The first relates to principals. Bachan and Reilly (Citation2015) found that UK elite university VCs tended to be paid more than their less prestigious counterparts. Emeritus Professor James Guthrie AM, Professor of Accounting, Macquarie Business School, Source: 2019-2021 Annual and Financial Reports, Note 1: salary bands were disclosed in annual reports, the high end of the pay has been used for the table. /Contents 27 0 R /Resources << In 2018-19 vice-chancellors received nearly 350,000 (A$635,000) on average. The UCC needs to make good on its promise to support member Universities in this transition through: * provision of best practice templates for the reporting of remuneration. /Rotate 0 However, independent academic analyses have consistently found no convincing evidence of a relationship between VC remuneration and performance and that the very significant increases since the 1990s are more likely to be the result of benchmarking in a case of [k]eeping up with VC Jones (Gschwandtner & McManus, Citation2018, p. 1). However, that literature does not address, because the methodology is unsuited, the governance factors that determine the allocation of remuneration. The escalation of VC remuneration in this context suggests rent-taking. A private sector CEO would be looking for new revenue right now.". In January, we were delighted to welcome the Hon Julie Bishop to our University's most senior office: the first woman appointed Chancellor of ANU. /ProcSet [/PDF /ImageC /Text] While most, but not all, vice-chancellors took pay cuts during 2020 in solidarity with staff, there is no evidence that vice-chancellors pay reflects the performance of their university. The couple tied the knot in 1992. Traditionally, Australian and UK universities practised collegial governance of a stewardship nature (Duderstadt, Citation2004). Those highlighted affects year-to-year remuneration comparisons, assumption that the years highest remunerated officer was the VC. That was pretty bad. You dont create Rome in a day. This is a clear failure of university governance and appears to have enabled VCs to secure remuneration for themselves at levels that exceed that which would serve as an appropriate reward necessary to ensure the appointment and retention of suitably talented people. He is also the Director of the Grattan Institute, Melbourne Business School and the Melbourne Theatre Company . Nosh, Shop 155-12, University Avenue, Kambri Precinct, ANU, Canberra ACT 2601, 2 x poke party bowls, $14.90 each1 sparkling water, $31 kombucha, $4.90. This analysis only accounts for the earliest . Flavio Brancaleone. 8 0 obj << . But what is the incentive for me to do this? In the context of corporatised public universities, we consider how reforms in university governance may have contributed to the shifting nature and levels of vice-chancellors remuneration in Australia and the UK. 7 0 obj While any remuneration for board memberships is not disclosed, non-executive directors of large publicly listed companies such as CSL can receive in the vicinity of $1,000,000. /Font 49 0 R 2022-02-22T13:09:18+01:00 But even when I went to Harvard for my PhD, I met students who had been to the very best, most expensive private US schools. (Grove, Citation2018). >> /Type /Page Further self-imposed reductions during last year have almost certainly made him the lowest-paid, with a base salary of $484,000. 2022-08-01 There were 22 changes to vice-chancellor appointments in these three years. In 1994, it required universities, as with private firms, to declare senior staff remuneration in their annual financial accounts (Baimbridge & Simpson, Citation1996) (a requirement mirrored in Australia). This is unsurprising in Australia their average pay at the 37 public universities topped A$1 million in 2019. Jensen and Meckling (Citation1976) posit two ways to mitigate this problem. Julie Hare is the Education editor. % The Tribunal (Citation1974) found they were well paid in relation to equivalent roles elsewhere in society, a view unpopular with the then Australian Vice-Chancellors Committee and some individual VCs who protested that the tribunal risked undermining universities independence and should be abolished (Academic Salaries Tribunal, Citation1974). 2022-02-20T17:38:29+01:00 In the UK, VCs remuneration has had to be disclosed in universities annual reports and accounts since 1994, and is collated annually by The Times Higher. /Font 29 0 R Not directly comparable: 2017 and 2016 figures not directly comparable because of vice-chancellors starting or ending their terms mid-year. Rather than be the head of the organisation who seems completely disconnected, it is really important, in my opinion, for the vice-chancellor of a university like ANU, to be seen as part of the professoriate. UK university council members are currently volunteers and are not remunerated. Vice-Chancellor Salary Packages (Archive 2017) University VC Name Salary Package ($) University of Sydney: Michael Spence: 1,445,000: Australian Catholic University: Greg Craven: Accordingly, this article advances understanding of the issue by exploring the dynamics of VC remuneration in the context of governance changes in universities as they have become progressively marketised. The government pushes freedom of speech and foreign interference agendas, but shows little interest in the role of universities in producing the next generation of doctors, nurses, lawyers, diplomats, architects, engineers, teachers and social workers. We use cookies to improve your website experience. Universities in the US disclose salaries for leading staff by name in exact amounts. Toward a stewardship theory of management, Compensation benchmarking, leapfrogs, and the surge in executive pay, CEO governance and shareholder returns: Agency theory or stewardship theory, Governing the twenty-first century university: A view from the bridge, Silent escalation: Salaries of senior university administrators in Ontario, 19962006, Changing patterns of governance for Australian universities, Reporting on vice-chancellor salaries in Australias and the United Kingdoms media in the wake of strikes, cuts and falling performance, Theory of the firm: Managerial behavior, agency costs and ownership structure, Chief executive pay in UK higher education: The role of university performance, An assessment of agency theory as a framework for the governmentuniversity relationship, Australian universities top world rankingsfor VC pay, The political economy of the rent-seeking society, Rank order tournaments as optimum labor contracts, Changing cultures in UK higher education: The state as corporate market bureaucracy and the emergent academic enterprises, Executive compensation as a corporate governance problem, Agency theory: Review of theory and evidence on problems and perspectives, The economic theory of agency: The principal's problem, Pay developments in Britain and Germany: Collective bargaining, benchmarking, and mimetic wages, University governance in flux. /MediaBox [0 0 595 842] Davis et al. Although Australian universities have always set VCs remuneration autonomously, from 1976 until 1986 the Academic Salaries Tribunal made recommendations for VC remuneration levels using a two-tier system that differentiated the research elite from the rest. /Font 22 0 R The problem is council members dont have the same financial self-interest as shareholders the vice-chancellors pay does not reduce their own profits. From there he moved to the University of Arizona, where, hating the bacchanalian, Roman orgy-like culture (it was just gross), he simultaneously did two undergraduate degrees in physics and astronomy before undertaking a PhD at Harvard. Rent (Smith, Citation1776/Citation1937), in economic terms, is the extraction of financial value through ownership or control of an asset without simultaneously bringing any new wealth into existence; rent is therefore differentiated from profit. /ExtGState 18 0 R However, there is evidence from the estimated year effects that even after controlling forobservable and unobservable factors, there have been sizeable annual increases in real VC pay in the years covered by our analysis that are not readily explainable. Australian National University vice-chancellor Professor Brian Schmidt. Stewardship was the dominant governance form until the twentieth century (Donaldson & Davis, Citation1991, p. 22). Roles of Review Committee Members and Secretariat 8.1 Chair. Murray also recommended that universities be funded by specifically targeted recurrent triennial grants from the federal government, distributed via the states. In fact, Sydney University increased the number of students who were willing to learn online from China. /XObject 45 0 R << Australia and the UK experience regular annual outrage over vice-chancellors' pay. 2021: $1.213m. The NTEU said that academic salary increases had ranged from 4.5 per cent at one university to zero at five others, with the timing of enterprise negotiations affecting some pay rises. We both remember the interaction.. When universities are challenged about these salary packages, they say vice-chancellors run complex businesses in competitive global markets, and their salaries reflect the work done and results achieved. /Rotate 0 There is evidence that such deductions were subsequently made on a number of occasions (Academic Salaries Tribunal, Citation1985). Over the past 30 years, Australian and British universities have been marketised, emulating private-sector for-profit organisations. The resulting rethinking of governance led to the popularisation of contract and market-based agency theories (Jensen & Meckling, Citation1976). True Adapted from Gschwandtner and McManus (Citation2018, Table 1, p. 7). Im more careful with my words than I used to be. In 1987, the first of a series of federal industrial pay awards was introduced, continuing the centralised setting of employment conditions and salaries. /Rotate 0 Million-dollar-plus salaries are a PR problem with the government and the general public. The international student sector, which props up Australian universities and their research efforts, started collapsing after borders were hastily closed last February. Recognition Schmidt accepts the 2011 physics prize at the Nobel award ceremony in Stockholm. endobj Savage cuts to university budgets from 1981 led the non-statutory Committee of Vice-Chancellors and Principals (now Universities UK) to establish the Jarratt Committee with Sir Adrian Cadbury, a significant figure in corporate governance reform, as a member. They do have governing councils, which are legally recognised as principals. Table 2 indicates the increases between 2007 and 2015 which included the Global Financial Crisis and UK austerity policies. Governments could act as de facto principals because universities are public bodies of which they control the purse strings. Rent-seeking points to a significant breakdown in university governance. University councils, which appoint remuneration committees, may therefore be insufficiently powerful or insufficiently self-interested as principals to control the process adequately. We first conceptualise remuneration and argue that its form and size are determined by organisations social, economic, legal and structural dynamics, formalised through regimes of endogenous and exogenous governance control (Marginson & Considine, Citation2000; Rowlands, Citation2017). Bill would bind vice-chancellors' salaries to state premier's pay . /ExtGState 44 0 R I stick by the analysis done in 2013 (and quoted many times in the THE). A voluntary code agreed by the Committee of University Chairs [of councils] in 2018 (CUC, Citation2018) had declared it inappropriate for VCs to be members of their remuneration committees but that they could attend providing they were not present when their own salary was discussed. As in Australia, these increases are not indicative of general remuneration increases in the sector. (Bachan & Reilly, Citation2015, p. 70). Award winners will be celebrated during a reception at the UC Tech. But for me, wanting to be connected to my staff, and not actually caring about money, that is a good way of expressing it to my staff. They just keep going for more contracts and more casualisation, she said. OK, there was the bubonic plague back in 1665. He applied for the only position available at Stromlo. He was born in the north-west US state of Montana and was an only child. SolenSoftware Actavia 3.4 (Journal system) /Contents 39 0 R Australian vice-chancellors join the millionaires' club We now examine the dynamic governance regimes of Australia and the UK with regard to VC remuneration. Teaching went online. https://doi.org/10.32725/det.2021.023 In private firms such disclosures are designed to discipline agents towards not exploiting information asymmetries by highlighting their share of finite organisational resources. Professor Smith said Australian vice-chancellors should be benchmarked against leaders at leading British and US universities, who are paid less. The role of the Academic Salaries Tribunal means that Australia has a relatively well-defined point at which VC salaries were deregulated and the effect of this can be demonstrated empirically. This tends to generate a race to the top pay rises in one university ripple through the others. If anything it's more attractive to come to Australia," Professor Smith said. For example, York, where an interim Vice Chancellor in the previous year and relocation costs for the new Vice Chancellor pushed the total pay for 2019-20 up by 64,771 on the year before. /Pages 2 0 R 8. https://creativecommons.org/licenses/by/4.0/ >> Were working to restore it. For instance, a vice-chancellor may start in May and have eight months of remuneration recorded. In real market businesses, CEOs hold a lot of power, including the power to enrich themselves at the cost of the dividends paid to shareholders. From the 1960s this role was undertaken by the Universities Authorities Panel and, from 1987, the Universities and Colleges Employers Association both employers associations (Rani, Citation2009). Note 2: the majority of universities disclosed vice chancellor salary under the section Remuneration of Executive Officers/Key Management Personnel. $100 million a year, still wouldnt do it. DETUROPE - The Central European Journal of Tourism and Regional Development These jobs are hard because in the non-Group of Eights you have command and control, he says. Gordon, in the meantime, applied for six jobs and was offered all of them. /Resources << Professor Smith said vice-chancellor pay got out of line after universities were amalgamated in the early 1990s, creating institutions with up to 60,000 students. Dr Spence's estimated salary is $1.6 million but the UCL president earned $736,000 in 2018-19. By 2020, Australia had 39 self-governing and self-owning publicly funded universities. 4 0 obj After 1945, the University Grants Commission (which channelled government funding) determined salaries and pay scales in consultation with the academic union. But he said that it would be simplistic to attribute the trend to pure greed. Benchmarking therefore casts an aura of market-based objectivity, but is essentially self-fulfilling (Essaji & Horton, Citation2009). Additional short and long-term at risk remuneration may be offered but always against clear, measurable targets to be delivered over and above the base remuneration. University Councils then aligned VC pay with private sector companies with similar numbers of staff. 1 By vice-chancellor we mean the chief executive officer of universities. Using this, Bachan and Reilly (Citation2015) found that VCs enjoyed remuneration growth of 59% in real terms from 1997 to 2009. Turning to the highest paid vice-chancellor in Australia, The University of Melbournes Professor Duncan Maskells salary is $1,469,999, a pay cut of $44,000 from 2020. which was ranked second in the QS World University rankings this week. This article critically considers the determination of vice-chancellors remuneration as a governance issue. 19 0 obj He said when Sydney University vice-chancellor Michael Spence leaves Australia next month for UCL university in London, he will be taking a salary cut of more than 50 per cent. Through Freedom of Information Act requests, the UK University and College Union found that, in 2018, 95% of VCs were either members of the remuneration committee that set their own salary or were entitled to attend meetings (Weale, Citation2018). Campus Morning Mail is an independent newsletter written and published by Stephen Matchett, formerly a long-serving journalist at The Australian newspaper. Until the 1990s, academics were the primary collegial decision makers and VCs were primus inter pares (Marginson & Considine, Citation2000; Shattock, Citation2017). 130 Finally, stewardship is marked by lower power-distance relationships than agency, with flatter, less hierarchical organisations (Davis et al., Citation1997, pp. And when salaries are not justifiable by performance, they can be said to constitute rent an economic concept that means extracting an unjustified level of resource from an organisation as a result of ownership or control. The Australian market is way out of whack with the rest of the world but fundamentally the market does work. /Contents 30 0 R * sharing experiences of implementation and ongoing refinement of governance and reporting. The only thing on its research agenda is commercialisation, which, if we are honest, is never going to fill the coffers that have been emptied by absent international students. That's after adjusting for a COVID-related reduction to his current pay and despite UCL rating higher than Sydney University on global rankings. All my excess money I donate.. For example, in 2018, the Australian Catholic Universitys VC was paid AUD $1,325,000 [726,633,000], exceeding the salaries at some more prestigious universities. Profits accrue to those who own the means of production as a reward for risking capital. Our position descriptions also list a contact person for job specific enquiries. This signals that for some universities broader capabilities and expertise is being sought in the vice-chancellor role. A bill put before the SA parliament last October sought to tie vice-chancellors salaries to that of the premier. 2. This weakens the argument for linking vice-chancellor pay to university academic or professional staff.. The estimated total pay for a Assistant Vice Chancellor at Vanderbilt University is $148,517 per year. As a result of this flawed governance framework, universities usually allow vice-chancellors to be members of, or at least attend, the remuneration committees that set their pay. The econometric literature also explores the role of remuneration setting tools. Click here for the Complete List of Vice-Chancellor Pay & Salary Packages At Australian Universities. Schmidt is garrulous; his Montana drawl tamed by 30 years in Australia. There is no real strategic option other than to put their hand out to government every week, asking for a bailout.. This suggests governments could, for instance, require maximum xed ratios between vice-chancellors remuneration and average academic salaries. Purpose and Objectives. /MediaBox [0 0 595 842] Your name The package of the average female university leader, which stood at A$900,000 last year, and was increasing less quickly, is set to pass A$1 million in 2020. Top 10 Vice-Chancellor Salary Packages AUD$, Please prove you are human by selecting the, Copyright 2015 - 2021 Australian Education Network - All rights reserved, Complete List of Vice-Chancellor Pay & Salary Packages At Australian Universities, List of Vice-Chancellor Pay & Salary Packages, Revenues and Surpluses At Australian Universities, Historical Development of Australian University Sector, University Bachelor Degree Completion Rates, QS Employability Rankings Australian Universities, ARWU World Rankings of Australian Universities, Top 10 Highest Paid Vice-Chancellors @ Australian Universities, ARWU World Rankings of Australian Universities Group of Eight (go8) World Rankings. Gschwandtner and McManus (Citation2018) also utilised this data, reporting that, between 2007 and 2015, VC remuneration rose by 20.6% in real terms. There was cost-cutting across the board, voluntary redundancies; prudent fiscal measures were put in place, given the level of uncertainty to the higher education sector and given the minimum financial support that came to the sector, particularly from the federal government, he said. Following Jarratt, the government established a series of national funding councils that allowed it to steer universities at a distance using financial levers (Shattock, Citation2012). DETUROPE - The Central European Journal of Regional Development and Tourism 2021, 13(3):130-141, doi: 10.32725/det.2021.023. >> << When a vice-chancellor is paid twice the salary of the prime minister, it does seem something is a bit wrong, said Mr Norton. That power is expressed through ANUs seven deans. To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy. /ProcSet [/PDF /Text] Australia and the UK experience regular annual outrage over vice-chancellors pay. /Type /Page One is for a rally protesting against course cuts. Hes too busy talking to eat quickly. Governance regimes determine remuneration forms and their allocation between potentially competing groups, reflecting organisational power dynamics (Neokleous, Citation2015). We discovered the accelerating universe to our satisfaction on January 8, 1998, seven days later, Schmidt says. Another emerging trend is the removal of annual incentives, Ms Anderson said. /Contents 36 0 R But Melbourne University emeritus professor Frank Larkins said vice-chancellors high salaries reflected the increasing demand that Australian universities operate like businesses, including chasing ever more revenue from international students in order to fund their operations and cross-subsidise research. This arrangement came to an abrupt end in the 1980s under Margaret Thatchers governments (Shattock, Citation2006). From 1974 until 1986, the national Academic Salaries Tribunal determined Australian academic staff salaries centrally (Marginson, Citation1989). Permission is granted subject to the terms of the License under which the work was published. /Length 62 0 R >> The changing landscape of VCs remuneration in Australia and the UK, https://doi.org/10.1080/07294360.2020.1841741, https://www.theguardian.com/education/2019/jun/20/vice-chancellors-still-attend-pay-meetings-despite-outcry, https://www.theguardian.com/education/2018/mar/11/university-vice-chancellors-are-paid-far-more-than-public-sector-peers, https://doi.org/10.1111/j.1475-5890.2015.12045.x, https://doi.org/10.1080/13583883.2006.9967175, https://doi.org/10.5923/j.ijfa.20140304.04, http://www.ecgi.org/codes/documents/cadbury.pdf, https://doi.org/10.1007/s11162-014-9328-9, https://www.universitychairs.ac.uk/higher-education-remuneration-code-2/, http://www.educationengland.org.uk/documents/jarratt1985/index.html, https://doi.org/10.5465/amr.1997.9707180258, https://www.afr.com/news/policy/budget/simon-birmingham-attacks-university-vicechancellors-1m-salaries-20170501-gvw3lg, https://doi.org/10.1177/031289629101600103, https://doi.org/10.1007/s10734-009-9249-2, https://doi.org/10.4284/0038-4038-2011.215, https://www.timeshighereducation.com/features/chalk-it-oversight, https://blogs.kent.ac.uk/economics/2018/05/24/university-vice-chancellor-pay-performance-and-asymmetric-benchmarking/, https://doi.org/10.1080/07294360601166786, https://doi.org/10.1080/13603124.2019.1631387, https://www.hesa.ac.uk/data-and-analysis/finances/table-11, https://doi.org/10.1016/0304-405X(76)90026-X, https://doi.org/10.1007/s10479-019-03275-2, https://doi.org/10.1080/13600800802383018, https://junkee.com/university-vice-chancellor-salary/143593, https://www.smh.com.au/politics/federal/the-nation-s-highest-paid-university-leaders-20180826-p4zztd.html, https://www.msci.com/documents/1296102/7330587/Research_Insight_Out_of_Whack.pdf/46baa603-a503-42c1-91c0-d0ef19b754b2, https://www.officeforstudents.org.uk/advice-and-guidance/regulation/senior-staff-pay/, https://www.academia.edu/4029657/Determination_of_academic_pay_in_universities_and_colleges_in_UK_under_the_new_pay_framework_the_policy_and_practice, https://www.timeshighereducation.com/news/three-four-australian-v-cs-take-pay-cuts, https://www.timeshighereducation.com/news/average-australian-v-c-pay-packet-may-top-a1m, https://doi.org/10.1111/j.1468-2273.2008.00384.x, https://www.theguardian.com/education/2018/feb/15/majority-of-university-leaders-involved-in-setting-their-own-pay, Mid-level teaching and research university, New dual sector (established mid-1990s) university. Johnes and Virmani (Citation2020) also note this rise, which accelerated when full student fees were introduced in 2011 as part of the further marketisation of universities. If they lose confidence in you, its game over. On the basis of the data presented in this article, we argue that it may also explain, at least in part, the escalation of VC remuneration in Australia and the UK. They generate strategic direction and that equals value creation," said Professor Smith who is the head of the Department of Applied Finance at Macquarie University. Governors do not want to go through the hassle of appointing a new vice-chancellor, so they make sure they give [the existing one] a little more each year. Consequently, the federal government established the Australian Universities Commission, which centrally determined [p]retty much everything on funding (Forsyth, Citation2014, p. 129). She said some recent appointments had been made from outside the academic sphere. Analysis by The Australian Financial Review reveals that in 2021 at least 11 vice-chancellors received $1 million-plus salaries while making huge cuts internally, slashing staff numbers and putting infrastructure projects on ice as closed borders threatened the international student market. If universities are indeed publicly owned and operate in the public interest, then greater transparency and accountability about vice-chancellors salaries are necessary. The UK has a similar history to Australias on the setting of academic staff salaries. As such, they dont have controlling owners/shareholders. 3536). << Im spinning out companies, but it takes time. You are done. People forget that the private school phenomenon is very much an Australian thing. Most universities had awarded increases of between 1 per cent and 3.5 per cent, it said. They say they want universities to be less reliant on China and international students. /Type /Pages During our lunch, Schmidt tells me more than half a dozen times that being a vice-chancellor is hard, really hard. Professor Maskell's pay package rose by about $20,000 to a range between $1.5 . All my excess money I donate. /Type /Page It also gets him an invitation to Davos every year, which he accepts. Jenny Anderson, reward lead Education & Research, at Mercer said there was a noticeable trend of restraint in the remuneration packages of new vice-chancellors compared to their predecessors. >> C`fTmZK M(VePt5PT@9\AUVmk}K PeC?PR0m+Lw8^+NQL%KwU)7XRfBFe I%>~n+&:Sf2osq4 )u`iTnc^j1ZUhO5myv$ZkK3gHz{anw/i+KsY94[f M|6wjl-i@_^UV#}Uwh s;mIp'N}|fi;eT As Table 2 starkly reveals, this ratio has increased very considerably since then. endstream These posts are also variously named president, principal or rector. From 1976 to 1986, the Australian government set recommended maximum salaries for vice-chancellors. Former Victoria University vice-chancellor Peter Dawkins, who stepped down this year, received a pay rise of more than $100,000 and had a full salary of $849,000 last year, but he also donated his increase to a fund for students in hardship. /ProcSet [/PDF /Text] The present regulator, the Office for Students notes that it does not have legal powers to regulate the pay of senior staff in the higher education sector directly but does acknowledge that it has a duty to take into account the value for money higher education providers offer for the public money they receive (OfS, Citation2020).
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