Don’t get into the simplistic row about VC pay. It’s not “worth it”

There’s a few things that I find pretty frustrating about the “debate” over the salaries we give to vice chancellors.

Jim is an Associate Editor at Wonkhe

A new paper from HEPI today – which nicks its title from a 2019 paper on the determinants of  VC pay in the UK – grounds its argument that VC pay is “scapegoated” in a number of frames that deserve scrutiny.

I’ll try to set aside the clickbait here – it’s tempting, for example, to argue that the author’s line that says:

…every vice-chancellor I have met in over a decade of working with universities has been impressive

…surely just suggests a need to get out more?

But more seriously, significant comparisons are drawn, for example, with the US and Australia – where we find that UK VC pay is, on average, substantially less. But the absence of comparisons with Europe distorts the picture – as does the absence of community college salaries from the US comparison.

Another important “given” is the revenue/complexity mix, where the £2.2 billion annually in cash that rolls in, and the “enormous local, national and international influence” that universities have ends up naturally leading to a need for “high-quality leadership”.

For me those sorts of frames beg questions like – should all of that money flow through autonomous institutions? Should universities be responsible for all that we ask them to be responsible for? And would a cap on VC pay reduce the quality of leadership that we get?

I can make a decent argument, for example, that the frame that suggests that universities have to compete so much might be amended by reducing the level of competition required. It’s getting really quite difficult to identify arguments that prop up the idea that intense/further competition results in better teaching, research or student experience – and there are plenty around that suggest the opposite.

I can also argue that the old “universities do teaching, manage large estates, look after students’ welfare” complexity argument might cause us not to try to find folk that are amazing at running such complexity, but instead to reduce that complexity. Why are universities better landlords than, say, the collectively owned Student Welfare Organisations of Norway? Why would universities be better at mental health than a properly funded NHS?

In some ways UCU’s Jo Grady makes a similar mistake in her retort to the report on HEPI’s site:

It’s undeniable that the job of vice-chancellor is demanding and complex. It’s a high-stakes role that demands a particular skill set and a huge amount of dedication. The same can be said, though, for many other roles within a university that attract substantially lower rates of pay.

That’s not to say taking some of the absurd complexity out of an academic’s role would justify the pay they’re being held on now. But it is to say that that a chunk of that absurd complexity is unnecessary and adds to the overwhelm and burnout in the Ts and Cs portion of UCU’s arguments.

Back on the paper, it’s certainly true that some of the rhetoric around VC pay might be characterised as “divisive”. But I’m certainly not convinced that the Principal-Skinneresque “redoubling efforts to increase awareness of the complex roles of higher education leaders” is the answer – as if detailing the duties will somehow cause the public to think that the pay differentials between the plebs and producers are justifiable in the midst of a cost of living crisis.

I can also make the argument that the level of public funding flowing in and the level of influence (especially over place) flowing out is nowhere near matched by the levels of public accountability I’d like to see over all of that in a healthy, democratic society. And I’d start with separating out some of those functions rather than blithely assuming that “the university” as contemporarily constituted is the right vehicle for all that it does.

I’d also start to look at models which assume the VC is principally an academic leader, and find other ways of securing leadership over all of the other things they currently have in the in-tray – not particularly because of the salary issue, and more because I can find no evidence that VCs are experts in housing, social policy, estates management, urban planning, healthcare, catering and so on.

It’s also fairly undesirable to locate so much power and influence into single institutions and leaders, surely? The slippery conflation between academic freedom, academic autonomy, institutional autonomy and power concentration anchored in the UK’s international success and reputation is eternally vexing.

But mainly what I find frustrating more broadly is the often binary debate about the comparisons drawn between the “private” nature of activity and therefore leadership of universities (profit, competition and so on) and the public/charitable nature of the sector.

It’s frustrating because people tend to hurtle towards two corners – some suggesting that the former means we have to pay the big bucks to get the talent or UK HE will somehow wither on the vine, and the latter suggesting that leaders should be elected, entirely subservient to academic communities and paid peanuts.

However you look at it, universities are quasi-public enterprises and quasi-charitable. That’s a given I do accept – because becoming entirety “public sector” would be a problem for autonomy, and because university systems engage in activity that is private in nature to fund activity that is, in turn, public in nature.

As this piece on The Conversation (on Australian VC pay) explains, in a “real” market business, shareholders assert control by rewarding executives through salaries related to performance, creating an alignment of financial interests. But universities are quasi-market not-for-profit organisations, don’t have controlling owners/shareholders, and their governing councils don’t have the same financial self-interest as shareholders:

The vice-chancellor’s pay does not reduce their own profits. They might even prefer to pay their vice-chancellor over the odds because it makes their university look more prestigious. It also makes it less likely they’ll leave, saving them the bother of appointing a new one.

That leads me on a search for regulation or systems that recognise the duality of the character – and takes me to the Netherlands, where the “Wet normering topinkomens” act of 2013 was introduced to “combat excessive remuneration and severance payments” in institutions in the (semi)public sector.

The idea was to recognise that duality of character – striking a balance between the factors in play that are also reflected in wider legislative and governance arrangements. Under the WNT, salaries and severance are both standardised and made public, and those salary ceilings are indexed annually. That cap currently stands at about 200k Euros.

The country has been carefully phasing in the cap for a decade now – and I am also struggling to find evidence that the sky has fallen in, that top talent is leaving the country, that its system isn’t being well led, or that its universities are falling behind on international comparisons. In fact, in context, I increasingly find the opposite to be true.

7 responses to “Don’t get into the simplistic row about VC pay. It’s not “worth it”

  1. For me the strongest arguments against high pay for bosses in universities and elsewhere is that it is so much more than the median pay of employees in the organisation (UK vice chancellors were paid 7.3 the median of university staff in 2021/22), and that this has increased substantially since the 1990s.

  2. The VC pay debate is a truly strange one, both for the reasons you have outlined in the article, but also because high pay seems to be seen as a generally ‘good thing’ in other industries, but not sectors like HE. I do understand the points about public/private and so on, but I am not sure that that makes VC pay so particularly egregious. Surely all Chief Executive pay is scandalous or it isn’t? Maybe it makes sense to think about that first and then consider whether public sector or quasi-public sector individuals should or shouldn’t attract similar levels of pay?

  3. While I was a VC (1997 – 2013) the press began to publish league tables of VC salaries. Few institutions and fewer VCs wanted to appear to be below average, so salary levels increased. I am in favour of transparency, but larger salaries are its consequence, as they are of larger egos.

  4. Mary Synge in her 2023 book on universities as charities and the application of charity law to their governance/management makes a cogent case for VC excessive pay being a breach of trust and hence of charity law – as Jim alludes to in making the point that Us are charities (except, of course, the few commercial for-profit ones). I doubt Council/Board members as the trustees of the charity can make an intellectually credible evidence-based case for salaries above, say, £350k.

    1. Indeed, though this is putting it rather mildly. I have yet to see an intellectually credible evidence-based case for anyone earning more than twice the average wage, let alone twenty times. I just don’t understand why these people think they are so much better than the rest of us!

  5. If you removed the non academic stuff from a vc then you’d need a committee of several people collectively running different sections of the university surely, which without a CEO style person above is a recipe for indecision and inertia…? And it probably wouldn’t be any cheaper either.

    I still don’t really understand the outrage over vc pay. It’s not that much compared to equivalent sized organisations and despite the tedious ucu rhetoric it’s a drop in the ocean in uni finances.

    I’ve never quite understood how Jo Grady feels able to mouth off about excessive pay when she has basically a glorified comms frontperson role in ucu with no actual power, and takes in over 150k a year.

  6. Some salient points made above. However we don’t exist as a single country without outside influence. Australia, Canada and US VC’s/Presidents all earn much higher amounts ~£750,000 is not unusual, $1.5M Aus. Recruiting one of our former VC’s who came from Aus was very cost by the time all his travel & moving costs, and golden F’off to get rid of him early. IF we’re going to recruit VC’s internationally we have to pay them on a comparable basis. What we also need is comparable pay for everyone else to match, in Canada I’d be on 50% PLUS more than here, same for Aus and USA! UK University staff have been being paid less and less year on year, forget the annual increment that UCEA include in their ‘headline’ pay ‘rises’, for those at the top of grade it’s an annual pay cut.

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