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Seriously inflated executive compensation

University executives are paid top dollar and, regardless of their success, never leave empty-handed


 

This story from the National Post reviews the ongoing controversy over executive compensation at McGill University. The story notes that Ms. Ann Dowsett Johnston, former editor of the Maclean’s Guide to Canadian Universities, was paid $761,000 in compensation for less than two years in the position of Vice-Principal.

The story alleges that Ms. Dowsett Johnston, who was hired to head McGill’s $750 million fundraising effort despite a lack of experience in the area of fundraising, was a personal friend of McGill principal Heather Munroe-Blum. Intrigue aside, the article raises some important points about the issue of inflated executive compensation at Canadian universities:

. . .the large payout to Ms. Dowsett Johnston is symptomatic of a larger trend in Canada’s publicly funded universities, where raises in executive pay have far outstripped inflation in recent years. As universities adopt the credo that they must function more like corporations, their top executives expect to be paid accordingly. And as in the business world, when things don’t work out, they do not leave empty-handed.


 

Seriously inflated executive compensation

  1. I find the intrigue a lot more relevant than the pay. As someone making approximately minimum wage, $400k a year is a lot, but I don’t have responsibility for three-quarters of a billion dollars. Her salary would be about 0.05% of that sum, so if you can get some better moves out of her than the next best candidate, definitely worth it. Many would argue that’s a big if.

  2. I think the issues are more complicated than newspaper stories can even suggest. Many mid-managers and even senior administrators who come from the faculty ranks do this work for their regular salaries plus a stipend. Administrators who have not been tenured as long may not get equal pay for equal work, perpetuating some of the issues of asymetrical compensation found in the ranks. The argument might be that tenured professors do not need golden parachutes because they’d still have secure jobs if things didn’t “work out,” but some people have obviously negotiated these things anyway. And what about administrators without faculty appointments? How do their salaries, negotiated free of the faculty salary + stipend model, compare with those of people who have come through the ranks? Universities have adopted a corporate model of compensation, in many ways, but I have never seen it examined from the academic administrator v. non-academic administrator perspective.

  3. But what this article fails to mention (and why it is such a big deal) is that while DowsettJohnston was making that ridiculous cash as VP at McGill, McGill did ridiculously well in all the Macleans rankings. When she stopped working here, our rankings dropped significantly.
    Coincedence?

    It also doesnt mention – again, why it’s a big deal – that McGill is currently in negotiations with the largest union on campus, the Support Staff union MUNACA. They have a strike mandate, but McGill is refusing to budge from offering them salary increases that are a fraction of what’s being offered in all other Quebec Universities. The reason is that McGill claims there is just no cash – fair enough, but stop hiring new administrative positions at top-salary and stop guaranteeing one of the best-paid professoriat in the country.

  4. re: “But what this article fails to mention (and why it is such a big deal) is that while DowsettJohnston was making that ridiculous cash as VP at McGill, McGill did ridiculously well in all the Macleans rankings.”

    Not true. The article notes the following:

    In the 2005 Maclean’s rankings, released a month before Ms. Dowsett Johnston’s hiring was announced, McGill tied for first among the 15 universities with medical schools and extensive PhD programs. University of Toronto had been alone at the top since 1994; McGill has remained in first for the last four years.

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