Getting Paid Less

One major criticism offered by higher education reformers, and one of the proposed reasons for massive increases in tuition over time, is the high salaries paid to academic administrators. One new administrator is resisting the trend. He’s not only getting (a little) less than his predecessor, but also any salary increases will be tied to performance.

According to a piece by Arthur Levine at Inside Higher Ed, in taking over Purdue University, outgoing Indiana Governor Mitch Daniels could be changing something about presidential compensation:

Daniels… eliminated the red flag that sets off both government and the academy: He rejected presidential salary inflation. His salary package is smaller than his predecessor’s, placing him tenth among the 12 Big Ten university presidents in terms of salary. There is no deferred compensation.

Second, and more importantly in terms of national models, is that Governor Daniels asked for a salary based upon achieving his goals for the university. The package is divided into two buckets — base salary and bonus. The bonus is tied to graduation rates, affordability, student achievement, philanthropic support, faculty excellence, and strategic program initiatives. In establishing this bonus system, Daniels married traditional notions of academic quality — as measured by excellence in faculty, programs and resources — with an equal emphasis on effective outcomes and price controls: graduation rates, affordability, and student achievement.

The compensation, however, still represents a gigantic salary hike for Daniels, who will earn $420,000 annually under the contract approved by Purdue’s board of trustees. His total pay, if he meets performance goals, could reach $546,000 a year.

Last year, as governor of Indiana, Daniels earned only $108,000.

The previous Purdue University president, France Cordova, earned a total $555,000 last year, including deferred compensation.

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Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer