Univ. presidents’ salaries going up

By Michelle Hagopian

Published March 11, 2008

The UM system is one of many universities across the country whose president’s salary is increasing greater than the rate of inflation.

UM system President Gary Forsee earns $400,000 annually, an expected 4.6 percent increase from former President Elson Floyd’s salary.

UM system spokesman Scott Charton said Floyd accepted $600,000 plus substantial deferred compensation to move to the presidency of Washington State University.

“Floyd was making about $382,000 a year plus certain perks including use of the president’s residence before he left,” Charton said.

Charton said the UM system Board of Curators was told early in its search that it should prepare to pay substantially more than Floyd was making.

“It is a highly competitive national marketplace to find a dynamic leader for a large, complex organization such as the University of Missouri system,” Charton said.

He said other major university presidents in both the public and private sectors are commanding even higher salaries than Forsee is currently making. Forsee also has made prior charitable commitments to the UM system.

“President Forsee’s contributions were substantial and they continue to this day, so he is giving back to his alma mater in several ways that are meaningful and valuable,” Charton said. “For President Forsee, the appointment was much more about what he could give back to our institution.”

Negotiation with candidates happens in closed sessions and is led by the system’s professional search consultant.

“There is a phase of compensation negotiations, but this was not an important factor for President Forsee,” Charton said.

The UM system president is also eligible for performance-based incentive compensation, which amounts to a maximum of $100,000 per year.

Charton said Forsee is required to live in the official president’s residence in Columbia. The university covers the expenses and Forsee also receives a car to be used for purposes he deems necessary.

In addition, the system will provide Forsee with a membership to a country club located in Boone County during his employment, Charton said.

MU economics professor Joseph Haslag said the consumer price index measures the average price of consumer goods and services purchased by households.

“The construction of the index is done by a survey of consumer buying patterns,” Haslag said.

He said the inflation rate is simply the rate of change in the price index and though university administrators’ salaries may be increasing higher than the rate of inflation, the economic market isn’t to blame.

“Wages and prices are all driven by market forces, and some rise faster than others,” Haslag said. “Prices are the best means of allocating scarce resources.”

Charton said it is important for the UM system to compete within the national marketplace.

“President Forsee has placed such a high priority on improving our ranked faculty compensation, as just keeping pace with inflation will not keep UM competitive in hiring and retaining the best and brightest faculty members,” he said.

The University of Colorado, a three-campus system, recently named Hank Brown its new system president.

Brown currently earns $378,000 annually. Previous CU system President Elizabeth Hoffman earned $400,000 in salary.

CU spokesman Ken McConnellogue said Brown accepted the job at a lower salary for a reason.

“Brown took the job receiving a lower salary because he has a strong belief that people in public service shouldn’t receive salaries that raise public eyebrows,” he said.

Brown, a former U.S. senator, is also allotted a $40,000 annual housing allowance.