University Presidents’ Pay Increasingly Tied to Results

According to the , U.S. colleges and universities are becoming more aggressive about tying presidential pay raises to educational and fundraising goals.

Taking a page from the corporate playbook, public and private college boards are beginning to tie at least a portion of annual merit raises for their presidents to performance measures such as graduation rates, fundraising results, growth in research grants, and cost savings. The trend underscores the fact that, historically speaking, evaluations of, and raises for, college presidents have largely been a formality, Patrick Callan, president of the , told the Report. In some cases, said Callan, evaluations are undertaken merely "to justify extravagant salaries, or [are] way too focused on fundraising," while in others "it's like they put the presidents on trial....It creates presidents who won’t take risks."

But as public and private funding for colleges and universities increasingly is linked to results, so are raises and bonuses for the person in charge. "It all goes to the idea of putting money behind the goals you're trying to achieve," Dennis P. Jones, president of the and an expert on outcomes-based college funding, told the Report. "If that's more graduates, let's pay for graduates. If it's something else, let’s pay for that." Indeed, roughly a third of the presidents at private colleges and universities now are eligible for so-called variable pay, or pay for performance, reports, with two-thirds (64 percent) of those receiving their maximum allowable bonus — a median of $34,000 — in 2012.

In Massachusetts, the presidents of community colleges and state universities are being evaluated according to priorities set by the state's commissioner of higher education, Richard Freeland — priorities that include raising graduation rates, closing achievement gaps, and aligning educational programs with the needs of local employers. "We're being very clear about the educational outcomes we're trying to produce for the state, with a growing emphasis on performance," said Freeland. "Our intention is to cause presidents and local boards to give greater attention to advancing statewide goals for public higher education."

"." echinger Report 12/11/2013.