Out of 20 colleges in the Boston area, Boston University has the second highest total amount of money earned by employers in executive compensation packages, with BU five employees earning more than $1 million annually, according to a study released in late September.
“The spiraling cost of education is the elephant in the room we don’t like to talk about,” said Joshua Humphreys, the study’s author, in an interview.
His study tracked the disclosed total of executive compensation packages at the top 20 private institutions in Massachusetts.
The study reported that within these schools, more than $157 million went to 339 “key employees,” at Boston area universities, and more than 20 employees received more than $1 million each in 2009.
The list of 2009’s Top 20 most highly compensated employees includes finance and investment officers, medical school professors, athletic coaches and directors.
Humphreys said that the reasons many executive compensation packages are so high are the boards and consulting firms that determine employee pay.
“I think there are a lot of factors, including the culture and composition of pay boards. The main issues are about the boards,” he said. “The problem is that Wall Street style compensation has permeated our society.”
The study reported that university officials in Boston have received millions of dollars of compensation from serving on boards at companies such as Bank of America and Merrill Lynch, as well as money from being on private boards that have been left unreported by schools.
“These are non-profit institutions,” Humphreys said. “These compensation package decisions should not be going to for-profit consulting firms.”
A BU spokesman, as well as a number of professors, declined to comment on the report.
College of Arts and Sciences professor Nathalie Vincent-Munnia, however, said she finds the results “weird.”
“I was a professor in France, and the universities are public, so all professors earn the same amount of money, so that is weird for me to hear,” Vincent-Munnia, who teaches French, said.
While College of Fine Arts graduate student Luciano Barbosa said that it is difficult for him to judge these executivies, he said that the numbers are nonetheless shocking.
“I come from a different country with a different structure,” Barbosa said. “Where I come from, universities are public, but it is very surprising.”
CAS freshman Helen Chen said that she was shocked when she heard how high some employees at BU ranked in the report.
“You don’t really know what they do, but they are making so much money,” she said. “A lot of people are unemployed, but they’re making all this money. Where is it all going?”
Humphreys also said that the findings within this report are important for future generations as the cost of college is on the rise.
“I have a daughter and when she goes to school in 16 or 18 years, the cost to go to a private institution will be as much as $800,000 to $1 million. That’s just unbelievable,” Humphreys said.
CAS freshman Rohan Vaswani, however, said that BU executives work enough to make the kind of money that corporate executives make.
“A university is run no different than a corporation. Executives at BU should be paid as such,” Vaswani said. “I feel the wages and and salary they earn are deserved.”
Cameron Sullivan, a College of Engineering freshman, also came to the defense of the highly paid BU officials.
“Maybe they are some really brilliant people doing some really great things or research,” he said.
Humphreys said that if the current pay scale for top earning university employees does not change, the cost of education will continue to rise.
“If we continue to go along with this, it’s quite grim,” he said.
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The cost of higher education is ridiculous, my son wanted to go to college but we could not afford so we choose the “High Speed Universities” for his education while working now he working for fortune 500
It’s helpful to be able to read the whole report. It’s on the Tellus Institute’s website:
http://www.tellus.org/publications/files/issue-brief-exec-comp-201109.pdf
It’s nice to think that it takes 20 full-price students (whose families are probably having a really hard time reaching the tuition mark) to equate the salary of one top BU executive. Clearly, that person is 20x more important than the average student.
BU in a nutshell.
So my roommate and I did some math after reading the report provided by Nancy Kohn, above.
It reported that in 2009, Robert Brown made more than $1 million. Getting an undergraduate degree from BU in four years costs about $200,000 without any grants/aid. If the report can be taken at face value, the president is making the amount of money that 5 students pay to get undergraduate degrees- annually. I love BU- the programs, the opportunities, the education that I’m getting. I also understand that running a university as great as this one is must be extremely taxing.
However, is it really conscionable for anyone to be making that much money, year after year? I’d characterize it as almost obscene.
In the same year that, according to the report, Brown made $1,043,292, the average Massachusetts public school teacher made $67,572. That’s more than 15 times as much.
http://finance1.doe.mass.edu/schfin/statistics/salary.aspx?ID=999
I can’t find the average salaries for principals in Massachusetts, but the average salary for principals in New England was $109,298 in 2009.
http://www.nassp.org/jobs/2010-principal-salary-survey
The responsibilities of a teacher or principal and a university president are drastically different, but I think that the comparison is a worthy one to make.
This is all pretty depressing.
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