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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.
They do in the state that I live in.
Public uni presidents have contracts with big payouts for leaving early (usually under bad circumstances) and a generous pension and nice payout for retiring (usually under normal or good circumstances).
It is very lucrative.
Pay is over $500K per year -- really over $500K -- for the flagship uni for our state.
(As are most premier state unis in all the USA.)
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!
A few of the big name schools make money from their football programs, most lose money.
Actually college administrator salaries have increased far above (IIRC more than double) the rate of college tuitions (which is about three times the overall inflation rate), while professor pay has languished and benefits have been decreased, to the point where universities in particular have resorted to eliminating tenured and full time positions, keeping large teams of part-time instructors, kept judiciously below the number of teaching hours that would trigger full time benefits - shades of fast food!
The pay inflation of college presidents has far exceeded that of the average for corporate executives. This difference largely tracks the inflation of federal subsidies for higher education - in other words, the administrations have succeeded in rent-seeking at the expense of students and taxpayers. Today, with grants and loans, it is as hard for a family to pay for college as it was before the federal subsidies were expanded, while the taxpayer now has to toss in an additional large amount. The net result of the expansion of federal money has done nothing but line the presidential pockets.
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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.