VC pay: way high and a way to contain it

In sum, rapidly rising VC remuneration is not strongly correlated with performance,” suggest Rebecca Boden (Uni Tampere, Finland) and Julie Rowlands (Deakin U)

In a new paper they estimate a research uni VC was paid 2.9 more than a lecturer in 1975. By 2018 it was 16.

Why the multiplier used to be modest: From ’75 to ’86 the Academic Salaries Tribunal set VC pay, which the feds used as a ceiling – there were cases Boden and Rowland suggest, where unis which paid VCs more had the over-award amount deducted from Commonwealth funding.

But now VCs are paid a poultice: The authors suggest there are two reasons, neither of which is performance.

One is that members of university councils have no skin in the pay game, have “empowered VCs to act entrepreneurially” and do not have enough authority to control the salary setting process.

The other is there are VCs who sit on their universities remuneration committee. “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,” Boden and Rowlands suggest.

Which is not good for uni governance: “To the extent that salaries are not justifiable by reference to performance, they can be said to constitute rent. … Rent-seeking points to a significant breakdown in university governance.”

But there’s a solution: They suggest Australia could return to government over-sight of VC salaries, with fixed ratios between their pay and mean academic salaries.

“Decisive steps to limit VC remuneration would assist in restoring faith in the university sector at a time when this is arguably most needed,” Boden and Rowlands suggest.