Big Jump in Million-Dollar Pay Packages for Private College Leaders


Amid pressure on academia to control costs, the pay packages for private college presidents have continued to rise, as the number earning more than $1 million spiked in 2015 and average compensation rose 9 percent, according to an annual survey.

In 2015, the year with the most recent data available, 58 presidents earned a compensation package worth more than $1 million, up from 39 presidents in 2014, according to the annual ranking of pay at 500 private colleges compiled by The Chronicle of Higher Education.

In many cases the compensation packages were bolstered by deferred compensation plans and large retirement payouts.

“The number of presidents earning over $1 million is unusually high in 2015,” said Dan Bauman, a reporter for The Chronicle who worked on compiling the data. “We attribute that, in part, to a market where presidents are negotiating more deferred compensation and bonus packages before they take the job.”

At the head of the list was Nathan O. Hatch, the president of Wake Forest University, whose earnings of $4 million included a lump sum of nearly $3 million that he earned upon completing 10 years in the office.

Colleges frequently cite competitive pressures in setting the pay of presidents, who sometimes come from, or are recruited for, the corporate executive suite. They also note increasing demands on college leaders to raise money for their schools.

By that same token, such lucrative pay packages could “serve to feed a growing political argument for cutting tax benefits and public funding for higher education,” said Charlie Eaton, a professor at the University of California, Merced, who has studied university endowment wealth.

The top 10 included some expected names, including the leaders of the University of Pennsylvania, the University of Southern California, Columbia University, the University of Chicago and Boston University.

No. 2 was James W. Wagner, who stepped down as Emory University’s president last year. In 2015 he earned $3.5 million, which included a payout of 10 years of deferred compensation, according to the university. He was No. 33 on the previous year’s list. Jonathan K. Layne, a member of Emory’s board, credited the deferred compensation plan with providing “a stable, successful leadership” for Emory.

The top 10 also included Joanne K. Glasser, who departed in 2015 as president of Bradley University in Peoria, Ill.; David E. Van Zandt, president of the New School in New York City; and Daniel Curran, who stepped down from the presidency of the University of Dayton last year. He received more than $2.4 million in total pay, including retirement compensation.

Steve Cobb, who served on the university’s board of trustees, called Dr. Curran “an exceptional leader for this university during his 14-year tenure.”

“During that time, the university grew in size and stature by almost every measure and was positioned for continued growth,” Mr. Cobb said.

The average compensation for presidents at the surveyed private colleges who were in office for the full year rose 9 percent in 2015, to $570,000, and came after a 9 percent increase in 2014. The pay of the average American worker rose between 3 and 4 percent in each year, according to the Social Security Administration.

Private colleges tend to pay their presidents more than public ones do. The Chronicle’s most recent compilation for public universities showed eight earning compensation packages exceeding $1 million, led by Michael Crow of Arizona State University, at $1.6 million.

As presidents’ pay has risen unabated, lawmakers have begun criticizing the size of some universities’ endowments, which are currently untaxed. The tax bills that passed in the House and Senate each include a 1.4 percent tax on earnings of some college endowments, including many of the nation’s most elite schools. As many as 70 schools with large endowments could be affected by that tax, depending on which version of the bill is adopted.

Last year, three influential Republican legislators, led by Senator Orrin G. Hatch of Utah, sent a letter to 56 private universities with endowments of $1 billion or more, requesting information on “the numerous tax preferences” they enjoy. “Despite these large and growing endowments,” the letter said, “many colleges and universities have raised tuition far in excess of inflation.”

A look at the costs of private colleges by the College Board suggests that while tuition has risen dramatically, the actual price paid by students after grants and financial aid has increased only 5 percent over the past 10 years.

But concerns have been raised about growing student debt. In a presentation earlier this year, the Federal Reserve Bank of New York found that student debt was $1.3 trillion at the end of 2016, an increase of about 170 percent since 2006.

Dr. Eaton said the high salaries paid to private university presidents often are tied to the wealth of endowments.

“The unfortunate dynamic is that you see where the extreme wealth of private universities, and their ability to pay higher executive salaries, creates a norm that other universities feel pressured to follow,” Dr. Eaton said.