What College Presidents Earn (Hint: A Lot)

The numbers are in: 42 private-college presidents take home more than a million dollars each year, says brand-new data analysis by The Chronicle Of Higher Education . As for the rest, their average salaries clock in at just under half a million dollars: Average pay for college presidents is $410,523, a figure that includes base salary and bonuses such as deferred compensation. And here's the twist: Harvard's president, Drew Gilpin Faust, doesn't even make the top 50 of highest-earning college presidents.

And as for the top 10? Well, the numbers are crazy high: salaries on that list clocked in at $1.6 million or more, with University of Chicago President Robert Zimmer topping the list with annual earnings of more than $3.3 million.

Interestingly enough, private colleges whose presidents have made the top-10 list for salaries see a huge drop in funding, compared to the colleges where presidents rank 11th or below. It's partly because of the visibility of the high salaries, says this Boston University research paper.

Institutions whose presidents appear in The Chronicle's top-10 list of highest-paid private-college executives receive between $2.8-million and $4.5-million less in donations the following year than their peers whose presidents are outside the top 10, according to [a working] paper.

The difference is donor awareness of executive pay levels, said the paper's authors ... The implication is that when potential donors know that an institution's president is among the highest paid in the country, they are less likely to donate. The difference in donations, the researchers found, came despite the fact that institutions with the highest-paid presidents had, on average, increased spending on fund raising in the year after their leaders made the top-10 list.

The backlash doesn't stop with the donors, however: Even the president's own, the Board of Trustees, views the top-10 ranking with some alarm. If the president's name pops up, the board's income increases at a much slower rate.

So if everybody recognizes these multimillion-dollar salaries as, to say the least, a little unflattering, why do they continue to receive them? Basically, because attracting the best of the best to run huge, prestigious colleges takes money. Plus, running a university with a billion-dollar budget is basically like running a small city.

"It would be really difficult for you to prove to me that the challenges associated with running a $200-million institution are the same as somebody running an institution at $2-billion," said trustee-board advisor Ron Seifert. "They are inherently different in terms of the managerial skills required."

But there's a problem: College presidents' salaries don't necessary correlate with the overall affluence of the college. For example, let's take Harvard's president, Drew Gilpin Faust:

Drew Gilpin Faust, president of Harvard University, is one of the least-well-compensated presidents relative to budget. With $899,734 in total compensation for 2011, Ms. Faust earned $230 for every $1-million of expenditures at Harvard, where the budget was $3.9-billion. While she leads one of the nation's most-prestigious institutions, Ms. Faust is not even among the 50 highest-paid presidents in the country.

One thing's for sure: With the average student-loan debt clocking in at more than $29,000, at least we know where some of our hard-earned dolla has gone.