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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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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.
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).
Hate to break the bad news for you. Not all Slashdot readers live in their mother's basement. Most of us worked in the Big Blue Room with the Big Yellow Light upstairs (a.k.a, Real World). Some of us financial wonks don't mind see an article or two on the economy.
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.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
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?
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.
Assorted stuff I do sometimes: Lemuria.org
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.
And once you are a professional and seeing people on wall street that are essentially salesman getting 7 figure bonuses while our 401Ks get decimated by their "management fees".
You have two choices in the matter. You can be a victim and complain about being ass-raped by Wall Street. Or you can be proactive and start your own corporation, make money in a brokerage account, and contribute $53,000 per year into a qualified retirement (nearly three times more than you can contribute with a 401K and IRA).
There's a dirty little secret regarding the European 'free college' program - only qualified, prepared students get to attend college - it is a meritocracy, not a guaranteed entitlement.
In America we have a staggering number of college dropouts with debt accumulated taking remedial classes after high school.
In most European universities only the students that place well on standardized testing earn spots at 'free' universities. Academically-deficient high school graduates will never get the chance to attend university.
What's going to happen when inner-city parents realize all the 'free' university spots are filled with students that attended better schools in the suburbs? Will they demand universities lower their standards, demand their high schools get better, or demand affirmative action spots on campus?
Ken
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.
Odd that the NFL needs to go begging for public funds to build their stadiums, isn't it? Those billionaire beggars have no shame.
Mostly random stuff.
1) those stadiums aren't just for football.
2) no city is obligated in any way to build a stadium for the NFL. And the NFL isn't obligated in any way to provide team for any particular city....
"I do not agree with what you say, but I will defend to the death your right to say it"
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
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.
It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
A few of the big name schools make money from their football programs, most lose money.
Most lose money on the football program itself, but it still pays for itself or even brings in a lot of money through *donations* that they are able to encourage because people respond irrationally to football.
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.