Historically, the position of college president has been a job of prestige and honor -- but not necessarily associated with financial success.
However, in recent years, administrators in higher education have been receiving salaries increasingly comparable to private sector executives -- and their job descriptions have become more similar, too.
The position of college and university presidents is in flux, both financially and philosophically, according to higher education experts.
As part of this metamorphosis, presidents are stepping down from their ivory towers and into more dynamic roles in which they are expected to act as both academic authorities and corporate executives. It's this new, multi-dimensional approach to the role that is motivating universities to come up with new ways of attracting -- and maintaining -- top administrators.
In Fiscal Year 2001, University President Judith Rodin received a combined salary, benefits package and expense account in excess of $800,000, according to University tax forms. Her salary alone was $690,405, the highest it has been during her long tenure at Penn.
According to higher education experts, such salaries are indicative of the changing nature of college presidencies.
"Non-profit organizations deserve competent CEOs, and the nature of the presidency is clearly changing," said Ray Cotton, vice president for higher education at ML Strategies, a Washington-based consulting firm.
"Years and years ago, boards wanted people who were Ph.D.s in their field," Cotton said. "Nowadays, what boards want are people who are good managers, people who can raise significant money for the institution, people who can get along with all of the various [groups] at the university... and a president who trips over one of those constituencies could easily lose his or her job."
But to harness these ideal "skill sets" for their institution and keep successful administrators where they are, boards are raising salaries into territory that is uncharted -- at least in the world of higher education.
"Most university boards are working very hard at keeping the valuable talent they have so they don't lose any time in moving the university forward, and that, of course, translates into competitive salaries," said Jan Greenwood, vice president of A.T. Kearney, Inc., a Virginia-based executive search firm.
"The universities are buying talent and experience.... In order to be competitive, they have to begin structuring a compensation [package] that is in fact competitive."
Over the past few years, Rodin's salary has consistently been near the top of the charts, even when compared to the other Ivy League schools. In FY 2000, her $605,000 base salary made her the second-highest-paid president of a private research university that year, according to figures reported by the Chronicle of Higher Education. The top earner in the group was the University of Bridgeport's Richard Rubenstein, who received a total compensation and benefits package of nearly $850,000.
Other Ivy League presidents received less than Rodin and Rubenstein in FY 2000, but still saw a significant rise over previous years. Princeton's former President Harold Shapiro received a base salary of $451,750, Harvard's former President Neil Rudenstine received $352,650 and Columbia's former President George Rupp received a $524,875 base.
Although Rodin's salary consistently puts her at "clearly a very high end" by current standards, according to Greenwood, she is not the only president whose salary has been rising. Greenwood said Rodin's salary is "certainly within the ballpark of what we would see."
"I think as the role changes, boards are willing to pay more," Cotton said. "Now, as the job description has changed and boards want tough administrators, they're looking at the compensation differently."
In addition to raising base salaries, colleges and universities are also changing the way presidents are compensated, tacking on huge benefits plans that sometimes include signing bonuses, paid-up insurance policies and deferred compensation plans.
"The packages are becoming more creative," said Rob Perry, president of H.R. Perry and Associates, a Washington-based executive search firm. He added that some benefits, like housing and car services, have been offered for a while.
"That's an area where there is a lot of change going on," Cotton said. "More and more board members are coming out of corporations where they're used to certain kinds of benefits that traditionally higher education has not offered.... They're used to seeing it in their daily lives at work."
One factor motivating university boards are the increasingly high salaries of private sector CEOs, whose jobs involve many of the same responsibilities that college presidents' jobs involve.
According to Greenwood, boards are asking themselves whether they are willing to risk losing their administrators. If they're not, the solution is to increase the compensation package and "try to provide a very comfortable environment for the person who is there to keep them happy," Greenwood said.
"I think the general market understands that the people in higher education do not make what those in the private business world make," Greenwood said.
The rise also stems from competition among universities, which frequently look to their peer institutions' administrative bodies to fill their own vacancies.
Rodin "is an example of somebody who has been very successful," Cotton said. "Therefore, the board is trying to compensate her at a level that would not make her recruitable."
Another factor is that universities are broadening the range of candidates they look at to fill top positions, Perry noted.
"There's also been an increase in the number of non-traditional candidates that are being recruited for presidencies," Perry said. "That factor has driven up presidential salaries as well... [nontraditional candidates] have been used to making a lot more."
But experts agreed that although the position of university president is becoming more similar to a private sector job, most academic administrators are perfectly happy to remain in higher education.
"I will certainly say to the board, 'You know, you don't have to pay dollar-for-dollar' to meet private sector salaries," Cotton said. "People are motivated by other things in higher education, but you have to keep an eye on it."
The trend is also spreading to public universities, according to numbers released this year by the Chronicle. Although public school presidents are traditionally paid less than their peers at private colleges and universities, public schools are finding that in order to keep their top administrators, they have to keep their numbers competitive.
Meanwhile, the trend towards higher salaries and bigger benefits packages shows no signs of slowing down.
"I don't think anyone expects it to peak," Greenwood said. "I think people expect it to continue... these things don't just stop somewhere in time, they keep developing over the years to stay competitive."
