. And I save a lot, even on my current salary.. Consequently, the federal government established the Australian Universities Commission, which centrally determined [p]retty much everything on funding (Forsyth, Citation2014, p. 129). The balance of internal power shifted away from academic senates to university councils which became smaller and focused on strategic and financial matters (Rowlands, Citation2017). Page updated 15 Price 2020 . /Parent 2 0 R Average salaries in the UK stand at 268,103, or 289,756 once pension contributions are included less than any Australian university boss apart from Peter Sherlock of theUniversity of Divinity, a niche institution with 590 students. endobj RMIT vice-chancellor Martin Bean who is due to resign this month took a small pay cut of about $10,000 and received a remuneration package of $1.1 million. "Australia is not the colonies any more. 3 Egan Associates Principal John Egan was recently quoted by a number of media publications on the topic of University Vice Chancellor remuneration. I stick by the analysis done in 2013 (and quoted many times in the THE). * sharing experiences of implementation and ongoing refinement of governance and reporting. >> To the extent that salaries are not justifiable by reference to performance, they can be said to constitute rent. New Federation University vice-chancellor Duncan Bentley was the states lowest-paid vice-chancellor, with a remuneration package of $550,000 last year. The typical remuneration package for the heads of the countrys 38 public universities stood at A$913,000 (519,000) last year, with vice-chancellors pocketing average increases of 5.1 per cent more than double the raises doled out to academics and general staff. Australian vice-chancellors join the millionaires' club /Type /Page As such, they dont have controlling owners/shareholders. 7 0 obj I raised my hand before all of this and lowered my intake, right? Unless the report stated otherwise, it was assumed that VCs were not entitled to additional remuneration due to also being a council member. Julie's exceptional leadership, unique perspectives and range of experiences have been invaluable >> Rent-seeking behaviour is where actors extract a greater share of remuneration than is economically justified in terms of work undertaken or risks endured; it is a consequence of having unchecked power (Krueger, Citation1974). Problematically, universities are quasi-market not-for-profit organisations. /Parent 2 0 R Econometricians also looked at what might be driving these pay hikes. The UCC should act on its code. /Count 12 But even when I went to Harvard for my PhD, I met students who had been to the very best, most expensive private US schools. The resulting rethinking of governance led to the popularisation of contract and market-based agency theories (Jensen & Meckling, Citation1976). However, 12 universities had a change in leadership during the year and six had not publicly reported their financial data at the time of writing. For example, in 2018, the Australian Catholic Universitys VC was paid AUD $1,325,000 [726,633,000], exceeding the salaries at some more prestigious universities. /Resources << He said Sydney was arguably the highest paying university in Australia in what is on average the highest paying university system in the world. /Font 32 0 R Copyright (c) 2021 The author(s). Copyright (c) 2021 The author(s). /ExtGState 54 0 R Bachan and Reilly (Citation2015, p. 53) detail the remarkable 59% remuneration growth (in real terms) enjoyed across the sector between 1997 and 2009. endobj /R8 58 0 R On the basis of the data presented in this article, we argue that it may also explain, at least in part, the escalation of VC remuneration in Australia and the UK. It has been pummeled by hail, flood, fire and a massive cyberattack. Is vice chancellor pay justified by university performance? Click here for the Complete List of Vice-Chancellor Pay & Salary Packages At Australian Universities. Andrew Norton, higher education director at the Grattan Institute, said that university finance committees had become stacked with business people who have a very unrealistic sense of what salaries should be in the higher education sector. /Resources << Adapted from Gschwandtner and McManus (Citation2018, Table 1, p. 7). In the US, Cheng (Citation2014) found that between 2004 and 2009 institutional performance played a very limited role in determining public university VCs remuneration. 6 0 obj Possible Range. Licensed to the public under Creative Commons Creative Commons Attribution 4.0 International License license. /ExtGState 51 0 R Australian University Ranking | UniversityRankings.com.au. University of Queensland. However, independent academic analyses have consistently found no convincing evidence of a relationship between VC remuneration and performance and that the very significant increases since the 1990s are more likely to be the result of benchmarking in a case of [k]eeping up with VC Jones (Gschwandtner & McManus, Citation2018, p. 1). Help using this website - Accessibility statement, earnings are about half the previous figure. /ProcSet [/PDF /Text] For instance, a vice-chancellor may start in May and have eight months of remuneration recorded. Savage cuts to university budgets from 1981 led the non-statutory Committee of Vice-Chancellors and Principals (now Universities UK) to establish the Jarratt Committee with Sir Adrian Cadbury, a significant figure in corporate governance reform, as a member. << >> Further, there is a demonstrated link between these increases and formulaic pay-setting mechanisms such as benchmarking (Gschwandtner & McManus, Citation2018). x\YoG)JE7eRGhkfVem,ezi360l_VEu`6fVq|qdV-/KO/?9m5?=Py1C_?>+Lk;)tuh=*ANKR43oU2=mm~9 Research demonstrates rapid and relatively recent increases in VCs remuneration with little connection between pay and performance (Bachan & Reilly, Citation2015; Johnes & Virmani, Citation2020). Competitive Salary Package including 17% Superannuation; 5 year, full time contract; Lead and shape the future of ethical leadership! When a vice-chancellor is paid twice the salary of the prime minister, it does seem something is a bit wrong, said Mr Norton. But Schmidts fateful 2018 decision to cap both domestic and international student numbers at 20,000, arguing that getting bigger would not make the university better, has contributed to todays crisis, in effect crippling the pipeline of students going into last year and set to play out over the next five or six years. >> Agency theory casts owners as principals and managers as their agents, with both seeking to maximise their own financial position at the expense of the other (Ross, Citation1973). The Herald . If you like what you're reading online, why not take advantage of our subscription and get unlimited access to all of Times Higher Education's content? 2 0 obj Economics identifies four ideal types of remuneration: salaries/wages, stipends, profits and rent. The only disclosure of vice-chancellors remuneration I found that was not in the financial statements and bands was that of Western Sydney University as follows: Professor Barney Glover AO, Position: Vice-Chancellor and President Total Remuneration Package: $988,380 Period in Position: Full Year, Results: Met all objectives. endobj These trends prompt questions about what is going on. /Parent 2 0 R Universities academic work at this time was largely free from government interference and the cultural and intellectual contribution universities made was highly valued (Blackmore et al., Citation2010). The Morning Edition newsletter is our guide to the days most important and interesting stories, analysis and insights. Soaring vice-chancellors' salaries in Australia and the UK reflect a "clear failure of university governance" that demands political intervention, researchers say. /Author (Roberto Bergami) Toward a stewardship theory of management, Compensation benchmarking, leapfrogs, and the surge in executive pay, CEO governance and shareholder returns: Agency theory or stewardship theory, Governing the twenty-first century university: A view from the bridge, Silent escalation: Salaries of senior university administrators in Ontario, 19962006, Changing patterns of governance for Australian universities, Reporting on vice-chancellor salaries in Australias and the United Kingdoms media in the wake of strikes, cuts and falling performance, Theory of the firm: Managerial behavior, agency costs and ownership structure, Chief executive pay in UK higher education: The role of university performance, An assessment of agency theory as a framework for the governmentuniversity relationship, Australian universities top world rankingsfor VC pay, The political economy of the rent-seeking society, Rank order tournaments as optimum labor contracts, Changing cultures in UK higher education: The state as corporate market bureaucracy and the emergent academic enterprises, Executive compensation as a corporate governance problem, Agency theory: Review of theory and evidence on problems and perspectives, The economic theory of agency: The principal's problem, Pay developments in Britain and Germany: Collective bargaining, benchmarking, and mimetic wages, University governance in flux. $100 million a year, still wouldnt do it. Schmidt and Gordon have a pretty bush block near the small town of Sutton, a 30-minute drive from Canberra. The committees report (CVCP, Citation1985) opined the need for a greater role for the government in directing universities to a more efficient, business-like approach. The Office for Students (OfS) has published new analysis on the pay of senior university staff in England. * VC names with an asterix * are no longer working in that position. Universities are public institutions funded primarily by fee-paying students and taxpayers. Shareholders try to assert control by rewarding executives through salaries related to performance, creating an alignment of financial interests. "But university vice-chancellors don't do that. /Parent 2 0 R Third, the institutionalised and sometimes coercive structural power of agency relationships can be distinguished from the personal expert and referent power of stewardship (Davis et al., Citation1997, pp. /Length 17 0 R quality of education Table 2 indicates the increases between 2007 and 2015 which included the Global Financial Crisis and UK austerity policies. We suggest this is precisely what has occurred in relation to VC remuneration. While most, but not all, vice-chancellors took pay cuts during 2020 in solidarity with staff, there is no evidence that vice-chancellors pay reflects the performance of their university. >> But my happiness in life has nothing to do with the Nobel Prize. It also gets him an invitation to Davos every year, which he accepts. Copyright 20102023, The Conversation Media Group Ltd. An exception to the rule, Australian National Universitys Brian Schmidt is a Nobel laureate and vice-chancellor of one of the countrys most prestigious universities, but was the second-lowest-paid on about $650,000 in 2019. . That is, something ending with 999 or 000 would usually be a band. Averages include figures for v-cs who served less than a full year, #1 Submitted by GavinMoodie on August 31, 2018 - 7:57am. A similar report will be prepared for the Vice-Chancellor and the Vice-Chancellor's Risk and Compliance Committee within thirty-six months of the Vice-Chancellor's approval of the review report. which stood at A$900,000 last year, and was increasing less quickly, is set to pass A$1 million in 2020. The position reports to the Vice-Chancellor and President, and leads a focused team-set strategy to deliver on the university's global activites and initatives. Calculating Vice Chancellors salaries and senior executive remuneration in Australian public sector universities is challenging. Weve been struck by the biggest shock in the history of higher education, Schmidt says. But what is the incentive for me to do this? Dr Spence's estimated salary is $1.6 million but the UCL president earned $736,000 in 2018-19. 370,677 (2021-22) [1] Michael James Spence AC FRSN (born 10 January 1962) is an Australian university administrator who served as the Vice-Chancellor and Principal of the University of Sydney from 2008 to 2020. The vice-chancellors of Monash and RMIT universities also topped the $1 million mark last year, annual reports show. /Font 49 0 R The figures include details of salary, allowances, or other forms of remuneration for vice chancellors as well as information on staff paid over 100,000 a year for the 2019-20 academic year. A private sector CEO would be looking for new revenue right now.". I would have been a little asterisk on the side of other peoples work.. Warm Regards, Jenn Stringer, Associate Vice Chancellor for IT and Chief Information Officer. The union said that a typical university chief would earn the equivalent of a professional employees annual pay rise by lunchtime in a single day, and a senior lecturers salary increase by afternoon tea. Essaji and Horton (Citation2009) suggest that rent-seeking may explain the escalation of VC remuneration in Canada. Benchmarking therefore casts an aura of market-based objectivity, but is essentially self-fulfilling (Essaji & Horton, Citation2009). This number represents the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users. Professor Maskells pay package rose by about $20,000 to a range between $1.5 million and $1.515 million, while Monash University vice-chancellor Margaret Gardners rose by about $90,000, from $1.28 million to between $1.3 and $1.4 million. /Rotate 0 Professor Tom Smith, who heads the department of applied finance at Macquarie University, said vice-chancellors salaries had been inappropriately benchmarked against government department and corporate chief executives since the 1980s. /XObject 41 0 R Professors Tom Smith and James Guthrie from Macquarie University Business School said the average pay of Australia's 39 vice-chancellors - the university equivalent of a chief executive - is $985,000, compared to just $670,000 in the US and $635,000 in the UK. We argue that this area requires urgent governance reform. They just keep going for more contracts and more casualisation, she said. /Rotate 0 Reporting on vice-chancellor salaries in Australia . Using this, Bachan and Reilly (Citation2015) found that VCs enjoyed remuneration growth of 59% in real terms from 1997 to 2009. << << To view the position description, please click Senior Advisor, Government Relations Final PD_2023.pdf. /Type /Page The changing landscape of VCs remuneration in Australia and the UK, https://doi.org/10.1080/07294360.2020.1841741, https://www.theguardian.com/education/2019/jun/20/vice-chancellors-still-attend-pay-meetings-despite-outcry, https://www.theguardian.com/education/2018/mar/11/university-vice-chancellors-are-paid-far-more-than-public-sector-peers, https://doi.org/10.1111/j.1475-5890.2015.12045.x, https://doi.org/10.1080/13583883.2006.9967175, https://doi.org/10.5923/j.ijfa.20140304.04, http://www.ecgi.org/codes/documents/cadbury.pdf, https://doi.org/10.1007/s11162-014-9328-9, https://www.universitychairs.ac.uk/higher-education-remuneration-code-2/, http://www.educationengland.org.uk/documents/jarratt1985/index.html, https://doi.org/10.5465/amr.1997.9707180258, https://www.afr.com/news/policy/budget/simon-birmingham-attacks-university-vicechancellors-1m-salaries-20170501-gvw3lg, https://doi.org/10.1177/031289629101600103, https://doi.org/10.1007/s10734-009-9249-2, https://doi.org/10.4284/0038-4038-2011.215, https://www.timeshighereducation.com/features/chalk-it-oversight, https://blogs.kent.ac.uk/economics/2018/05/24/university-vice-chancellor-pay-performance-and-asymmetric-benchmarking/, https://doi.org/10.1080/07294360601166786, https://doi.org/10.1080/13603124.2019.1631387, https://www.hesa.ac.uk/data-and-analysis/finances/table-11, https://doi.org/10.1016/0304-405X(76)90026-X, https://doi.org/10.1007/s10479-019-03275-2, https://doi.org/10.1080/13600800802383018, https://junkee.com/university-vice-chancellor-salary/143593, https://www.smh.com.au/politics/federal/the-nation-s-highest-paid-university-leaders-20180826-p4zztd.html, https://www.msci.com/documents/1296102/7330587/Research_Insight_Out_of_Whack.pdf/46baa603-a503-42c1-91c0-d0ef19b754b2, https://www.officeforstudents.org.uk/advice-and-guidance/regulation/senior-staff-pay/, https://www.academia.edu/4029657/Determination_of_academic_pay_in_universities_and_colleges_in_UK_under_the_new_pay_framework_the_policy_and_practice, https://www.timeshighereducation.com/news/three-four-australian-v-cs-take-pay-cuts, https://www.timeshighereducation.com/news/average-australian-v-c-pay-packet-may-top-a1m, https://doi.org/10.1111/j.1468-2273.2008.00384.x, https://www.theguardian.com/education/2018/feb/15/majority-of-university-leaders-involved-in-setting-their-own-pay, Mid-level teaching and research university, New dual sector (established mid-1990s) university.
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