Compensation earned by the presidents of Montana’s two largest universities remains on par with other schools in the region, though it’s well below the national average, according to figures compiled by the Chronicle of Higher Education.
The Chronicle released the figures earlier this month, reviewing the pay and compensation for 212 chief executives at 191 public universities and systems across the country.
In a side-by-side comparison, the study found that four university presidents — at Penn State, Ohio State, Auburn and George Mason universities — now earn more than $1 million a year, up from three a year ago.
It’s a rising number that has some in the Montana University System alarmed.
“When you talk about some of these large urban areas, we’re outgunned,” said Todd Buchanan, a member of the Montana Board of Regents, based in Billings. “Our budget is smaller, but our desire is just as high. We’re lucky to be able to afford the university system we’ve got.”
The average compensation for leaders of public universities across the U.S. climbed 4.7 percent over the past year, reaching $441,392, according to national figures.
University of Montana President Royce Engstrom’s total compensation of $360,505 placed him 153rd among college presidents on the list. Montana State University President Waded Cruzado-Salas ranked 167th, earning $335,173 in total compensation.
Both presidents took command of their respective universities in 2010. Their base pay of $283,300 climbed 2.2 percent in October 2012 to $289,466, according to Montana University System figures.
Kevin McRae, associate commissioner of communications with the Office of the Commissioner of Higher Education, said both presidents were offered a base pay of roughly $280,000 when they were hired.
The discrepancy in their compensation package, he said, stems in part from benefits gained through life insurance policies carried by the school’s respective foundations.
“Both of them receive the exact same retirement benefit,” McRae said. “But part of it is funded through a term life insurance policy, and because (Cruzado-Salas) is younger than (Engstrom), the amount is a smaller payment. The benefit they’ll receive is identical, but the funding is slightly different.”
McRae said that when former UM President George Dennison and former MSU President Geoffrey Gamble retired in 2010, regents were surprised at the competitive costs of securing strong administrative leadership.
Dennison had served roughly 20 years on the job, while Gamble served around 10 years. During their tenure, raises offered through the Montana University System didn’t increase at the national rate, McRae said.
“The regents knew that when those two jobs opened up and we had to go out on the market, we’d be in for some sticker shock,” McRae said. “Regents and the university system feel and believe that our presidents are well compensated for the difficult and important job they’re assigned to do. It’s a national and international market within which we compete.”
Buchanan expressed mixed feelings about the cost of recruiting administrative candidates to lead the state’s flagship universities. He said Montana has been successful in recruiting strong leaders and, like McRae, he noted the round-the-clock demands of the job.
But at the same time, Buchanan said the costs of competing for quality leaders and faculty continue to climb exponentially, threatening to drive up the cost of higher education in Montana and beyond.
He believes the rising trajectory in pay is a losing recipe and one that Montana won’t be able to compete with for long. In past years, Buchanan has served as the dissenting vote among regents on approving administrative pay and compensation.
“I’m not comfortable with the growth in administrative expenditures,” Buchanan said. “I’m afraid if we’re not already, then we’re getting pretty darned close to pricing people out of higher education. Administrative expenses are part of that. I’ve been alone in that thinking, but at the moment, this is becoming a higher priority for more than one regent.”
Jonah Newman, a database reporter with the Chronicle of Higher Education, said the team requested compensation information from each university and state university system. The data, she said, was self-reported by the universities.
The team’s analysis included public research universities and affiliated systems with enrollments of at least 10,000 students, along with state flagship universities with smaller enrollments.
While the compensation package for Engstrom and Cruzado-Salas ranks below the national average, Buchanan noted that it remains on par with university presidents in the region, including Idaho, Wyoming, and North and South Dakota.
“You need a salary that’s high enough to grab top tier talent, but I don’t think Montanans would be comfortable with a $1 million investment,” Buchanan said. “We’re going to lose some people because we can’t spend that kind of money, but by and large, we’ve succeeded in attracting good people.”
According to the figures, M. Duane Nellis at the University of Idaho receives $376,658 in total compensation, placing him 141st nationally, while Arthur Vailas at Idaho State University receives $360,703, placing him 152nd and just ahead of Engstrom.
Thomas Buchanan at the University of Wyoming ranked 138th, receiving $381,331 in total compensation. David Chicoine at South Dakota State University ranked 163rd with a package worth $345,311.