Results from the Yaffe & Company Executive Compensation Survey for Colleges and Universities
Yaffe and Company, Inc. conducted its inaugural national Executive Compensation Survey for Colleges and Universities in November 2006. A total of 190 institutions provided compensation and benefit information for 8 executive positions. This active participation reflects a real need for this information within the higher education community. As such, we will continue to conduct the survey on an annual basis. There is no fee to participate and a complimentary report is provided to each institution that completes the survey questionnaire.
Outlined below are some very interesting survey results for the President, Chief Academic Officer/Provost and the Chief Financial Officer positions.
Age, Service and Compensation Components
Poisition | Average Age | Average Years of Service | Variable Pay Opportunity | Retirement Plan Provided | Deferred Compensation/SERP Offerred |
President | 57 | 7 | 32% | 95% | 22% |
Provost | 52 | 4 | 16% | 94% | 5% |
CFO | 51 | 7 | 11% | 97% | 6% |
- 50% of the Presidents are 60 years of age or older, but only 11% have 15 or more years of service in their current position. Potentially a large number of colleges and universities will be experiencing the retirement of their Presidents in the coming years so Trustees need to be anticipating and planning for the orderly succession of this leadership position. Competition for the best talent within the higher education community may be heightened, so it may be in the best interest of the institution to look internally and begin identifying and grooming a successor. Similar issues face the Provost position, although it is not quite as dramatic.
- The average length of service for all of the executive positions is relatively short. In fact over 73% of the Presidents and 84% of the Provosts have less than 10 years of service in their current position. Couple this with the low use of a variable pay component and there may be an opportunity to tie a portion of the executive's compensation to the achievement of specific goals. The use of a variable component may be a tool that could extend the length of service while providing an incentive for increased compensation.
- Although most executives are included in a qualified retirement or tax sheltered annuity plan, typically there are contribution thresholds that may minimize the value of this benefit. A Supplemental Executive Retirement Program (SERP) may be appropriate in specific situations and could lead to higher retention rates for executives. Currently, this benefit is used infrequently.
Average Base Salary by Student Enrollment
Position | < 2,000 Students | 2,000 - 4,900 Students | 5,000+ Students |
President | $189,000 | $259,000 | $372,000 |
Provost | $113,000 | $158,000 | $245,000 |
CFO | $109,000 | $156,000 | $243,000 |
- Schools in the Northeast tend to have higher Base Salaries for all positions.
- The President's Base Salary had a wide range. As an example, we examined the base salary range between the 25th and 75th percentiles. Schools with less than 2,000 students had a President's salary of $151,000 for the 25th percentile versus $225,000 for the 75th percentile. A similar difference in the percentiles was also evident for schools with student enrollment of 2,000 - 4,999. Schools with over 5,000 students had a significantly larger salary range between percentiles.
- Because of the low use of Variable Pay, Base Salary and Total Compensation are very similar for schools with a student enrollment of less than 2,000. For schools with a larger student enrollment, Variable Pay is used more often, especially for the President. This resulted in a difference that was a little more pronounced between Base Salary and Total Compensation.
- # In addition to student enrollment size, our survey examined executive salary based on revenue, endowment market value and basic Carnegie classification.
Selected Benefits
Position | Housing/Allowance | Auto/Allowance | Eligible for Sabitcal |
President | 80% | 77% | 45% |
Provost | 13% | 7% | 25% |
CFO | 3% | 7% | 8% |
- The survey looked at a wide range of benefits offered such as healthcare, long term disability and club memberships for each position. The benefits illustrated above are a sampling of those surveyed.
- The majority of schools offer the President both housing and a car or an allowance for each. The other executive positions are significantly less likely to receive these benefits.
- The President and the Provost were more likely to be eligible for a Sabbatical than the other executive positions surveyed.
Yaffe & Company is here is to help Trustees with their executive compensation needs. Our unique process complies with all IRS requirements for independence, accountability, disclosure and documentation. Consequently, executives are compensated competitively which leads to higher retention and Trustees have a process that meets public scrutiny while feeling secure in knowing that all regulatory requirements have been met. If you need assistance in reviewing your current governance principles, Yaffe & Company can help. Please contact us for the complete survey results or for more information.