Paying our Presidents: What do Trustees Value?

[Excerpt] Our study makes use of data from a panel of over 400 private colleges and universities on the salaries and benefits paid to their presidents. These data are reported annually to the Internal Revenue Service on Form 990 by the institutions. The data have been collected by, and reported in, the Chronicle of Higher Education for academic years 1992-93 through 1997-98.7 We use these data through 1996-97 and merge them with data from a number of other sources including the American Association of University Professors, the American Council on Education, Who’s Who in America, the National Association of College and University Business Officers, the Council on Aid to Education, and the National Science Foundation’s CASPAR system. This permits us to estimate salary and compensation level and change equations. The plan of our paper is as follows. We begin by providing some descriptive statistics on the compensation and mobility of American private college and university presidents, as well as on their personal characteristics. The next section estimates a model of the determinants of presidents’ salary and compensation levels. We then exploit the longitudinal nature of our data and present analyses of presidents’ salary and compensation changes. A brief concluding section summarizes our finding