The antacid test
For every parent who’s ever downed a Prilosec-and-Maalox cocktail while making out an eye-popping college tuition check, there comes a moment when they may look askance at how universities are spending their money.
After all, the same schools that send entreaties to contribute to billion-dollar capital campaigns have dramatically increased tuition — and administrative compensation — over the decades.
As reported in Associate Editor Courtney Mabeus-Brown’s August cover story about the value of a four-year degree, tuition rates at public universities have spiked 366% nationally in the past 30 years, and it’s much the same in Virginia, which saw average annual public university tuitions rise 333%, from $3,357 in the halcyon days of 1992-93 to $14,538 for the 2022-23 academic year. (During the same period, the national average wage index rose 178%, from $21,811 in 1991 to $60,575 in 2021. And, in what’s surely an entirely unrelated statistic, the global antacids market grew from around $800 million in 1990 to around $9.19 billion in 2022.)
With all that said, it’s probably not the most comforting news that in just the 2010s, total compensation for the presidents of the nation’s 49 flagship public universities rose by 56%. In fact, the lowest-earning of those 49 presidents made $108,054 more in 2019 than the nation’s highest-earning governor, according to research from George Mason University Schar School of Policy and Government professors Judith A. Wilder and James H. Finkelstein published last year in The Chronicle of Higher Education.
Here in Virginia, executive compensation at the commonwealth’s top public universities far exceeds Gov. Glenn Youngkin’s $175,000 salary. (Though with an estimated net worth exceeding $400 million, Youngkin donates his salary to nonprofits, so no harm, no foul.)
Here’s what compensation looks like for the top-earning presidents of Virginia public universities, according to data1 collected by the Chronicle:
- James E. Ryan, University of Virginia: $1.188 million (includes $760,909 base pay and $100,000 bonus)
- Gregory Washington, George Mason University: $807,602 (includes $667,604 base pay and $100,000 bonus)
- Katherine A. Rowe, William & Mary: $803,407 (includes $528,948 base pay and $77,250 bonus)
- Michael Rao, Virginia Commonwealth University: $773,558 (includes $641,619 base pay)
- Timothy D. Sands, Virginia Tech: $714,538 (includes $614,640 base pay)
Those numbers may appear hefty at first glance, but viewed from an executive compensation perspective, they’re a downright bargain.
In 2021, the CEOs of Virginia’s 40 largest publicly traded companies received $8.467 million in average total compensation. Take for example John S. Mengucci, president and CEO of Reston-based government contractor CACI International Inc. He received $4.75 million in 2021, overseeing a company with $6.2 billion in revenue and a workforce of about 23,000. Similarly, Robert M. Blue made $2.98 million in 2021 as chairman, president and CEO of Fortune 500 utility Dominion Energy Inc., which has more than 17,000 workers across 16 states and saw $17.17 billion in 2022 revenue.
By comparison, U.Va. serves more than 23,700 students, and Ryan oversees more than 20,000 faculty and staff, including the UVA Health System and U.Va.’s College at Wise. He’s responsible for a $5.3 billion 2023-24 fiscal budget.
Amid trends of declining enrollment and increased political heat, as well as national debates over school debt, diversity and the value of four-year degrees, higher education administrators must be nimble leaders with skill sets more akin to corporate executives.
Examining why public universities pay so much to leaders with an average 6.5-year tenure, GMU’s Wilde and Finkelstein concluded that part of the reason is due to the greater availability of comparative salary data, as well as university governing boards now including more corporate executives who are accustomed to negotiating expensive and elaborate compensation packages. Additionally, many prospective university presidents retain attorneys skilled in negotiating the best possible employment contracts for their clients.
When it comes to the question of reducing salaries for public university presidents, it appears the Maalox is already out of the bottle.
1 Based on 2021 data from Chronicle of Higher Education; Ryan data is from 2019, most recent year submitted to Chronicle. The Daily Cavalier reported that Ryan made $851,681 in salary for the 2022-23 academic year.