Fat-Cat Administrators at the Top 25; Higher executive pay at public universities pairs with raised tuition, fewer course offerings and an increase in miserably paid adjuncts

Fat-Cat Administrators at the Top 25

By THE EDITORIAL BOARDMAY 23, 2014

Confronted with punishing state budget cuts, the public colleges and universities that educate more than 70 percent of this country’s students have raised tuition, shrunk course offerings and hired miserably paid, part-time instructors who now form what amounts to a new underclass in the academic hierarchy. At the same time, some of those colleges and universities are spending much too freely on their top administrators.

report from the Institute for Policy Studies, a research group, says that the presidents at the 25 public universities that pay their presidents the most have seen their compensation soar since 2008. The average pay for presidents at all public research universities is hardly shabby, increasing by 14 percent, to $544,554, between 2009 and 2012. But average compensation for the presidents at the 25 highest-paying universities increased by a third, to $974,006.

The study makes some disturbing observations about “the top 25.” Student debt is worse than at other schools. Administrative spending is twice the spending on student aid. The percentage of tenured faculty members fell dramatically, while part-time adjunct faculty increased more than twice as fast as the national average for all universities. The “worst overall offenders,” the study said, were Ohio StatePenn State, the University of Minnesota, the University of Michigan and the University of Delaware.

One of the co-authors, Marjorie Wood, told The Times: “The high executive pay obviously isn’t the direct cause of higher student debt or cuts in labor spending. But if you think about it in terms of the allocation of resources, it does seem to be the tip of a very large iceberg, with universities that have top-heavy executive spending also having more adjuncts, more tuition increases and more administrative spending.”

The report also noted that, like executives in the banking sectors, “public university presidents weathered the immediate aftermath of the fall 2008 financial crisis with minimal or no reductions in total compensation.”

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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