Australia has no comparable data set or consequent analysis; however, annual rises are dutifully reported in the press. She has more than 20 years experience as a writer, journalist and editor. People forget that the private school phenomenon is very much an Australian thing. 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. Attila Csaszar. He is also the Director of the Grattan Institute, Melbourne Business School and the Melbourne Theatre Company . At the time of writing when 2019 university financial accounts were beginning to be reported, it was noted that the 2019 average for Australian vice-chancellors remuneration may well have exceeded AUD $1m [609,000] (Ross, Citation2020b). It is that unpleasant of a job sometimes, and I have better things to do with my life. Second, principals can align agents interests to their own using remuneration managers will seek to maximise shareholder wealth if they share in it (Jensen & Meckling, Citation1976). 10.32725/det.2021.023 Alex Usher, Canadian-based higher education strategist, Help using this website - Accessibility statement, no evidence that vice-chancellors pay reflects the performance. I raised my hand before all of this and lowered my intake, right? Government being a proactive principal worked before in Australia. The Dawkins reforms signalled a Thatcher-like commodification of the tertiary education system (Pusey, Citation1991, p. 148). The corporate world would not tolerate such practices. https://doi.org/10.32725/det.2021.023 During our lunch, Schmidt tells me more than half a dozen times that being a vice-chancellor is hard, really hard. Young man, what are you doing? she asked me. (Grove, Citation2018). One is for a rally protesting against course cuts. The vice-chancellors of Monash and RMIT universities also topped the $1 million mark last year, annual reports show. I just dont care that much about money, the 54-year-old says. "A CEO offers strategic direction. Source: iStock. Its clear there is a governance dynamic that is driving the pay escalation. Bamboo chopsticks are waved in the air as a point is made before they deftly dive in for an edamame bean. /Rotate 0 Over the past 30 years, Australian and British universities have been marketised, emulating private-sector for-profit organisations. There is evidence that such deductions were subsequently made on a number of occasions (Academic Salaries Tribunal, Citation1985). To request a reprint or commercial or derivative permissions for this article, please click on the relevant link below. 13(3), 130-141. 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. /MediaBox [0 0 595 842] >> These universities are broadly representative of university types in the Australian sector.Footnote2 Data for this table were sourced variously from Academic Salaries Tribunal reports and from publicly available university annual reports. The Courier-Mail asked UQ why Professor Terry's pay had reduced by $18,000 in . /Type /Catalog 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. She said some recent appointments had been made from outside the academic sphere. %PDF-1.7 Salary. In examining the public university annual reports for 2021, there are no disclosures per the voluntary code. * biennially review the effectiveness and currency of this code.. VCs and their representative bodies consistently justify this increased remuneration with agency rhetoric, arguing that it reflects their appropriate share of university performance improvements. /ExtGState 28 0 R TEQSA Publisher ID: PRV12061 (Australian University) Locked Bag 1797 Penrith NSW 2751 Tel: +61 2 9852 5222. When Schmidt was 13, they landed in Anchorage, Alaska, where his father worked on an environmental impact study of a proposed dam (it never got built). No potential conflict of interest was reported by the author(s). The impact of external and internal pressures on the distribution of authority within British universities: A synoptic view, Human motivation and corporate governance. Million-dollar vice-chancellor salaries highlight what's wrong with our Licensed to the public under Creative Commons Creative Commons Attribution 4.0 International License license. Of course, these are demanding roles, but econometric research demonstrates little, if any, relationship between vice-chancellors pay and their actual performance. Dr Spence has since taken up the role of of vice-chancellor at University College London where his earnings are about half the previous figure. Stipends are paid by organisations (or their patrons) to enable unsalaried people to undertake activities deemed socially or organisationally valuable such as grant-aided research students (Mauss, Citation1924/Citation1990). However, in the early twentieth century, companies began raising capital by selling shares, distributing ownership rights more widely and separating shareholder ownership from control by professional managers (Berle & Means, Citation1932/Citation1968). Most universities had awarded increases of between 1 per cent and 3.5 per cent, it said. /ProcSet [/PDF /ImageC /Text] The role of the Chair is to: /Contents 43 0 R 1. One of Victorian's lowest paid Vice-Chancellors, Professor Iain Martin at Deakin University, voluntarily took a substantial pay cut when he took the job, bringing his salary to $819,000 for 2020 . The Vice-Chancellor's salary for 2021 was $670,607 with overall reported remuneration currently in the range of $850,000 to $859,999 (2020: $940,000 to $949,999). Alex Ellinghausen, The university council was very concerned about the signal it would send to the market about not paying me enough, he says. Warm Regards, Jenn Stringer, Associate Vice Chancellor for IT and Chief Information Officer. If pro-rata earnings are calculated for leaders who did not serve a full academic year, the pay packet is even higher, reaching A$939,000. << * report annually (Q2) each year on adoption of the UCC code. The University Chancellors Council must act now to deliver on the purpose of the code. Professor Schmidt, who negotiated a salary package of just two-thirds of his predecessor, Ian Young, said the university council had been concerned about what such a low salary would flag about the institution. Qld university bosses pay packets drop but still dwarf Premier, PM This article critically considers the determination of vice-chancellors remuneration as a governance issue. 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). Adapted from Gschwandtner and McManus (2018), Lecturer in Environmental Art - School of Art and Design. Full article: Paying the piper: the governance of vice-chancellors Your message (optional) Click here for the Complete List of Vice-Chancellor Pay & Salary Packages At Australian Universities. 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. They don't have the training. True Essaji and Horton (Citation2009) suggest that rent-seeking may explain the escalation of VC remuneration in Canada. Executives get paid more than their work is worth, but less than the cost shareholders would incur in more closely monitoring them and executives are freed up to act entrepreneurially. Walking through Kambri, the reinvigorated heart of Australian National University with its long, gracious avenue linking the campus to the city, I see photocopied black-and-white posters taped to noticeboards that suggest all is not well at ANU. Analysis by The Australian Financial Review reveals that in 2021 at least 11 vice-chancellors received $1 million-plus salaries while making huge cuts internally, slashing staff numbers and putting infrastructure projects on ice as closed borders threatened the international student market. From the 1960s this role was undertaken by the Universities Authorities Panel and, from 1987, the Universities and Colleges Employers Association both employers associations (Rani, Citation2009). When a vice-chancellor is paid twice the salary of the prime minister, it does seem something is a bit wrong, said Mr Norton. Bachan and Reilly (Citation2015, p. 53) detail the remarkable 59% remuneration growth (in real terms) enjoyed across the sector between 1997 and 2009. Im spinning out companies, but it takes time. << To put it plainly, ANU has had a rough few years. to get daily updates on what's happening in the world of Australian Higher Education. In the US, Cheng (Citation2014) found that between 2004 and 2009 institutional performance played a very limited role in determining public university VCs remuneration. In real market businesses, CEOs hold a lot of power, including the power to enrich themselves at the cost of the dividends paid to shareholders. As a vice-chancellor, Im a big-picture guy I have a 50-year horizon, he says. 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. After 1945, the University Grants Commission (which channelled government funding) determined salaries and pay scales in consultation with the academic union. /Rotate 0 However, their salaries pale into insignificance beside the $4.29 million paid to the University of Louisvilles outgoing president, James Ramsay. /Font 42 0 R Governance regimes play a central role in the distribution of organisational power and determine the approaches used for fixing remuneration. 4 0 obj Averages can be misleading because of the marked variation in size and nature of UK universities, but in 20182019 at British universities with income over 30 million a year, the average VC remuneration was 281,550 [AUD 530,182], with the highest being London Business School at 609,000 [AUD 1.10 million] (HESA, Citationn.d.). 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. application/pdf But in reality its the deans. Using voluntarily disclosed 19931994 data, Baimbridge and Simpson (Citation1996) report average UK VC remuneration of 93,498. The daily e-news column receives no undisclosed funding or other assistance from any organisation or individual. 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. [2] He is currently the President and Provost of University College London. Your name It will be hard for an incoming Labor government not to put the screws on those universities that made money while laying off staff.. Following Jarratt, the government established a series of national funding councils that allowed it to steer universities at a distance using financial levers (Shattock, Citation2012). /Parent 2 0 R Governments could, for instance, set fixed ratios between VCs remuneration and mean academic salaries. Recommended articles lists articles that we recommend and is powered by our AI driven recommendation engine. And it helps them have confidence, which makes my job just easier, he said. /R14 61 0 R People wander past, often with that acutely self-conscious air that people have when they see someone famous, which Schmidt is here on campus. Australian vice-chancellors are among the highest paid globally, to such an extent it has become a political football. Insiders are also questioning the perverse situation where university bosses cried financial penury during 2021 while racking up the biggest surpluses ever recorded, including an astronomical $1 billion at the University of Sydney. I do this job out of passion, right? Professor Schmidt said. More prestigious universities generally paid their VCs more, but this was not universal. We find a high degree of theoretically predictable and empirically verifiable correlation between rising VC remuneration levels and shifts towards more market-based governance regimes in Australian and UK universities. We found out if your uni's Vice Chancellor got a pay rise during the The 4.5% comprises the incremental increases originally scheduled to occur in November 2020 and November 2021 of 2% and 2.5% respectively in its Enterprise Agreements negotiated in 2019, but which were paused and deferred until 31 January 2022 by . Salaries are paid in contractual exchange for work undertaken and are a cost of production. Although we draw on empirical examples from both Australia and the UK, this is not a comparative article. Follow the topics, people and companies that matter to you. Averages include figures for v-cs who served less than a full year, #1 Submitted by GavinMoodie on August 31, 2018 - 7:57am. But for me, wanting to be connected to my staff, and not actually caring about money, that is a good way of expressing it to my staff. Top 10 Vice-Chancellor Salary Packages; Rank Uni VC Name Salary Package ($) 1: University of Melbourne: Glyn Davis* 1,589,999: 2: University of Sydney: Michael Spence: . This tends to generate a race to the top pay rises in one university ripple through the others. /Resources << Campus Morning Mail is an independent newsletter written and published by Stephen Matchett, formerly a long-serving journalist at The Australian newspaper. This would be in line with agency thinking concerning surveillance and control where remuneration has failed to achieve the desired goals. It has been estimated that over 17,000 people lost their jobs in the university sector in 2020. Most Victorian university vice-chancellors either took a pay cut or donated their salary increases to student hardship funds in 2020, although the three highest-paid university heads were still on total salary packages of more than $1 million. Reporting on vice-chancellor salaries in Australia's and the United Kingdom's media in the wake of strikes, . CQUniversity posts $24 million loss for year ending 2022 /XObject 41 0 R Yet, despite the eye-watering sums, executive pay remains less of a hot . 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. >> By closing this message, you are consenting to our use of cookies. 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). /Parent 2 0 R The authors gratefully acknowledge the assistance to access published historical documents provided by a number of Australian universities and access to archival records provided by the National Tertiary Education Union of Australia. /Contents 56 0 R A survey of vice-chancellors salaries by AFR Weekend based on available data shows that in 2020 the average pay packet was $900,000, with nine earning in excess of $1 million. DETUROPE - The Central European Journal of Tourism and Regional Development << /ProcSet [/PDF /Text] A private sector CEO would be looking for new revenue right now.". 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 . >> However, the demise of the Academic Salaries Tribunal in the late 1980s marked the end of this central oversight. >> Bergami Roberto << Vice-Chancellor Salary Packages (Archive 2017) - Australian University endobj It was wrong to say Australia had to pay more to lure top talent. In their comprehensive analysis over 10 years involving performance indicators relating to student numbers, student evaluations, research and financial performance, Gschwandtner and McManus (Citation2018) found neither VCs nor universities performance can explain the increases in VCs salaries, and that higher pay does not lead to higher performance. Credit: Photo: Chris Hopkins. 3099067 Australian vice-chancellors also outearn their public university counterparts in the US, where full-year pay packages averaged about $560,000 (436,000) in 2016-17, according to the latest survey conducted byThe Chronicle of Higher Education. We are doing that. By 2020, Australia had 39 self-governing and self-owning publicly funded universities. Financial exigencies considerably strengthened VCs and university governing bodies powers (Marginson & Considine, Citation2000). Million-dollar salaries for Australias vice-chancellors are becoming the norm even as drastic cost-cutting measures have resulted in the loss of tens of thousands of jobs and dozens of courses. There is no real strategic option other than to put their hand out to government every week, asking for a bailout.. 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. Thats just the way it works.. Professionals were seen as unaccountable and self-serving, making the self-governing universities with significant public funding an obvious target (McNay, Citation1999). I stick by the analysis done in 2013 (and quoted many times in the THE). 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. The pay of Australias top-earning university leader the University of Sydneys Michael Spence, who is on A$1.4 million was nearly twice that of the UKs best-remunerated vice-chancellor last year, Bath Spa Universitys Christina Slade, ironically an Australian whose 808,000 package included a 429,000 exit payment. 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. Rentiers are actors purposively engaged in rent-seeking behaviour (Krueger, Citation1974). /Length 17 0 R That's after adjusting for a COVID-related reduction to his current pay and despite UCL rating higher than Sydney University on global rankings. Lyn Mills. He also took a 20 per cent pay cut for six months last year. Performance objectives and targets are not further identified. /Type /Page Whilst governments may promise greater oversight, little appears to change. By 2019, some 81% of UK universities still allowed their VC to attend remuneration committee meetings and nine still allowed the VC to vote (down from 66 the previous year) (Adams, Citation2019). Canadian-based higher education strategist Alex Usher said vice-chancellors in his country were not paid anywhere near their Australian peers. Registered in England & Wales No. I ask Schmidt why relations are so strained. A study has found that the pay gap between Australian academics and their bosses mushroomed after the abolition of the Academic Salaries Tribunal, whose . New governance arrangements triggered the trend and might be needed to rein it in. We both remember the interaction.. University of Melbourne vice-chancellor Duncan Maskell is due to become Australias highest-paid vice-chancellor from next month. The first relates to principals. Salaries of the highest-paid university heads have shrunk since 2020, with the top job at Sydney University falling by about $500,000 when vice chancellor Mark Scott began in July 2021. /Type /Page Those at prestigious Group of Eight universities were paid more than A$1.2 million on average. The UK has a similar history to Australias on the setting of academic staff salaries. >> As Table 2 starkly reveals, this ratio has increased very considerably since then. 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. Benchmarking therefore casts an aura of market-based objectivity, but is essentially self-fulfilling (Essaji & Horton, Citation2009). Source: Boden & Rowlands (2020). /Font 52 0 R There is no evidence of a system of performance-based bonuses. . When challenged, they maintain the vice-chancellor leaves the room when their pay is decided. These reforms have since deepened and accelerated, especially in England where deregulation and student fees have heralded significant competition and marketisation. /Parent 2 0 R Permission is granted subject to the terms of the License under which the work was published. Instead, we show that neither nation is an outlier. endobj Data on academic staff salaries were sourced from Academic Salaries Tribunal reports, union archives, from Marginson (Citation1989) and from published university financial statements. Copyright (c) 2021 The author(s). Has it made the self-confessed extrovert more guarded? From the nineteenth century, the state increasingly funded universities, but the government took care not to exercise control as a consequence (Ainley, Citation2014). Vice-chancellors take a pay cut but three remain in $1m club. /Parent 2 0 R endobj Job Reference: 1036266. In 2018-19 vice-chancellors received nearly 350,000 (A$635,000) on average. /ExtGState 34 0 R Traditionally, Australian and UK universities practised collegial governance of a stewardship nature (Duderstadt, Citation2004). These procedures outline the process and steps for researchers who wish to apply for a human ethics exemption, as permitted under Section 5.1.22 of The National Statement on Ethical Conduct in Human Research (2007). 141 academic workforce casualization Nosh, Shop 155-12, University Avenue, Kambri Precinct, ANU, Canberra ACT 2601, 2 x poke party bowls, $14.90 each1 sparkling water, $31 kombucha, $4.90. Market-based salary setting mechanisms, such as benchmarking, appear to drive these increases. 13 This was facilitated, in part, through the appointment to councils of external members from the business world, with a concomitant reduction in staff and student members (Baird, Citation2006). It should oversee and administer appropriate and transparent remuneration of vice-chancellors and senior staff. /Rotate 0 The best paid vice-chancellor was Sydney University's Professor Michael . This arrangement came to an abrupt end in the 1980s under Margaret Thatchers governments (Shattock, Citation2006). >> This includes South Australias three universities, none of which is in the world top 100. Those at prestigious Group of Eight universities were paid more than A$1.2 million on average. Dr Spence's estimated salary is $1.6 million but the UCL president earned $736,000 in 2018-19. There is evidence from Australia and from the UK, that the coronavirus pandemic has drawn attention to and exerted some mitigating effects on vice-chancellors remuneration in 2020, with some having taken remuneration cuts in the face of financial exigencies facing their universities (Ross, Citation2020a). But my happiness in life has nothing to do with the Nobel Prize. << * sharing experiences of implementation and ongoing refinement of governance and reporting. /Resources << And I save a lot, even on my current salary.. Further, there is a demonstrated link between these increases and formulaic pay-setting mechanisms such as benchmarking (Gschwandtner & McManus, Citation2018). Second, the organisation becomes an extension of a stewards identity and psychological structure (Davis et al., Citation1997, p. 29), but, for an agent, the attachment is strictly financial and self-serving. An openly corporatist approach to university governance was aimed at delivering greater accountability to government (Baird, Citation2006, p. 37). Professor Smith said Australian vice-chancellors should be benchmarked against leaders at leading British and US universities, who are paid less. Vice-Chancellor agrees to unlock salary increases to ease COVID-19 financial impact on staff. By the 1990s, self-serving managerial behaviour was widespread, leading shareholders and governments to demand a shift towards greater formal, endogenous and exogenous surveillance and control measures such as non-executive directors, remuneration and audit committees, and the strengthening of shareholders legal rights (Cadbury, Citation1992). You are done. Follow the topics, people and companies that matter to you. 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. But at Bartlett High School, a local public school with 2000 students, he found a posse of like-minded souls and teachers. A bill put before the SA parliament last October sought to tie vice-chancellors salaries to that of the premier. The estimated base pay is $97,675 per year. 5 Howick Place | London | SW1P 1WG. SolenSoftware Actavia 3.4 (Journal system) Baimbridge and Simpson (Citation1996) correctly hypothesised that the ending of local authority control over the old polytechnics and colleges as they entered the university sector (becoming the post-1992s) would lead to a rapid escalation in VC remuneration.