How Australian vice-chancellors ' pay came to average $1 million and If I was to be paid three times more than the next best-paid person at ANU, then I am basically saying, I am different to you; I am not of your ilk, he says. The problem is council members dont have the same financial self-interest as shareholders the vice-chancellors pay does not reduce their own profits. Its theorisation utilises simplified econometric models of human behaviour which do not adequately recognise that agents might use their asymmetric power to game the system to their own advantage. It hasnt always been like this. Turning to the highest paid vice-chancellor in Australia, The University of Melbourne's Professor Duncan Maskell's salary is $1,469,999, a pay cut of $44,000 from 2020. >> 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. The resulting rethinking of governance led to the popularisation of contract and market-based agency theories (Jensen & Meckling, Citation1976). Job losses were huge: 465, although the real number is probably higher with contracts not renewed and casuals let go. All my excess money I donate.. 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. He said when Sydney University vice-chancellor Michael Spence leaves Australia next month for UCL university in London, he will be taking a salary cut of more than 50 per cent. /Font 26 0 R Accordingly, this article advances understanding of the issue by exploring the dynamics of VC remuneration in the context of governance changes in universities as they have become progressively marketised. When very small institutions with an income of less than 30 million a year [AUD $54,442,074] are excluded, the ratio of total mean VC remuneration to total other mean staff remuneration in the English universities was 8.2 (data for Scotland and Wales is not available for this year) (OfS, Citation2020). Universities are public institutions funded primarily by fee-paying students and taxpayers. >> 18 0 obj Following this, we discuss the shifting nature of Australian and UK university governance and relate this to VC remuneration. /ModDate (D:20220220173829+01'00') "What strategic options have they been generating during COVID, apart from just laying people off? In the first half of the twentieth century, they were largely funded by the states, supplemented by student fees (Forsyth, Citation2014). And it helps them have confidence, which makes my job just easier, he said. The evidence suggests that the presence of highly-paid staff impacts positively on VC pay. In salary tournaments, pay levels reflect the hierarchy of organisational roles. The appointment of Schmidt, a Nobel prize-winning scientist, as vice-chancellor in 2016 was greeted like the breaking of a new dawn by many. Sharp increases from the 1990s corresponded with the lifting of government control over VCs remuneration, the inception of local enterprise bargaining, and a transition from collegial to corporate governance models. Login, Michael Spence maintains status as Australias highest-paiduniversity leaderdespite cut in salary, Average pay packages in Victoria push towards the A$1 million mark amid questions over whether spending more gets you better leadership, Average remuneration for university heads in Queensland in 2017 stands at twice the equivalent UK figure, Our annual pay review details v-cs remuneration, explores the make-up and workings of the governing bodies that set it, and compares the rewards on offer with those of other sectors, Mechanisms to determine university leaders salaries are opaque and unreliable. A spokesperson for the University of Melbourne said the gross remuneration figure published in the universitys annual report did not take into account the pay cut he and other senior executives took for six months. 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. As a result of this flawed governance framework, universities usually allow vice-chancellors to be members of, or at least attend, the remuneration committees that set their pay. Australias vice-chancellors are also paid considerably more than their peers in Britain and Canada. After we finish lunch, Schmidt heads back to the office, across the beautiful new heart of ANU, head down, hands in pockets, looking slightly forlorn. The framework for academic salaries is now set collectively, but there is local discretion on bargaining and implementation. /Font 55 0 R Many bosses lead from the front, ceding 20-plus per cent of their pay to help plug pandemic shortfalls . It was not debated before the state election and will be reintroduced by Greens MP Robert Simms, who has argued it is inappropriate for vice-chancellors to be paid like multinational corporate CEOs. /Rotate 0 Some universities offer performance pay, however these are in the minority. To view the position description, please click Senior Advisor, Government Relations Final PD_2023.pdf. So, if universities hire highly paid marketing or communications staff, it drives up pay levels for those above (but not below) them. * VC names with an asterix * are no longer working in that position. University councils are de jure endogenous principals, but are weak in agency terms because they are not legal owners, are financially disinterested (i.e., they are not shareholders), and have empowered VCs to act entrepreneurially. /ExtGState 24 0 R Another $100 million came from the sale of land to the NSW government, while philanthropists responded to the pandemic with open chequebooks. Crucial to this was recognising the Vice-Chancellor not only as academic leader but also as chief executive of the university (CVCP, Citation1985, para 5.5d). Of course, these are demanding roles, but econometric research demonstrates little, if any, relationship between vice-chancellors pay and their actual performance. Professor Shields said that many Australian universities were now only nominally government institutions, with the bulk of their money coming from student fees and other private sources. He noted that his predecessor had anticipated a very significant downturn in revenue, particularly from international students. 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. It also makes it less likely theyll leave, saving them the bother of appointing a new one. /Type /Page 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. Professor Schmidt earned $560,000 in 2020 after giving himself a $90,000 pay cut on 2019, according to information obtained by The Australian Financial Review. Australian universities are a millionaire factory for those who can scratch their way to the very top with the top 10 highest paid vice-chancellors all raking in million-dollar salary packages over the previous year. /Metadata 3 0 R Table 1 expresses the ratio of VCs salaries to the starting salary for the most junior level teaching and research academics at three Australian universities from 1975 to 2018. Thirteen Australian vice-chancellors earned more than A$1 million last year, up from 11 in 2016, with signs that others will soon join them. They don't have the training. To the extent that salaries are not justifiable by reference to performance, they can be said to constitute rent. As Table 2 starkly reveals, this ratio has increased very considerably since then. Turning to the highest paid vice-chancellor in Australia, The University of Melbournes Professor Duncan Maskells salary is $1,469,999, a pay cut of $44,000 from 2020. Follow the topics, people and companies that matter to you. But Melbourne University emeritus professor Frank Larkins said vice-chancellors high salaries reflected the increasing demand that Australian universities operate like businesses, including chasing ever more revenue from international students in order to fund their operations and cross-subsidise research. /Contents 20 0 R << He was born in the north-west US state of Montana and was an only child. Decisive steps to limit VC remuneration would assist in restoring faith in the university sector at a time when this is arguably most needed. Neither camp could have predicted the weather, the pandemic or the politics that have battered Australias national university. Johnes and Virmani (Citation2020) also note this rise, which accelerated when full student fees were introduced in 2011 as part of the further marketisation of universities. He says winning the Nobel Prize has not changed him, although it is a wonderful door opener. During our lunch, Schmidt tells me more than half a dozen times that being a vice-chancellor is hard, really hard. 2022-02-20T17:38:29+01:00 /Rotate 0 The Morning Edition newsletter is our guide to the days most important and interesting stories, analysis and insights. In this context, their remuneration packages were modest compared with many corporate chief executives, he said. In giving evidence to the inquiry, Dr Spence acknowledged how well paid he and other vice-chancellors were. Universities in the US disclose salaries for leading staff by name in exact amounts. 130-141 [2] He is currently the President and Provost of University College London. 7 0 obj >> Vice-Chancellor and President Professor Deborah Terry AO. Bachan and Reilly (Citation2015, p. 53) detail the remarkable 59% remuneration growth (in real terms) enjoyed across the sector between 1997 and 2009. Rockhampton-founded Central Queensland University has posted a $24.3 million loss while the Vice-Chancellor and President Professor Nicholas Klomp was paid an annual salary of up to $794,999, the . * biennially review the effectiveness and currency of this code.. But my happiness in life has nothing to do with the Nobel Prize. Governance regimes play a central role in the distribution of organisational power and determine the approaches used for fixing remuneration. 2022-08-01 2 0 obj That was pretty bad. When a vice-chancellor is paid twice the salary of the prime minister, it does seem something is a bit wrong, said Mr Norton. That is, university councils are not sufficiently empowered or self-interested in the financial affairs of the university to act as effective principals none of their actions have the potential to maximise their own financial positionFootnote3 at the expense of vice-chancellors as agents and hence they are unable to exercise effective control as governors with respect to levels of VC remuneration. 5 0 obj In agency terms, these findings beg the question as to whether information and power asymmetries within universities are influencing the setting of remuneration as, in agency terms, VCs are achieving unjustifiably high remuneration. He is poised to potentially receive the largest remuneration package in the country from next month when former ABC managing director Mark Scott begins at the University of Sydney on $500,000 less than his predecessor, Michael Spence, who was paid $1.53 million last year. Im more careful with my words than I used to be. If anything it's more attractive to come to Australia," Professor Smith said. RMIT University vice-chancellor Martin Bean, who is due to resign this month. The shift in the UK and Australian universities from collegial to more corporate forms of operating has engendered a corresponding shift in governance from stewardship to the agency. endobj To request a reprint or commercial or derivative permissions for this article, please click on the relevant link below. /Parent 2 0 R (Citation1997) differentiate agency and stewardship using six psychological and situational vectors. Similar trends are evident elsewhere, including Denmark (Boden & Wright, Citation2010) and Canada (Essaji & Horton, Citation2009). In interpreting the table, we need to be wary of changing vice-chancellor employment over the three years as this distorts remuneration. Similar trends are emerging in some other European countries. Three in four Australian v-cs take pay cuts - Times Higher Education (THE) The modesty of the venue fits with Schmidts world view. In 2020, the president of the worlds top university, Harvard, received only $60,000 more than Australias then best-paid vice-chancellor, the University of Sydneys Michael Spence.

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