Another Pay Increase For Public University Presidents

It’s good to be king. Or at least, the president of a public university.

In its annual analysis, released Sunday, the Chronicle of Higher Education found that the median total compensation for public university presidents rose 4.7 percent to $441,392 in the 2011 to 2012 period. Four public university presidents now have total compensation worth about $1 million or more. The highest paid presidents on the list include Auburn University’s Jay Gogue ($2.54 million), Ohio State University’s E. Gordon Gee ($1.90 million), George Mason’s former president Alan G. Merten ($1.87 million) and Ball State University’s Jo Ann M. Gora ($984,647).

Those eye-popping numbers are much higher than the median because they include deferred compensation or other forms of pay. For instance, nearly 75 percent of Mr. Gogue’s package was thanks to deferred pay for reaching a five-year milestone, the Chronicle reports. Alan Merten, meanwhile, retired in 2012—earning him $1.2 million in retirement benefits, according to the Chronicle’s analysis. And then of course, there’s the report’s top earner, former Penn State president Graham Spanier, who was forced out amid the Jerry Sandusky child sex abuse scandal that engulfed the university. The analysis of his total compensation includes a $1.2 million severance payment, as well as $1.2 million in deferred pay.

Penn State didn’t necessarily have to pay Spanier that much, the Chronicle reports in an analysis of Spanier‘s windfall. Because the board of trustees opted to fire him “without cause,” he was able to retain the sort of benefits and payouts that might have been foregone had the board of trustees instead fired him “for cause.” While the board’s chairman, Spanier and university officials would not discuss the decision with the publication in depth, lawyers who focus on such contracts told the Chronicle that universities almost always avoid “for cause” firings because they invite lawsuits—which could run far more in defense costs than the severance money they pay out and could prompt even more unsavory details to come out in court. Even Mike Rice Jr., the Rutgers men’s basketball coach who was fired after video surfaced of him throwing balls and hurling verbal slurs at his players, was not terminated “for cause.” (At least in this case, however, the school and Rice agreed to settle for less than what Rice was owed.)

Without the full details of Rice’s or Spanier’s contracts, it’s hard to comment on their specific terminations. The Chronicle reports that an alumni representative on the board, for instance, believes there was a rush to judgment on Spanier’s departure. But if indeed “for cause” firings are so rare in academic circles, why do we keep putting such lofty severance benefits in these leaders’ contracts? While it may help to pad their job security, offering a rich payout if they’re terminated, the rarity with which these huge payments are given up means they also do little to deter bad behavior.

Boards of trustees have to weigh the financial and PR pros and cons of what’s in the long-term interest of the university, to be sure. But they also need to consider what kind of message it could send—particularly to the young students within their charge—if indeed fear is playing a role in how they pay the leaders they’ve decided to let go.


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