Could the release of university presidential contracts actually work against the public interest?


I’m tempted to think the release of all these presidential contracts may actually work to increase university president’s compensation levels, especially in the case of retirement payouts.

Back in April 2005, Pauline Tam and Sarah Schmidt of The Ottawa Citizen wrote an extensive article on university presidential payouts. It was entitled “Carleton stands by president’s lucrative deal” and focused on a payout of over $550,000 to then retiring president Richard Van Loon. The article noted many other schools have the same perk.

The article made a point of noting that not all universities waste taxpayer dollars gave golden handshakes and used the University of Guelph as the example.

When Mordechai Rozanski retired in 2003 after 10 years as president at Guelph, he received no golden handshake. Had he returned to the faculty ranks, he would have only received one-semester of leave to re-establish his teaching and research. Yes, back in 2003, the University of Guelph actually used administrative leave for it’s intended purpose – to further the mission of the university.

Since the publishing of The Citizen story, this has changed. The University of Guelph has joined it’s peers in making administrative leave a golden handshake. The current UofG president will be getting a payout upon retiring in lieu of administrative leave.

We’ve often heard the line from universities that presidential contracts are comparable from institution to institution. Having read the contracts, it’s clear that different presidents get different perks and each contract is very individualized. Now that universities can compare the perks across the system, I’d expect their standardize perks across different institutions. I doubt they will cut the perks.

You think their overpaid now? It’s going to get worse.

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Could the release of university presidential contracts actually work against the public interest?

  1. So cutting presidential pay would be in the public interest?

  2. Making anything public doesn’t guarantee the situation will change or improve. It all depends on how the public opinion reacts, if it does at all.

  3. Yes, it is in the public interest. The public expects its money to go to educating young minds, not financial planners for well-paid administrators.

  4. Presumably, the relevant measure for whether these is outlandish or not is what the Presidents of similar-sized private corporations are being paid. What’s McMaster’s total budget – half a billion? How many Canadian companies with a turover of $500M are paying their Presidents less that $700K/year? (which is probably what George’s pay works out to if you monetize all his non-financial beenfits and post-employment payouts)

    I don’t know the answer, but I suspect that $700K is probably pretty close to the going rate.

    For journalists who want to make a big deal out of this, isn’t the onus on them to explain why Presidents should be paid less than their private-sector equivalents for running very large corporations?

  5. A lot of the debate is philosophical.

    I don’t believe that public sector compensation should be at the same level as a private sector CEO.

    In the private sector, there are solid measurements to determine CEO compensation and shareholders who hold CEOs to account (for the most part).

    In the university sector, there is a lack of proper oversight with BoGs failing to exercise their responsibilities and the government too afraid of interfering with “autonomy” to act.

    Many Canadian universities, McMaster included, decided they did not want to weather the challenges of being a private university and turned to the taxpayer for money. Part of the deal included the scrutiny they know find themselves subject to.

    I don’t believe public service should including million dollar plus “bonuses,” if a university president wishes to make private sector compensation – the private sector awaits. Until then, they should learn to accept the limitations of the taxpayer’s wallet.

    Seriously, how much worse is life at $200,000 a year compared to $500,000?

  6. BoG’s shorn of their oversight role? Check out how many Canadian presidents have quit in the last 24 months because of conflicts with their boards. That may once have been true, but it ain’t anymore.

    Scrutiny is fine, and i agree completely. But the issue I’m raising is about compensation. The point is, if you’re not going to pay the going rate for talented leadership and management, you’re not going to get very talented leaders and managers. Good university profs can make $150,000 to $200,000 just through salary and picking up a couple of consulting contacts along the way (in medicine, business and law, basic salaries are even higher). If you want tempt some of them to get out of that business and into the business of leading what are – in effect – large, diverse companies with nine-figure budgets thousands of employees, major high-tech interests, and act not only as the ultimate authority on academic and financial as well as being a chief fundraiser and a spokesperson for the institution with three levels of government, all the while putting up with fractious faculty and the occasional sit-in from students, you’re going to have to pay them fairly well. $200,000 doesn’t cut it.

    And for the best – those with long years experience in this demanding job – they’re going cost even more. We can argue about whether or not specific presidents are getting paid what their worth (my ideas about the relative worth of various presidents may not, for instance, line up with their rank order in salaries), but the argument that presidents are vastly overpaid *in general* isn’t tenable.

  7. You make good points as always Alex.

    As I said, it’s philosophical at this point. Based on your points, I can support a salary of $278,400 with some perks.

    – Joey

  8. To toss my hat in on this subject, I agree with some of Joey’s concerns about accountability, but I think it’s a mistake to confuse those concerns with the topic of compensation. The concerns should be addressed and corrected. The solution is definitely not to tailor compensation around the assumption of non-accountability.

    It’s only a “philosophical” debate if you begin to question how much money someone really needs, or if you introduce underlying suspicions that managing a multi-billion dollar enterprise isn’t a real skill and mostly Presidents are just figureheads who show up at public functions. I can engage in both of those debates and I’m sometimes interested in the topics, but I don’t think this is about that.

    If you buy into the assumption, for a moment, that there’s some real skill involved here is comes down to a simple equation. Do we believe that public institutions should or should not be competing with private institutions for the best executives? I’m not pleased with the price tags involved, but I do believe universities need to compete for the best administrators. To do otherwise is incredibly short-sighted. You’re risking budgetary consequences in the hundreds of millions of dollars (sometimes more – just think what an ill-conceived building costs) for the sake of saving comparatively very little on your top exec’s salary.

    I’m not saying everyone in a President’s role is worth their salary. But I do believe universities should be pursuing executives who are worth that salary. It’s a shame some people make so much while others make so little. I’m not a fan of the system. But until we radically reform capitalism, it’s naive to hope that universities can hide in a bubble and ignore market forces.

  9. University presidents tend to be captive to their institutions, much of the captivity being self-imposed. The relationships among the federal government, the provincial ministries of advanced education, the BoGs, the university senates, and the presidents need to be redefined so as to meet new program requirements.

    One clear opportunity for Canadian universities would be to establish non-traditional doctorates in Intelligence. This PhD could be exciting for students interested in international affairs, human rights, police work, and more conventional intelligence roles.

    If SFU, York, and the University of Montreal established linked doctoral programs in Intelligence, we could break out of the master’s degree mentality that afflicts so much of military and international affairs institute work in Canada. Students in a genuine PhD in Intelligence would begin the morning with a deep media cycle in which internalization and pattern recognition would be rigorously tested. Now, no Canadian university president is acting on an acceptable level of information analysis. Try finding out what the presidents are reading and the quality of their analysis of public sources. It is just not impressive.

    In an Intelligence doctorate, students would learn how to design and reverse engineer the world’s best websites. They would be fully familiar with PowerPhone, and well able to discover enhancements that would have obvious applications for university security. They would grasp linkages between language and perception in ways that should have become routine at West Point, but that probably never will. In Canada, we are troubled by major misconceptions about the official languages. We imagine that dual language use constitutes bilingualism even though only equal facility in French and English could accurately be called bilingualism. In BC, we have French immersion, which is absurd given that we want the best skills possible in both French and English. What exactly would be wrong with a national system of comprehensive–English and French–immersion as a fully funded federal program? We have no sound measures and tests for true bilingualism. Thus, we are caught in a fundamental philosophical linguistic-perceptual warp, an index of just how unseeing we are.

    The purpose of the Intelligence PhDs would be to sharpen our skills in working with fundamentals: where in Canada do we have the power labs in psychology that would be testing the utility of “grand theft auto IV” in developing spatial dexterity while avoiding game addiction? If this game had real linguistic capacity–as if we could merge it with the best American novel since Faulkner’s, No Country For Old Men, and its overpowering film–the product could be employed in advanced police training.

    No Canadian university president seems to understand the implications of the corpus revolution in Linguistics. The real index to bad fundamentals–realized in low productivity and churning of the obsolete in government and in higher education–is bad language fundamentals. If the federal government made the Collins COBUILD Intermediate English Grammar, the COBUILD English Grammar, the Oxford Advanced Learner’s Dictionary, and the Longman Language Activator official for its own operations in intermediate and advanced English and advised the provinces to follow, within a year Canada could become the first country to break the hold of the very large transnational corporation called Trash English–ETS, Kaplan, Azar grammars, an endless catalogue of garbage that draws revenues larger than those of Wal-Mart. In BC, the presidents of UBC and SFU like to peddle trash English. Apparently, they wear these as badges of honor: TOEFL, LPI, school rhetoric.

    I am not aware of any university president in Canada who is now making program changes to his or her university that I would consider so fundamental as to meet the potential in our systems. Incoherence is the keyword. As economic and intellectual trends become more centrifugal, Canadian university presidents peddle more and more trash and try to avoid contact with reality. Many artificial men are coming out of the woodwork to be university presidents. It could be a sign of the times. Since there is no real responsibility for program development–SSHRC may as well have no analysts–since university senates have been sleeping soundly for at least a decade–since government images of education are too old-fashioned to count–the university presidents should be taking charge of program analysis. It would make an interesting essay subject, why Canadian university presidents’ offices are not coming up with new and compelling programs.

    Or are they getting paid to be mascots?

    There is a certain hunger for images.

    How much is a factitious man worth?

  10. If we invested the money being wasted on ETS and Kaplan in university teaching instead, or even in capable administration, we would make some significant gains. Just how much money is being spent in Canada on MCAT, TOEFL, GRE and the like? What are the very high opportunity costs? Inherently, any test without a curriculum being specifically tested imposes high opportunity costs.

    If students studied COBUILD grammars and Oxford and Longman dictionaries as the basis of English tests, if they learned through sound methodologies how to integrate corpus grammars and dictionaries and novels, they would have assimilated not only knowledge to be tested, but something far more precious, the way to triangulate the reference books with texts such as “The Turn of the Screw” or “The Beast in the Jungle.” “Great Expectations” is full of counterfactuals. The COBUILD grammars have the best introductions to conditional clauses. Would you have learned these facts from ETS or Kaplan?

    ETS is a parasite on higher education in that if you ask students why they are studying for LSAT or MCAT, they just do not know. They are unaware of how limited the tests are linguistically, or how powerful it would be to base a law school admission test on “The Future for Philosophy,” “A Civil Action,” and the Oxford World’s Classics “Othello.” I am particularly disgusted with TOEFL and the GRE, both frankly bogus in their presentation of English.

    Many international students are suffering from the gross negligence of ETS and Kaplan. In the case of the latter, we have a serious conflict of interest on the part of the Washington Post, which should be undertaking deep investigations of the pervasive incompetence of Kaplan. Apparently nobody in Canada has read in The New York Times the coverage of the failure of English teaching and testing for foreign students in American graduate schools.

    There should be a fast-tracked and comprehensive investigation of the influence of ETS in Canadian medical and legal faculties, to begin with, along with the disaster of ETS English for learners of English. The patterns of influence should be traced and counteracted forcefully. If the activities of ETS and Kaplan fit definitions of commercial fraud, then they should be treated as such.

    There is no defence–there is no excuse–for misleading students and causing them to fritter away their time on ETS trash. It would be an interesting subject of speculation as to how ETS has managed to position itself at the gateway to the professional schools when it has no capability to construct valuable curricula and tests based on the curricula.

    We have another tradition in Canada, beyond our sleep-soaked adherence to the ETS-Kaplan agenda. That is the heedless employment of search firms to find candidates for presidents of Canadian universities, despite the fact that these firms are not qualified to do so. Therefore, instead of discovering presidents who ask fundamental questions and get rid of LSAT, we end up with ciphers such as the President of UBC. We also have to put up with the Ontario law school deans who want to retain LSAT as a vanity test so we will be able to compare ourselves to the Americans.

    September 1st or so, 2008, would be a good time to fire them all: the search firms, ETS, and Kaplan. Just because we can’t feel that we exist unless we accept the most debased aspects of American educational culture is no reason to continue with the ludicrous and documented practices of the terminally inept.

    A valuable pointer to the ETS-Kaplan “adaptation” is “The Art of Being a Parasite,” by Claude Combes. It should be required reading for every Canadian university president. I can just imagine one university president reaching for it now. When he has completed his latest mascot photo opportunity.

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