Incoming president to university: Pay me less money

Excessive pay would send the wrong message, he says

The incoming president of University of Texas (UT) at Austin had an unusual demand during salary negotiations: cut his salary by about 25%, Kellie Woodhouse reports for Inside Higher Ed.

Gregory Fenves was originally offered seven figures to head the school, but he wouldn't take it. "$1 million is too high for a public university," he says. Instead, he negotiated his compensation down to $750,000 and reduced his annual potential bonus from 12% to 10% of the base pay.

Fenves explained that such a high salary would make it more difficult for him to do his job. "It will attract widespread negative attention from students and faculty given the difficult budget constraints of the past five years," he wrote in response to the initial offer. "With many issues and concerns about administrative costs, affordability and tuition, such a salary will affect the ability of the president to work with the Texas Legislature on matters important to the university."

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Fenves also noted that the lower salary was "highly competitive." As evidence, he cited $750,000 salary of Mark Schlissel, the University of Michigan's new president.

James Finkelstein, a public policy professor at George Mason University, says Fenves' approach is unique. "It's very, very unusual, especially with what's going on today with presidential salaries. They keep going up and up and up," he says.

However, Finkelstein also says Fenves will not be "underpaid by any stretch of the imagination." His predecessor, Bill Powers, who Fenves will replace in June, makes a base pay of $624,000 and $44,000 in additional compensation. Fenves will make $800,000 in compensation, plus a $100,000 performance bonus annually.

Making a point

Andrea Gore, the chair-elect of UT-Austin’s faculty executive committee, says Fenves' request is an effective way to build trust with the school's faculty and staff. "It can seem hypocritical for an administrator to take an enormous salary when people who are earning much lower salaries have not received significant—even cost-of-living—raises over the last several years," she says.

According to Woodhouse, Fenves may be trying to ease historic tensions with faculty and the state legislature over tuition increases, program choices, and affirmative action.

Bill Hammond, the CEO of the Texas Association of Business and critic of Texas' higher education overspending, says Fenves' decision to request a lower salary shows leadership. "The cost of higher education is a major concern, and he's playing his part in helping keep a lid on it… He's putting his money where his mouth is," Hammond says.

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Other leaders in the Texas system will be paid more than Fenves. Texas A&M University President Michael Young receives around $1.4 million in total compensation. And University of Texas Chancellor Bill McRaven makes $1.6 million.

While Gore, of the faculty executive committee, praises Fenves for making a savvy and politically sensitive gesture to the campus community, she says the faculty "wouldn't have given a second thought to him accepting a higher salary."

More broadly, Finkelstein says he doesn't expect Fenves' move to be a "catalyst for the larger conversation about executive compensation," adding "this is an anomaly right now" (Woodhouse, Inside Higher Ed, 5/14).

The takeaway: The incoming president of one public university negotiated a lower salary, arguing that making $1 million would have damaged his relationship with the campus community and state lawmakers.


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