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Financial crisis in the university sector? What crisis?

To look at the presidents’ paychecks, you’d never know universities were desperately short of cash


 

Ontario’s public universities cry poor to anyone who will listen and can produce elaborate pie charts and balance sheets to support their claims. Interestingly, none of their advocacy materials mention the increasingly rich financial compensation awarded to the senior administrators of those same institutions.

Today, as required under Ontario’s “sunshine act,” the province’s universities were forced to disclosure the taxable compensation given to senior administrators.

If you were judging only by how much senior administrators are taking to the bank, you’d think universities were richer than ever.

Two university employees made more than a half-million dollars last year. John Lyon, Managing Director of Investment Strategy at the University of Toronto, was paid a salary of $494,598.04 with $62,876.32 in taxable benefits for a total of $557,474.36. Peter George, president of McMaster University, continues to be Ontario’s top paid executive head with a salary of $524,435.14 and taxable benefits of $9,478.34.

The next highest paid president, David Johnston of the University of Waterloo, made $45,000 less than George with a total compensation figure of $488,242.66. Following close behind at $484,357.92 is Mamdouh Shoukri, president of York University. Overall, 13 Ontario university employees were compensated over $400,000 in 2008 with another 59 clearing the $300,000 hurdle.

Province wide, 10,461 university employees made the $100,000 plus list. In fairness, over half of the people on the list made less than $125,000. The grand compensation total of everyone on the list is $1.4 billion. More than half of that went to those earning more than $125,000.

Judging by the record pay cheques for senior and mid-level university executives, one could reasonably conclude that universities are flush with cash and that “business” is booming. Sadly, that is not the case. University endowments are down by double-digit percentages and pension plans are facing major deficits.

To address growing shortfalls, universities are going so far as to exploit loopholes in tuition regulations to increase fees on students, in order to pay for the excesses of the sector. The University of Toronto, for example, is the latest university to exploit a loophole in provincial regulations limiting the maximum tuition the university charges. The rules set the maximum tuition for students taking a 100 per cent course load. Traditionally, student fees are based on the number of courses taken: A student taking four courses paid for four, a student taking five paid for five.

The University of Toronto plans to make students taking three or four courses pay the same fees as those taking five. Ten Ontario universities are already exploiting this loophole to generate additional funds. Other universities are increasing “administrative fees” for services students must use in the course of their university career.

But if the situation is so dire in the Ivory Tower, why are the people at the top taking home growing, record pay cheques?

Administrators are asking low-level staff to take pay freezes and benefit rollbacks. They are increasingly cutting full-time tenure track positions in favour of contract positions. (And then, as budgets squeeze, reducing contract positions). Student services are being cut so that, for example, students can’t get the counselling and other supports they need to succeed in university.

It seems that Ontario universities are only poor when it comes time to deliver the undergraduate education that taxpayers believe their money is going to support.

It’s time for Ontario’s university administrators to follow the lead of University of Winnipeg president Lloyd Axworthy. Axworthy, realizing that he’s asking others to bare the burden of his institution’s financial situation, cut his salary by 10 per cent.

If university administrators are unable to control their excesses, then it is time for the Dalton McGuinty government to step in and force universities to spend taxpayer money on undergraduate education instead of administration.

Administrators taking a pay cut may not amount to much in the big picture, but 10 per cent of McMaster president Peter George’s compensation could, for example, save the job of an entry-level professor facing lay-off as his institutions continues to cut Liberal Arts undergraduate programs.

What do you say university presidents? Do you have 10 per cent to give back to your institutions? Or is it just everyone else who is expected to bail you out?


 

Financial crisis in the university sector? What crisis?

  1. I disagree, Joey.

    As a student of a university with a budget of over $1.5 billion, I don’t think a president’s salary in the $500,000 range is unreasonable. You failed to mention that a university president is not someone that can be hired off the street. He or she is required to be a tenured professor with an outstanding scholarly reputation, as well as being a proven administrator. Universities are very large institutions with a unique set of governing structures and regulations; the president’s job doesn’t get easier in a recession.

    Mr. Axworthy is welcome to buy every student at PegU a donut and coffee with his symbolic pay cut, but I doubt they will find their degree much improved.

  2. Let’s see some journalism from Macleans, take the York president’s salary, take the budget size and overall worth of the institution, and see what they’d make in the private sector. Hell, see what an investment manager working on something the size of UofT’s investments would make in the private sector.

    In short, let’s see someone at macleans step above the bitching about public sector salaries and actually provide something of value, rather than something that could have been copied with a new date from every year after the sunshine law came into effect.

  3. Well you know what, if university presidents are only there because their paychecks can be “competitive” with the private sector – maybe we don’t want them. Let them go to the private sector. Education is a public good – they themselves argue over and over how important education is and how worthy it is of funding. Hard to buy when they’re happy to take home $400K + paychecks rather than seeing some of that go to their “worthy cause”.

  4. I’m so tired of everyone’s greediness. Let’s put things in perspective. There are many people in the medical profession who don’t make that kind of money and they’re saving lives. The whole university system is broken. As a parent of a first year university student, I cannot believe how little is provided for the money paid. A couple of classes per week per course, sometimes those do not run the full time allotment, sometimes taught by TA’s instead of Profs, some classes are on-line, faculty strike this year. I feel totally ripped-off! The academia needs to get real. Put taxpayers dollars toward education and the students. Obviously, administration is needed but I’m guessing there’s way too much of it!

  5. It seems that there’s been a great deal of wage inflation recently among uni presidents. Not so long ago David Johnston was the best paid university president in the country – a salary that almost certainly is excessive.

    Pat is quite right that many physicians make significantly less for what is often more demanding work, something absolutely true of medical residents (decent enough salary but the hourly wage is quite bad) and even many staff specialists, especially at academic centres where a general surgeon might make between $350,000-400,000 (i.e. someone who had at least eight years of post-secondary education plus 5-6 years of residency and another 1-3 of fellowship and/or research training).

    Of course, the counterpoint is that university presidents are few in number, that they hold difficult, demanding positions which require administrative, fundraising, and – often – research acumen and the ability to manage a complex institution with highly distributed governance. And the ability to do manage the egos of hundreds of PhD’s in some sense. Whether they should be paid as well as they typically are is a difficult point – I’m not sure myself. As ever, the truly egregious salaries are not to be found in the public sector.

  6. Open the books for all to see. I can not believe a single person could ever earn more then their worth. University positions should be rewarded through high levels of academic thought and caring.

  7. Normally I would agree with, or at least be sympathetic to, Joey’s critics on this point. But but he is not, in this particular blog post, simply banging the populist drum that (shudder) university administrators are well paid.

    When administrators are cutting everywhere else, it is a valid point to ask why they are not looking at their own offices, particularly in extreme circumstances such as there are today.

    The problem here is because of the reliance of universities on public funding, and the fact that governments consider institutions of higher education to be a sort of public utility, providing a service for government aims, like hydro or medicare, or whatever.

    In this context it is not so surprising for commentators to make the well worn complaint that given that universities are funded by the public, why do its leaders make so much money?

    Maybe, universities should be taken off the public dole.

  8. And on what do you base that conclusion? Public employees don’t deserve to make a good living, is that it, whereas – say – Macleans bloggers are far more productive and valuable?

    Who else earns too much money to be in the public sector? Public health physicians? Academic physicians? Pathologists? Deputy ministers? How much should university presidents be paid? $50,000/year? $200,000? How can you know what’s too much? And why are you in any position to judge their qualifications or work?

    We’re not talking about bank presidents here making $5m or more each year. Whether we should ascribe as much value to top administration as we do is a valid question, but it is not a “public sector” issue to any great extent – not compared to the salaries for comparable positions in the private sector.

  9. I don’t think comparisons to the private sector are valid anymore. The private sector is just as out of touch with fair and reasonable compensation as any other sector, It is greed chasing greed run amuk! A middle class family trying to send 1 or 2 kids to university these days on a combined family income of under 100K can’t comprehend anyone taking home a half mil a year plus perks. Perhaps university administrators’ compensation should be based on how much they can lower tuition fees for their customers. Let’s face it students are customers and they should be treated as such. I don’t think York’s customers have been well served in view of the strike record over the last 10 years there. The huge compensation imbalance between top management and their employees is not sustainable. Ivory towers will crumble whether they are private sector or public sector towers. If the workers (ie: customers or general population) can’t afford a university education or a North American car or any other service, the ivory tower is providing, how long can it exist? There are some serious economic, moral and social issues to be worked out here. Ivory towers need to figure out how to put more dollars into the hands of those who will be handing the bucks back to them. Then we might approach a workable balance. Keep raising the price or the tax and sooner or later you’re out of business! I don’t think my comments apply only to university heads.

  10. Pingback: University presidents some of highest paid in public sector | News

  11. The writer of this column tells us that Lloyd Axworthy is “asking others to bare the burden” of his institution’s financial woes. “Bare the burden”? It is a sad comment on the decline of education in this country (at least among MacLeans journalists) that readers should have to BEAR the laying BARE of such a crass malapropism.

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