Monday, December 14, 2015

Why are university bosses paid so much?


Times Higher Education (THE) has an article by Ellie Bothwell about the earnings of university heads in the USA and the UK. The US data is from the Chronicle of Higher Education.

The sums paid are in some cases extraordinary. Maybe Lee Bollinger of Columbia deserves $4,615,230 but $1,634,000 for the head of Tulane?

On the other side of the Atlantic the biggest earner is the head of Nottingham Trent University. To the lay reader that makes as much sense as the manager of Notts County or Plymouth Argyle outearning Manchester City or Chelsea.

THE argues that there is little correlation between the salaries of the top earning twenty American and British university heads and university prestige as measured by position in the overall THE world rankings.

It would actually be very surprising if a large correlation were found since there is an obvious restriction of range effect if only the top 20 are considered. If we looked at the entire spectrum of salaries we would almost certainly get a much greater correlation. I suspect that THE is trying to deflect criticism that its rankings measure wealth and age rather than genuine quality.

THE do not give any numbers so I have calculated the correlation between the salaries of the US heads and overall scores in the brand name rankings. Maybe I'll get round to the British salaries next week.

The Pearson correlation coefficient between the salaries of the 20 most highly paid university heads in the US and overall THE world rankings scores is only .259, which is not statistically  significant.

The correlation is greater when we compare salaries with the US News (USN) America's Best Colleges and the Shanghai Academic Ranking of World Universities. The top 20 US salaries have a .362 correlation with the overall scores in the 2015 America's Best Colleges (not significant) and .379 (significant at the 0.05 level [1 tailed]) with the total scores in the 2015 ARWU.

That suggests that American university heads are recruited with the object of doing well in the things that count in the USN rankings and more so in the Shanghai rankings. Or perhaps that the THE rankings are not so good at measuring the things that the heads are supposed to do.

Of course, if we looked at the whole range of university salaries and university quality there would probably be different results.

By the way, there is almost zero correlation between the top 20 salaries and university size as measured by the number of students.


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