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Are CEOs Overpaid? Not Compared With College Presidents (cbsnews.com)
schwit1 writes: For outrageous executive earnings, don't look to Wall Street -- look to academia. High pay for CEOs attracts annual attention and recitations about the immorality of capitalism, but when the focus is on average CEO pay, they make less than half the annual earnings of college presidents, according to CBS News. The average CEO earns $176,840 annually, an amount that would make a university president into a pauper. In academia, college presidents earn $377,261 annually. Americans outraged and indebted by high college costs will be quick to draw the parallel between a college president's pay and their tuition bill. Correlation, though, doesn't imply causation. College presidents aren't always the highest-paid college employees -- athletic coaches often earn more. Regardless, college presidents "are well into the 99th percentile of compensation for wage earners in the United States," Peter L. Hinrichs and Anne Chen noted for the Federal Reserve Bank of Cleveland.
classify the businesses into upper, middle and lower groups and redo the comparson.
The average CEO earns $176,840 annually, an amount that would make a university president into a pauper
Are they including self-proprietorships or something?
"First they came for the slanderers and i said nothing."
Are they just talking salary? As far as I know university presidents don't have stock options.
" If college presidents were to divide up their pay and write out checks to all their students, the per-person payout would be fairly low, amounting to no more than $300 per student."
The article is about the cost of overall administrative overhead, not just college presidents. The summary itself is even more misleading, as it attempts to compare base salary's between two very disparate fields. A CEO of a normal "wall street" company makes on average 20% of there income as salary. The rest of there income comes from bonuses, benefits and incentives. A large percentage of which is in the form of stock, something a college will not offer.
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Colleges are fat with administrators, so they cut corners on staffing and faculty.
Nobody picks colleges on the basis of the middle-management-to-student ratio, but that's what the growth in tuition gets.
Colleges are run as if the only measure of productivity is by the volume of email sent between administrators and staff.
There are a large number of CEOs compared to college presidents, as you need to include those from the small and medium business. You can look up some CEO, ehem Apple ehem, and calculate how many other CEOs you need to bring that average down to 176k. It probably is around 10 or 15 to 1.
Most of the CEOs compensation isn't "income". It's stocks and bonuses and such. Though I agree the amount presidents of universities are paid is ridiculous, it's no where near on the same level as CEOs. Claiming as such is just classical "there's lies, damn lies and statistics" for misleading.
College Presidents are overpaid.
If you look a true corporations and compare them based on size, most mid to large companies give their CEOs salary, bonus and stock. With stock usually increasing their pay by a multiple (ones I've looked at are 4-7x).
So, what exactly does this have to do with technology? Slashdot does purport to be a tech news site, last time I checked, and this is neither "news for nerds" nor "stuff that matters" (unless you are one of the vanishingly few that happens to work in higher education).
And, no, skipping past the article is not the answer. That's the sort of thing that led to the decline of Slashdot from its heyday as the place to be for technology people to the shadow of its former self that it is today. Screw you if you even so much as thought about typing that in response.
Easy college loans inflates salaries for college presidents.
Easy Fed money inflates salaries for corporate presidents.
Reforms are long overdue for college loans and monetary policy. Reduce easy money, watch salaries deflate.
Brought to you courtesy of Big Govt handing out Big Money and encouraging Big Student Loans.
This is what happens when an industry is subsidized.
For a college w/ 10,000 students, that's about $37 of their annual tuition. So for an average tuition of $29,056 that's about 0.1%.
Can offering a competitive salary for the college president improve a student's experience by 0.1%? I'm guessing yes.
... also, I can kill you with my brain.
Subject says it all....
and we can't have that. At least, as far as one side knows...
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...And let's not get started on college football coaches.
The article is deceptive. Here's the sort of CEO salaries that people complain about:
http://www.aflcio.org/Corporate-Watch/Paywatch-2014/100-Highest-Paid-CEOs
University presidents are not receiving salaries like those! This should be obvious to anyone who has looked at the issue. It make me wonder about the motivations of someone who would post that sort of right-wing agitprop.
Are they just talking salary? As far as I know university presidents don't have stock options.
You called it. Stock, bonuses, and golden-handshakes are where the money is. The salary is just covering "base load", to keep the wolf away from the Yacht's dock gate while the company isn't doing well enough that the big bucks aren't flowing adequately.
That's why turnaround CEOs can do the "dollar a year salary" thing for P.R. without hurting themselves financially.
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The question is phrased in a manner that is designed to draw out a pre-defined conclusion.
The question should be:
1. Are CEOs overpaid?
2. Are College presidents overpaid?
The real "Libtards" are the Libertarians!
Easy college loans inflates salaries for college presidents.
Easy Fed money inflates salaries for corporate presidents.
Reforms are long overdue for college loans and monetary policy. Reduce easy money, watch salaries deflate.
As much as I want to poke holes in the parent's logic, that's pretty much the essence of it. It's oversimplified, but hey, this is a social media site; not an acedemic site.
I'd like to also add that from the end of WWII to the beginning of the 70's, a college grad could walk into pretty a job upon graduation. And the people of that generation told their kids to go to college, get a degree in anything, and you got it made; which was true at that time.
That changed.
The new version is get a degree in a STEM field and you got it made is the new ....help me humanities people ...group think...zeitgeist...propaganda...I'm lost....
Are they just talking salary? As far as I know university presidents don't have stock options.
It is also a profoundly stupid critique in the first place. University Presidents are not only responsible for the whole university, but they are responsible for bringing in massive amounts of money. Your job is not only to provide leadership and support leaders underneath you, but to bring in the millions of dollars in donations that your school can use to expand its programs, increase financial aid, and keep tuition increases low.
If you were on a University Board of Trustees, wouldn't you want to spend the money to hire the right person for that job?
No, we're just underpaid
Yes, if you compare to what they are worth
Maybe, you just gotta pay them enough to keep their mouths shut
“He’s not deformed, he’s just drunk!”
A major uni in my state paid their "VP of Diversity" $180K (before benefits).
This is 3 to 4 times more than a starting Ph.D. at the same uni.
A Ph.D. (with a full professorship) retired from this uni was was making $70 after 30 years of teaching.
The Government school teachers in my county and state earn more than other college/uni graduates make but the school teachers get summers off.
Education has turned into a Great financial deal for so-called "educators".
Education has turned into a Great scam for taxpayers.
Are they total idiots, or being paid?
Of course the average CEO doesn't earn a killing. I'm a CEO. I make less than I did when I had a regular job.
The problem has never been the average CEO. The problem is the high-end CEOs. The guys who run banks, fortune 500 companies and such, who earn several thousand times what normal employees or, in fact, average CEOs make.
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Yet another lame attempt to change the topic and advance your paid for agenda - you failed at it.
There's a lot of people who are officially a "CEO", but it's largely just a title.
Years ago I new a guy who had a small consulting group of him and one other person. He would proudly proclaim to anyone that was willing to listen that "He was a CEO!". Nevermind that he was also a developer, salesman, janitor, etc of the company. All that mattered to him (and a few people who didn't realize what the reality was) that he had an official CEO title because of the way the company was organized.
So if you want to think of CEO as just a title of any company with the correct tax structure, I'm sure there's a lot of lowly paid CEOs.
For instance, If the local coffee shop decided to incorporate as an S-corp, and the majority shareholder said he was CEO, is that the same thing as the head of Exxon, who last year made 40.3 million dollars?
They have managed to make themselves indispensable to modern life. Very clever, very tricky, very evil.
Holy moly, this story is a lot of horseshit. There are one thousand, eight hundred and forty five private universities in the US. In 2010, there were 27.9 million businesses in the United States, and 18,500 or so have more than 500 employees. That means that at least 27.8 million of those businesses are what you'd call small businesses, which can mean one employee who happens to be the CEO for his little corporation that sells t-shirts on Etsy. I guarantee that the average salary of one of those corporations with more than 500 employees is a great deal more than the average university president where there are more than 500 employees.
So what we have here are two things being compared. One of which is defined and the other which is not. Does anyone know what you get when you take the average of something that is not defined?
I swear to Jesus, it's no wonder people are so dizzy that they're willing to vote for the spawn of Biff Tanner and Benito Mussolini for president. This is what they get for news.
You are welcome on my lawn.
CEOs don't have to worry about losing their job because a few whiny children throw a tantrum. Oh wait...nevermind
They compared the average salary of nearly 700 private, for profit colleges/universities against the average of all self-identified CEOs.
They excluded any president from a state college/university.
Ken
How about comparing it to CEO's of companies over a 1000 employees? Are they still only making 170k a year?
You are getting raked over the coals by both corporate management and collage staff... doctors too, cops, both the military and it's suppliers (war = jobs for soldiers), for profit prisons, domestic spying, teachers unions, the judicial system, your politicians, people voting for free stuff, 'social engineers' of both stripes... it's really quite catastrophic.
also back then tech / trade schools where good and they did not take 4+ years to get a job. Now we have lot's of people going to college that are better going some other place and we have tech / trade schools that are to much of a college and not just being about real job skills at just 1-2 years.
CEO / college president
They run the show and see to profits. They seek investors, do public relations and try to create a culture of success.
The problem seems to be that some expect college presidents to be saints, and therefore to work for a pittance. Since some schools are run by government, non-profits or churches should we expect that they are not a business? Well sorry, that's wrong. Schools are a business and their presidents are expected to bring in money just like any CEO.
...omphaloskepsis often...
I have no idea what they are huffing but the average CEO makes way more than $176k a year. Average lawyer makes $300/hour while the average IT technical professional makes $50/hr. University presidents and sports coaches should never make more than a CEO and this is the reason why public colleges now cost upwards of $40k a year. Insanity.
It varies by school but college football generally pays for itself.
The statistical analysis in this article is absolutely appalling. First you are right that they are not comparing to real CEOs. If you look at the data they use for the CEOs this apparently includes local and state government managers and, even worse, primary/elementary and secondary/high schools by which I presume they mean the head teacher which I don't think anyone thinks off when you say 'CEO'.
...which is sad because I actually think they have a point which their article actually does contain the evidence for if only they knew how to analyse it. If you look at the distribution of compensation then you will note that there is a significant tail out to insanely high values and this is where the problem lies. University presidents should get a high salary - certainly higher than the faculty and staff that they manage unless there are exceptional circumstances e.g. Nobel prize winner - but I fail to see how $1m+ salaries can be justified.
If you just look at the "Management of Companies and Enterprises" category then the average wage amount increases significantly to $210,120 but as you note there is no mention anywhere in the article at all about bonuses and it specifically mentions "wages" so I doubt that this is in any way representative of the actual compensation a CEO gets while the article clearly states that they included all bonuses paid to university presidents. This is clearly an appalling abuse of statistics and so any conclusions the article draws cannot be trusted.
In fact the last time the university where I worked advertized for a president four faculty from Arts wrote a joint, open application for the job (which was shared with the local media) to protest against these ridiculously high presidential salaries. As they pointed out you could hire all four of them, give them each a very significant raise (IIRC 50%) and still save money over the out going president's salary and this way they would be able to do four times as much work. Needless to say they were not offered the job!
I make a bit more than $176k a year as well. Good luck hiring me at your university if you start irrationally capping salaries.
My opinions are my own and given freely.
...imagine every student at a university being forced to fork out over TEN DOLLARS A YEAR to cover the president's salary?
If $300k puts you in the top 1%, the it's not the top 1% that matter. It's the guys who earn 9 figures that are the problem, they are the guys who run the endowments that pull the strings of these colleges.
I hate printers.
I disagree. This article is about the inequality between college CEOs and their poverty stricken counterparts in broader industry. Poor CEOs who only make $177k per year will soon be rioting. When a person's livelihood and dignity is degraded to the point that they are only earning $177k per year, then it is entirely understandable that they would rebel against the system that oppresses them such.
I hate printers.
Looking at the data, the increase in the pay for college administrators closely follows the increase in federal grants and loans to students, while the pay for instructors and professors has stagnated. The result is that the cost of college has skyrocketed, making it just as hard for a family to pay for college today, with the loans and grants, as it was before the explosion in college funding.
This idea of "Let's put _everyone_ through college with our unlimited federal funds!" does nothing but move money from taxpayers to rent-seeking college administrators (and a few more fancy buildings), reduces the overall quality of college students, and reduces the general efficiency of college classes while impoverishing college teachers.
This is yet another example of how a primitive 'do-good' methodology - unlimited federal funding for everyone to go to college - breaks the feedback loop of costs vs. benefits that act when a family unit must choose how to spend their limited resources.
A further negative consequence is that the pressure is reduced for high schools to make sure that their students are competent, while superfluous requirements for college degrees for every job proliferate. The result is beneficial in a sense - people are kept out of the workforce for an additional four to six years, improving the jobless rate.
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All the above are Executive Compensation.
How many shares in Princeton are traded? Oh, wait, zero
Yet another example of selective citation by a rightwinger
Just let student loans be cleared through bankruptcy. End federal loans. The price of college will drop tremendously when no one is able to acquire the money to pay them.
They're worth what people are paying for them.
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A CEO salary varies a lot. A small business CEO might even earn $0 for a few years. So of course the average is low.
That's the search term I'd be looking for, to compare college presidents to CEOs. With that search term, I keep getting hits for average fortune 500 CEO salary, and the range is from 10.5 million to 13.8 million.
Most CEOs derive most of their compensation from various types of stock agreements that don't have to be reported as "income" in the year in which they're granted. Does anyone here seriously believe that most CEOs of larger public companies make only a couple of hundred K a year?
If $300k puts me in the top 1% then we have bigger problems than we thought.
"Look, other people make far too much money too!"
Paraphrasing a Bankster.
Why wouldn't you want 300k/yr to be the top 1%? Is there something special about flattened comparative rates?
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we weren't talking about the NFL, we were talking about the NCAA. Try to keep up.
remove the class part from NCCA and pay them.
Also when the team needs 40-60 hours a week you don't have time for class or are taking joke classes that fill the gaps.
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Before jumpin' on the bandwagon. $380,000 is 9 to 12 times average salary (which is between $33,000 and $43,000.) I'd expect Joe average to earn more in the heart of capitalism.
I hadn't the slightest objection to his spending his time planning massacres for the bourgeoisie... (P.G. Wodehouse)
Does the College president gets millions in stock options every year?
The difference between being president of college or another is nowhere near the difference between being the CEO of a huge multinational and the CEO of a two person start up.
Also, I doubt there are any college presidents earning ten or twenty million a year even at somewhere like Harvard.
To have a right to do a thing is not at all the same as to be right in doing it
Key word being wage earner. CEOs and college presidents are examples of the good amount of difference in wages. 10x avg is probably good for society. It's those in the non wage class that cause the problem.
@schwit1 - Read the fucking article before writing the bullshit summary. The article was about Salaries of Private College Presidents and whether or not it's the driver for higher tuition. A minor point of comparison was that of College Presidents and CEOs. Read the fucking article sometime, jackass.
Whenever you see these unusually-high salaries, the defense always given is that they want to attract the best talent. Obviously, if subpar pay and perks are offered, it's not going to be attractive, but it seems that when you dangle big money, you're mostly going to get people with a taste for money, and damn all else. Has this ever been studied... executive performance vs pay? Do you really get a person 3,000 X better?
I worked at a large, high profile, Div I university, who had a football coach that was paid over a million a year. The football program was a separate entity from the academic programs. So $0 from a students tuition went to fund the stadium expansions or pay the coaching staff their crazy salaries.
There was a significant cash flow that went from the football program to the academic side, but not the opposite.
A CEO arguably needs some talent (although most seem to lack any talent and just follow their MBA training) a university president doesn't require any talent. It's all admin BS and most places largely run themselves. A college president does not come up with new products, or significantly changes the direction of the organization.
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This is oversimplified and just plain dumb. You can't compare CEOs and University presidents on base salary alone - you need to look at overall compensation. You can't give out stock options in a public institution and the budgets are more transparent so it's harder to hide enormous bonuses. Braindead propaganda - nothing more.
If you're in the top 1%, you're clearly a criminal profiteer. This is a problem for people who are in the 1%, but are certain that they aren't criminal profiteers, and yet, they need a catchy name to label criminal profiteers with that makes it seem like they're an exclusive group that is pulling all the strings and must be destroyed.
It's what we call a crisis of labeling. Luckily, there are plenty of other names we can call people who make a lot of money to prove that they are destroying the economy and making the government fail. You could use "wreckers" or "kulaks" or "capitalist pig". I know these are somewhat dated terms, but I'm sure that we can find some chants and slogans which will make use of these terms.
Or how about this? How about we call people on the actions that they have actually taken, as opposed to demonizing a whole class of people just because they make X amount of money? There's always going to be someone in those groups who doesn't deserve the invective that is thrown at them.
On the other hand, I suppose that we could just let God sort them out so that we don't have to do any thinking.
Thanks for the shout out. But you're thinking of U of Oregon. Oregon State has fielded a few decent football teams this millennium, but Oregon is the spiffily-uniformed team that's dominated the PAC12. Now if you want to talk baseball....Go Beavs!
Never let a lack of data get in the way of a good rant.
University president pay might be higher than CEO pay on average. But that factoid ignores two important things. First, that average CEO pay includes a lot of small companies that don't pay their executives much; it's the huge payouts at large companies that are the issue. There has been no public outcry about the pay of CEOs at companies with ten employees.
More importantly, salary is a small part of the total compensation of a CEO at a large corporation. The bulk comes in the form of stock options that are often worth many millions of dollars. University presidents do not get anything comparable, though they often receive free on-campus housing.
Living in the DC area, our combined incomes put us close to this figure. But $100-200k jobs are very common here. And, the cost of living here is proportional to the salaries. We're both low level managers, and by this the claim is that we're 1%ers, and we're criminally profiteering? If so, you need to get out of momma's basement, and learn something about the real world.
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The article is long on President's salary breakdown's, but short on CEO data. Follow the links and see that the "CEO" data was from a very selective list. From the study: "...This year’s study examined the compensation practices at 3,946 mid to large sized U.S. based charities that de-pend on support from the public...." I am not certain this is even a fair comparison. Apples & oranges?
"Forbes magazine reported that the average total compensation for a Fortune 500 CEO as of the 2012 Fortune survey was $10.5 million. This broke down as $3.5 million in salary and bonus, $3.8 million in other compensation such as personal perk packages and $3.2 million from exercising vested stock options and awards. The combined compensation for the 500 CEOs was $5.2 billion."
http://work.chron.com/average-income-ceo-fortune-500-company-5348.html
You failed to detect sarcasm.
Then why do so many colleges promote socialism?