Presidents will stand to make even more money for any increases in research dollars, graduation rates and fundraising. The University of Texas making these changes in compensation for presidents and administrators is groundbreaking and other institutions should follow suit. There has been a lot of importance placed on getting college kids to graduate in four years at the University of Texas.
The move to link this goal with the pay of UT President William Powers makes sense. I did take a human resources class and I feel that this is the right move, especially after consulting with a human resources consulting firm like Towers Watson. It is also pretty common among presidents of private nonprofit institutions according to a survey by the executive compensation consulting firm Yaffe & Company.
There is a slideshow of the highest paid college presidents and chancellors at the Huffington Post website and it is Ohio State University president Gordon Gee that rakes in the most with a compensation of $1.99 million.
There are many critics that have felt that this performance pay plan is not adequate when it comes to measuring the performance of presidents and administrators. It is true that a three-year time period may not tell enough about how efficient a college president is.
But the issues that are going to get tackled like graduation rates and fundraising are important for any university and especially for one like the University of Texas at Austin. This leads to the question of whether the carrot approach is the right way to go about this and what about the stick approach of just firing a president for not achieving these goals?