Society and Culture, Education

Governor Mitch Daniels walks the walk at Purdue

State of Indiana Governor Mitch Daniels takes part in a panel discussion titled "Why Wait for Washington? How States Can Create Jobs and Economic Growth" at the Milken Institute Global Conference in Beverly Hills, California May 1, 2012. REUTERS/Danny Moloshok

State of Indiana Governor Mitch Daniels takes part in a panel discussion titled "Why Wait for Washington? How States Can Create Jobs and Economic Growth" at the Milken Institute Global Conference in Beverly Hills, California May 1, 2012. REUTERS/Danny Moloshok

The media has not been particularly kind to college presidents of late, and for good reason. While college tuition costs have ballooned faster than almost any other good or service, college president pay has grown, often precipitously. According to data collected by the Chronicle of Higher Education, the median compensation for private college presidents in 2010 was $367,000 (a three percent increase over 2009). In 2010, 36 private college presidents made over $1 million. On the public side, the average compensation was $421,000 in 2010-2011, a three percent increase over the previous year. Executives at Ohio State, Texas A&M, and Penn State (the now-disgraced Graham Spanier) earned more than $1 million. These kinds of numbers lead CNN Money to publish headlines like “Colleges Pay Presidents Millions While Raising Tuition.” Stern, but fair.

But the big numbers are only part of the story. Presidents are often rewarded for fundraising prowess and institutional expansion at home and abroad. In short, they’re typically rewarded for raising and spending lots of money. Student success and fiscal stewardship of public dollars are not particularly high on the list. As Andrew Hacker and Claudia Dreifus put it in their provocative book Higher Education?:

Twenty-first-century presidents are chiefly technocrats, agile climbers who reach the top without making too many enemies or mistakes. If business leaders get ahead by increasing profits or share value, presidents do it by extending their school’s terrain; like real estate acquisitions and flashy graduate programs. Each night they pray that no football scandal or Ward Churchill will break on their watch, lest it imperil a move to a bigger and better post.

That’s about to change at Purdue University, where incoming president/outgoing governor Mitch Daniels has just agreed to a very different kind of contract. It would have been easy for Daniels to parlay his successful political career into the kind of meaty compensation package that’s typical of high-profile hires (see former New School president Bob Kerrey’s $3.05 million deal in 2010).

Instead, Daniels has opted for a performance-based contract, with rewards for reaching targets on measures of student and institutional success. Daniels stands to earn up to 30 percent above his base salary of $420,000 for achieving goals on measures like graduation rates, student learning outcomes, and affordability, along with more standard metrics like fundraising and faculty excellence. Even with a perfect score, which trustees think will be difficult, Daniels would earn $546,000, which would still rank 10th out of 12 Big 10 university presidents.

For those familiar with his tenure in Indiana, Daniels’ insistence on being held accountable for the outcomes that matter most to taxpayers—the creation of human capital—won’t be surprising. But do not underestimate how foreign these concepts are in the world of college presidents. Unfortunately, I doubt this new contract will start a trend among college leaders. In the same way that many of Daniels’ fellow governors continued to kick the proverbial can down the road on state spending, his new peers will continue to focus where their bread is buttered—fundraising and expansion.

But with any luck the new contract should start a conversation about what exactly we’re paying for.

One thought on “Governor Mitch Daniels walks the walk at Purdue

  1. I congratulate Mr. Daniels and although he will be up against some powerful institutional and cultural challenges, he has a reputation for walking the walk.

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