powerful headwinds of an ultracompetitive market for academic leaders, especially as many of the U’s peers are also seeking new presidents. Average total compensation for public college and university presidents has jumped by more than a third since 2010, to about $542,000 last year, when seven top leaders fetched more than $1 million, according to data from the Chronicle of Higher Education.
Retiring U President Eric Kaler’s base salary ranked sixth out of 14 Big Ten institutions in the Chronicle’s latest survey. As the university formally began taking nominations for his replacement this past week, disagreement over the role that compensation should play in the search sets up a possible showdown over finalists on the Board of Regents.
A rising debate
Rosha recalls a recent national seminar at which he attended back-to-back sessions, one on flagging public support for higher education and another on rising administrator compensation. To him, the two trends are connected. Now, he said, it is up to boards to push back — and doing so can help them test candidates’ commitment and appetite for public service.
“Higher education has lost its way in thinking we are getting better results by paying more money,” said Regent Michael Hsu. “That’s a false statement.”
Hsu said four regents on the 12-member board have rallied around seeking a U leader willing to work for less. Some lawmakers are taking up the call.
“Somebody’s got to say, ‘The market has gone nuts. It isn’t in our interest to keep driving up salaries,’ ” said state Sen. John Marty, DFL-Roseville.
Rep. Gene Pelowski, DFL-Winona, a veteran on the House higher education committee and a critic of administrator pay at the U, said he will watch the outcome of salary negotiations closely — and respond to the U’s budget request accordingly in the coming legislative session if he is reelected. He said the issue will also come up as lawmakers fill four regent seats next spring.
How to present the issue?
Rosha and Hsu cite the mid-$300,000 to mid-$400,000 range as a reasonable amount. And they insist the U must gauge the leading contenders’ stance on compensation early on, not wait to tackle the issue in contract negotiations. Yes, that could scare off some candidates, Hsu said, but to him, they would not be a fit anyway.
But McMillan said he and a majority of regents feel an early focus on compensation is the wrong approach when the university needs to draw highly qualified applicants for a high-pressure job running a complex, statewide enterprise. Granted, some strong applicants might be open to more modest compensation.
“Those candidates might be out there and if so, holy cow, we will chase them,” he said. But, he added, “We do not want to limit the quality of the pool of applicants by setting any bar on the high end of compensation.”
Joseph Konstan, who heads the Faculty Senate on the Twin Cities campus, said a new president willing to take a pay cut would send a symbolic message to faculty, who have seen modest pay increases in recent years. But, he said, it’s unrealistic to think pay would not be a factor in drawing — and keeping — a talented president.
“As much as I agree with the spirit of what these regents are saying, I don’t think it’s sensible strategy,” he said. “No single institution is a big enough player to reset the entire market.”
And if the university enlists its first female or minority president, Konstan said, would offering markedly lower pay signal that the U undervalues the perspective of diverse leaders who are highly sought-after?
Competition for leaders
Complicating matters is that other institutions are also seeking new presidents. Those include Michigan State University, which late last month hired the U’s presidential search firm, prompting regents to part ways with it.
Simran Mishra, the Twin Cities undergraduate student body president, said administrator pay matters to students. But a much higher priority is the ability to tune in to student concerns and run a transparent administration.
Sen. Jim Abeler, R-Anoka, said as the next president takes on the U’s $3.6 billion budget, he or she stands to save millions by taking innovative steps to make the school leaner — or to make a multimillion-dollar misstep.
“This is a bad place to save a dollar,” he said. “We need to attract the very best person we can find for the job.”
Intense debates about presidential pay are playing out on a growing number of campuses. The Chronicle of Higher Education’s annual salary survey for top leaders reliably sets off a storm of criticism amid steady increases. But examples of presidents stepping in to lead large universities on the cheap remain extremely rare.
Some advocates for reining in pay point to former Indiana Gov. Mitch Daniels, who in 2013 became president of Purdue University at a starting base salary of $420,000, about $135,000 less than his predecessor. But thanks to growing bonuses for performance and longevity since, Daniels now stands to make as much as $930,000.
Then, said Richard Vedder, an economist at Ohio University who leads the Center for College Affordability and Productivity, there is the University of California, a premier public system that faces some salary restraints but can bring in top leaders because of its prestige.
High corporate salaries
Vedder and Rita Bornstein, president emeritus of Rollins College in Florida and an author of several books on higher education leadership, point to corporate America’s own runaway pay packages and to more corporate executives serving on university governing boards. Search consultants have played a part, too. But, they agree, at the end of the day, it’s a tight market for highly demanding jobs.
“It’s a trend; it’s worrisome,” Bornstein said of high university president pay. “But one university can’t reverse this trend.”
Vedder said the U could try recruiting a public university provost or dean — someone likely earning in the $300,000 to $400,000 range — and offer a modest raise along with a much higher-profile position.
But at the end of the day, he said, given the high stakes of the job at a challenging time for higher education, “Do you really want to endanger your pool of candidates over 300,000 bucks? My guess is when the smoke clears, they’ll end up paying at least what they are paying now.”