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Paying Community College CEOs

Paying Community College CEOs
December 23, 2009

Community college presidents receive less in compensation and benefits than do their peers at four-year institutions, according to a new survey of executives in the two-year sector.

Monday, Yaffe & Company, a consulting firm specializing in executive compensation at nonprofit entities, released its first survey of community college presidents’ salaries, benefits and perquisites. The survey, in which 208 community colleges in 42 states participated, has been endorsed by the American Association of Community Colleges.

The survey, however, comes with a few caveats: A majority of the presidents surveyed were from institutions in the eastern region, and presidents at institutions with enrollments near 100,000 students were excluded, as were the heads of tribal colleges. Despite these qualifications, however, officials from both the consulting firm and the AACC were confident the results accurately reflected executive compensation at two-year institutions.

The average age of the community college presidents surveyed was 58; 73 percent were male, and the average length of their service to their institution was six years. Their base salaries ranged from $88,250 to $321,823, with an average salary of about $165,000. The salaries vary widely depending on the size of the institution’s operating budget and its enrollment.

College 2009-10 Operating Budget Colleges Reporting Mean Presidential Salary
Less than $15 million 41 $129,120
$15 million to less than $25 million 47 $148,275
$25 million to less than $50 million 68 $166,687
At least $50 million 51 $207,199
College Student FTE Credit Enrollment Colleges Reporting Mean Presidential Salary
less than 2,000 74 $139,102
2,000 - 4,999 75 $159,251
greater than 5,000 58 $205,642

Still, salaries for community college presidents pale in comparison to those of their counterparts at four-year institutions. A recent survey by the College and University Professional Association for Human Resources found that the median salary for presidents of doctoral institutions is $380,293; the median for the presidents of master’s institutions is $242,050, and for those of baccalaureate institutions, $225,000.

Most community colleges presidents received basic benefits, such as health insurance, long term disability and life insurance. Relatively few, however, received fringe benefits such as dues to a social club or allowance for housing. These types of perquisites are more common among executives in the four-year sector.

Presidential Benefit % with Benefit
Health Insurance (Medical, Dental, Vision) 98.6%
Long Term Disability 74.0%
Life Insurance 93.8%
Institution Owned Housing 6.7%
Housing Allowance 20.2%
Automobile 38.0%
Automobile Allowance 39.9%
Country Club 12.5%
Health Club 1.9%
Social Club 14.9%
Other Clubs 22.1%
Sabbatical 18.0%

Only 35 percent of the presidents reported having a “deferred compensation arrangement or a supplemental executive retirement plan (SERP)” offered by their institution. Additionally, 90 percent had contracts, 49 percent of which were automatically renewing. Those without “evergreen contracts” had contracts with an average length of almost three years. Finally, 36 percent reported that they had a severance package.

George Boggs, president of AACC, said he was pleased to see that a large majority of community college presidents had employee contracts, noting that two-year institutions have lagged behind their four-year counterparts in the introduction of these written documents. In the past, he noted, it was common for most community college executives to have a simple letter of employment that may or may not have fully stipulated compensation and benefits. Some states, such as South Carolina, still do not allow their institutions to offer formal contracts, and boards in those states consider their presidents at-will employees.

“I’m encouraging community colleges to have employment contracts for their presidents because it makes everything clear as to what the benefits are,” said Boggs, adding that the AACC has tracked the growth of these contracts at community colleges in recent years. “In the past, when things were less formal, there were more misunderstandings. Having things written down definitely helps avoid conflicts.”

In recent months, a pair of community college executives made headlines for perceived financial abuses. Brian K. Johnson, president of Montgomery College, in Maryland, was put on leave in September after he was found to have racked up “$65,000 in airfare, lodgings, meals and other work-related expenses in the two full fiscal years he was on the job." Tuesday, Johnson officially resigned from the presidency. In addition, Rosa Perez, the departing chancellor of San Jose/Evergreen Community College District, charged her institution and its foundation for travel expenses such as plane tickets for her son to accompany her on a trip to Los Angeles and a trip with her partner to El Salvador.

Though Boggs said he did not think the potential abuses at Montgomery and Evergreen were related to either employment contracts or benefits, he did note there are lessons to be learned from these examples.

“These kinds of expenses need to be justified,” Boggs said. “If, for example, a president is attending a meeting, then that should be widely known to everybody at the college, and the reason for attending the conference shouldn’t be a secret. Also, if a president is going to pay for a limo for board members or whoever to go to dinner or someplace, then it should be noted what kind of business is being conducted. Presidents have to be squeaky clean with what they do and be open about what they do. These types of expenses are different from the benefits this survey is talking about.”

For example, Boggs noted that when he was president of Palomar College, in California, for 15 years, he had an automobile allowance. He also noted that he had a three-month sabbatical but that he was never able to find a time to take it. Palomar also paid for his membership to the local Rotary Club, he said, to ensure that he was a well-connected member of the local community. Otherwise, Boggs explained that he had the same health, disability and life insurance as his faculty and staff members.

“Benefits have to be customized,” Boggs said. “You have to have a salary and benefits package that can retain an excellent president. There’s competition out there to hire presidents, so you have to have a good enough package to stand out. Of all the benefits mentioned here, I’d made a particular case for the automobile allowance because the board expects a president to be traveling to attend meetings and to raise money. There’s a lot of travel involved. When I was at Palomar, that was one benefit I had that made a lot of sense.”

Rian M. Yaffe, CEO of the consulting firm that conducted this survey, had a slightly different philosophy from Boggs. He argued that boards should steer clear of offering too many benefits and, instead, focus on increasing presidential salaries.

“With everything in the public eye, there has to be a certain caution,” Yaffe said. “Boards, because of public pressure, tend to be careful of things like country club memberships and things like that. Everybody in the not-for-profit sector has to be careful about compensation because it’s public information. I think it’s preferable to have a salary in a reasonable range so that it can be nicely competitive. That’s a lot easier to defend that than some of these extra perquisites.”

Boggs speculated that community college presidents did not receive comparable salaries and benefits to their counterparts at four-year institutions because of the differences in their budgets. Additionally, he suspected that there may be some bias against leaders of community colleges simply because of whom they serve.

“It’s not fair,” Boggs said. “Community college presidents are operating very complex education enterprises that require of them a lot of expertise and a lot of hours. Their salary should be comparable to those of the heads of other nonprofit institutions –- such as hospital administrators and presidents of universities – that require a certain amount of expertise and have a similar degree of responsibility.”

 

 

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