For ordinary working people, gaining $95,000 in one day means winning the lottery. For UNC President Margaret Spellings, it means getting a good job review.
Spellings received the big bump in March — $50,000 to be paid in cash and $45,000 to be paid into a retirement account — after the UNC Board of Governors decided that she had met or exceeded expectations. That boost followed a 2017 bonus for $45,000 plus $122,500 in additional pay, which was set aside in a retirement account.
The rising pay lifted Spellings’ compensation to nearly a million dollars last year and made her the 13th highest paid public university executive in the nation, according an annual compensation report published Sunday by the Chronicle of Higher Education. N.C. State’s Randy Woodson, who also has enjoyed hefty pay bumps, was close behind at $826,136, ranking 19th nationally.
At a time of rising fees, heavy student debt and wage stagnation, it’s natural to look askance at the ballooning compensation at the top of UNC and other public universities. But it’s also necessary to keep the pay in context. Spellings and Woodson are seen as successful administrators who oversee large, complex operations. And their big pay is less than the compensation received by the universities’ football and basketball coaches, who, like university presidents, have benefited from a bidding war for their talents.
Nonetheless, the compensation at the top of public universities shouldn’t go unnoticed and can’t go unchecked. There comes a point where universities can’t morally afford to let the compensation of university leaders grow wildly out of proportion to faculty compensation. In a public setting, a leader can’t both inspire and plunder.
University boards argue that they must provide ever higher compensation — salary plus housing and generous health and retirement benefits — in order to recruit and retain the best people. But dollars aren’t the only measure of quality or any guarantee of effectiveness. Penn State’s president went to prison for mishandling a child sex abuse scandal. The presidents of Louisville, Michigan State and Baylor were fired for mishandling scandals there. The University of Tennessee chancellor was dismissed after a year amid political conflict.
And once compensation becomes very high, it can inhibit rather than promote effective leadership. Chancellors, presidents and top administrators may be less inclined to be candid or act boldly when it cost them millions of dollars they may be unlikely to command again if dismissed. This effect is magnified by deferred compensation packages that require a leader to hold a job — and please the athletics boosters and legislative leaders — for years before they get their big pay day.
Richard Vedder, an Ohio University economist and director of the Center for College Affordability and Productivity, said very high pay accentuates the tendency of university presidents to avoid taking risks or taking stands.
“There’s an argument that the key to being successful as a university president is to offend the minimum number of people possible,” he said. “But that may not be the best policy for meeting the needs of he future.”
The Chronicle of Higher Education’s annual report on compensation shows ever rising salaries at the the top. That has to slow and even stop. Boards should not repeat with top administrators the reckless arms race that grossly inflated coaches’ pay.
The leaders of universities aren’t — or shouldn’t be — measured by how much they win, but rather by how well they answer the needs and advance the ambitions of their institutions. Those are qualities of leadership more money can’t buy, but too much money can impede.
Correction: An earlier version of this editorial said the University of Tennessee president was dismissed after a year. It was the chancellor of the University of Tennessee at Knoxville.