College executive compensation: How much is too much?

As Americans struggle to cover rising tuition, many are questioning the pay of top officials at colleges and universities, and wondering if rising presidential salaries and perks are somehow linked to rising tuition.

More than 35 public and private college presidents earned greater than a million dollars last year, according to the Chronicle of Higher Education.

But Dale Jones, Vice Chairman at executive search firm Heidrick & Struggles says the two are not linked. He has helped recruit several college presidents and high ranking college officials. He says a candidate’s fundraising history is a big factor in whether she gets an offer to serve as a university president. "The market has gone up for the best and brightest who can not only lead but who can also raise funds in a significant way," said Jones.

One example:

Gordon Gee retired from Ohio State University with an income of nearly $2 million. OSU’s board of trustees says Gee took the university to "new heights," helping raise more than $1.6 billion during his tenure.

Gee used some creativity to raise the money. He solicited millions of dollars in donations and also leased the universities parking lots in a 50-year contract valued at almost $500 million. The university expects to earn more than $3 billion on investment returns from the deal.

According to Ohio State University, state funding shrunk from 21% to 15% in the last decade. At the same time, funding from other sources increased more than $500 million. OSU gets less than a third of its revenue from tuition payments.

Alternative Way Consider Presidential Compensation:

Richard Vedder is an economist and heads the Center for College Affordability & Productivity. He believes one useful way to look at presidential pay is on a per student basis.

"The per student metric does indicate somewhat the potential cost to the student of high administrative costs," said Vedder.

His analysis of hundreds of schools reveals the average pay for a public university president is roughly $25 dollars per student. Using this metric, Auburn University paid its president the most in 2011: roughly $111 per student. Ohio state university -- with its more than 50-thousand students -- paid Gordon Gee the equivalent of $37 per student.

Private and Public Institutions' Executive Compensation Per Capita:

Source: Presidential Pay, The Chronicle of Higher Education
Analysis: The Center For College Affordability & Productivity

Mean: 152.9098988 |  Median: 125.5034633 | Mode: 0 | Standard Deviation: 141.7743869

Mean: 24.85791605 |  Median: 23.27737226 | Mode: N/A | Standard Deviation: 12.41480145 

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