Saturday, 12 July 2014

Should Vice-Chancellors earn more than the Prime Minister?


In my previous post about the university as big business, I wrote about the dangers that arise when an institution focuses only on its finances, and fails to foster its key resource - the academic staff. An obsession with the bottom line can lead to staff being treated as disposable commodities, to be hired and fired as convenient. But if a university wants to become renowned for its stellar teaching and research record, it needs to attract and retain academics who have a sense of loyalty to the institution, and will be proud to act as ambassadors for it. The ethos of the institution as a community of scholars requires that there is some continuity, and that members have a sense of common purpose. That's not going to happen if jobs are insecure and people are judged according to grant income rather than academic excellence. As senior management at King's College London (KCL) may be starting to realise, reputation is all-important and should never be compromised in seeking financial solutions. If you lose your reputation as a benign institution that cares for its staff and students, you'll make the financial situation worse rather than better, because you will be shunned by the staff and students you wish to attract.

Of course, universities need money to function, and a good university administration will keep a careful eye on finances. But the troubles start when income becomes an end in itself rather than a means to an end. There was a great piece by Richard Horton in the Lancet this week that said it all far better than I could, noting the chilling effect of the current obsession with league tables and amounts of grant income.

My focus here, though, is on an additional trend that is symptomatic of all that is wrong: the tendency for top university executives to be paid enormous salaries. The arguments used to justify these sums are similar to those used by bankers defending their bonuses. First, the job is demanding and involves responsibility for complex budgets and large numbers of people. Second, you won't be able to attract the right people unless you pay them this much. Neither point seems valid to me. The job of a vice-chancellor is complicated, but so is the job of the Prime Minister, whose salary is £142K. Unless you have an expensive drug habit or a penchant for yachts, you can live a very comfortable life on such an income - I speak as one who earns a very good salary well below that level.  The point was made forcibly by a group of four academics who put in a joint job application for the post of vice-chancellor at the University of Alberta, noting that the salary of Can$400K was sufficient to divide up and still give each of them a decent income.

There are various reasons why someone would demand more than £142K. Maybe a few of them do have an expensive drug habit or a penchant for yachts. It's more likely, though, that their sense of self-worth is tied up with how much they are paid, and their competitive nature means they need to demonstrate that they are better than their contemporaries. They'd be quite happy with £142K if everyone else earned £130K, but once they hear of someone else earning £150K, the iron enters into the soul. Or, like Scrooge, they may get satisfaction from seeing the money building up, even though they don't actually need it. The point is that none of these characteristics is an attractive personality trait, and I would question whether we should regard them as essential criteria when selecting a vice chancellor.

The arguments against paying vice-chancellors such huge sums are clear. First, the money could be better spent: why give an inflated salary to a vice-chancellor to squirrel away in the stock market, when you could use it to address the university's core mission: e.g., for student welfare, scholarships, fellowships or academic posts? There are also interesting psychological considerations. As discussed in a recent piece by Anne Manne, being ultra-rich alters how you see your fellow human beings. You no longer need to do any of the ordinary things that other mortals do, such as worrying about whether you can pay the mortgage, traveling on public transport, or saving for a holiday. You start to see yourself as a different kind of person with a sense of entitlement. It's a dangerous mindset for someone who has to make decisions that impact large numbers of employees.

The senior management at KCL have completely lost the confidence of their staff and students by their recent actions. They maintain that the redundancies that they plan are tough but essential: the only solution after considering all other options. Well, here's an idea that I first mooted in the Comments section of the Times Higher opinion piece that I wrote on the Kings College debacle.  They could voluntarily settle for lower salaries themselves. According to figures from the Times Higher, Rick Trainor, the Vice Chancellor earned a package worth £321K in 2013, compared to an average salary of £50K for non-professorial academic staff. Cutting the VC salary to £142K could provide funds that could save the jobs of three more junior academics*. We don't know how much the Vice-Principals and other senior academics earn - by coincidence, it emerged this week that someone had put in a freedom-of-information request, and KCL was very reluctant to reveal the figures. It seems likely, though that if they were willing to take a cut, a few more posts could be rescued. Overall, only a small proportion of the planned redundancies would be saved by such a step, but it would be a gesture that would demonstrate to staff that their senior management were sincere in taking every possible measure to save jobs, and that they placed the good of the institution above their own egos. And it might also set a precedent for other Universities, and reverse the trend for Vice-Chancellors to create a wedge between themselves and their academic staff by behaving like bankers when negotiating salary deals.

*In this case, it would show remarkable generosity of spirit if my advice was followed, since Trainor is leaving in a few weeks, and so it would be his successor - who no doubt has already negotiated a substantial salary deal - who would be affected.


  1. To a first approximation, senior "executives" in any field set their own salaries. Sure, there's sometimes a notional form of arm's-length remuneration committee, whereby A's salary is officially determined by B (without anyone mentioning that A also sits on B's remuneration committee --- or perhaps the back-scratching circle is a little wider, A/B/C/D, but the same principle holds --- and quite likely, A and B are both members of the same golf club). But in practice, they help themselves to as much as they think they can get away with. Quite why this is a surprise to anyone is a mystery to me.

  2. Well, Nick, you make my point for me. They're behaving just like executives in any other business. But a university isn't just another business. Academics have traditionally been motivated by factors other than money, so that's why it is surprising. I'd expect a good VC's primary motivation to be to ensure the highest standards of academic excellence of the institution, and you'd think they'd also like a reputation for exemplary treatment of the workforce. They should get well-paid for doing that, but it doesn't need to be silly money.

  3. Perhaps Kings should include student representation on the group that awards senior executive salaries?

    1. I doubt it would work - the students chosen generally make decisions that don't impact on them but on future students and may be easily influenced by other factors (or indeed bullied by senior management who have huge potential power over them).

  4. Have you seen