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Also by Tom Schalmo:

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by Tom Schalmo

Wednesday, May 7, 2008

In the past year, five chancellors within the University of Wisconsin System announced their intentions to step down.

UW-Madison’s John Wiley, 66, and UW-Parkside’s Jack Keating, 70, are stepping down due in part to their age and are not taking positions at other institutions. Today, UW-Madison will announce a short list of candidates to replace Wiley.

But UW-Green Bay’s Bruce Shepard, UW-Whitewater’s Martha Saunders and UW-River Falls’ Don Betz are leaving for considerably higher paying positions somewhere outside Wisconsin.

With a system of 14 chancellors — 13 at the four-year universities and the 14th leading the UW Colleges and UW-Extension — five openings equates to over one-third of the positions in the state.

It’s no secret that chancellor pay in the UW System is far below comparable institutions. For example, Wiley’s $327,000 salary is $84,000 less than the average for other leaders in UW-Madison’s peer group and the lowest of the 11 comparable schools.

In February, however, the Board of Regents approved a salary hike for UW-Madison’s chancellor position to somewhere between $370,000 and $452,000.

As he prepares to leave the chancellor post he has held since 2001, Wiley acknowledges the statistics but makes his position pretty clear.

“I was paid enough,” he said.

Despite the five departures systemwide and a lower-than-average salary, Wiley said UW-Madison will find a perfectly capable individual to replace him. He doubts compensation will play a role in the chancellor search as whole.

“I know it’s currently $100,000 below the median, but I think the median is ridiculously high because of a few salaries, especially in the Big Ten, that we get compared to,” Wiley said. “There are some salaries that are just completely unjustifiable. And it’s not reasonable to compare our salaries against theirs.”

E. Gordon Gee, the president of Ohio State University, now makes just over $1 million annually — a figure that sits considerably higher than what was used when UW determined its peer group averages in February.

According to UW System figures, the 2006-2007 chancellor salaries at comparable institutions included $516,000 at the University of Michigan, $407,000 at Purdue University and $384,000 at the University of Minnesota.

“Someone just lost their senses in paying an extortionate amount of money at some universities, so it’s an unfair comparison,” Wiley said.

Show me the money

While Wiley and Keating are not moving onto better paying positions, Shepard, Saunders and Betz are.

“Three people have said, ‘I have been recruited. I’ve tried to stay,’” UW Board of Regents President Mark Bradley said. “And the salaries outside Wisconsin are just so much higher, you could hardly blame somebody.”

While Bradley pointed to Wiley’s beliefs that he was paid fairly and national salaries are inflated, he still argues UW’s chancellors are not paid enough relative to other institutions.

“If you talk about the chancellors at the comprehensive campuses in Wisconsin, we’ve got two big problems,” Bradley said. “The leaders, who have tremendous responsibility, they are underpaid in relation to the comparisons, and we have lost three superb chancellors.”

Patrick O’Connell, organizing and communications director for the United Council of UW Students, said chancellor pay is just a subsection of the problem of a lack of state funding for the UW System.

“Students can’t carry the UW System on their backs,” O’Connell said. “And for the last 10 years, that’s what the state has been forcing them to do.”

Rep. Mark Pocan, D-Madison, agreed, adding a major reinvestment is needed for the UW System in general and dealing with budgetary issues will provide a challenge for the next set of chancellors.

“I think that’s been one of the biggest challenges that’s been ongoing,” Pocan said. “While I’ve been in the Legislature, we’ve had far more bad budgets than good budgets for the UW System. Funding in general is important.”

UW is already working with state legislators to push their initiatives for the 2009-11 biennial state budget.

“The chancellors leaving are just a symptom of what’s going wrong,” Pocan added.

Regent David Walsh, who chairs the special regent committee charged with recommending a final candidate for UW-Madison chancellor, said the money simply is not available to pay chancellors anymore.

He said part of the UW System’s challenge is to convince lawmakers higher education is “a solution, not an expense.”

“The world has changed in a lot of areas, and unfortunately, where we might have money for coaches and sports and CEOs in certain areas, we don’t have the alternative revenue streams to pay qualified educators,” Walsh said.

Walsh said the UW System is known for grooming chancellors who eventually move on to other, higher-paying positions.

“The fact is these jobs chase the money, and we don’t have the money in public education,” Walsh said.

Not alone

Despite his firm opinion, Wiley admits he’s “an outlier” in believing his salary remains at an appropriate level.

But some Republican state legislators — individuals who are known to be vocal when it comes to UW System issues — agree with Wiley.

Rep. Scott Suder, R-Abbotsford, said the average median family income in his home district is $40,000, adding those people end up footing the bill for chancellor salaries.

“I think if you ask anyone on the street and you told them how much our chancellors make, I think they would be stunned by how much they make,” Suder said.

Pocan thinks the UW System will find perfectly qualified candidates to take over for Wiley and the other four leaders despite the comparative salaries.

“I think people don’t do the job strictly for the pay and a lot has to do with doing it at this institution,” Pocan said.

Wiley pointed out that UW-Madison holds the title of the nation’s 2nd-most successful research institution, a factor that is particularly important in an era when corporations are putting much less emphasis on research, relying on universities to pick up the slack.

UW System officials have also continually emphasized UW schools offer an excellent “total package.”

“We have salary and the state retirement plan and the state health insurance plan,” Bradley said. “We don’t have the ability to put together deferred compensation plans like some of our competition does.”

Walsh agreed that despite UW’s inabilities to compete “like we used to be,” the UW System still provides a positive place for leaders to settle.

Suder strongly disagrees with efforts to continually raise chancellor salaries, criticizing the Board of Regents’ February move to increase the salary range for Wiley’s successor.

“This is a little game they play,” he said. “It’s a race to the top for salaries.”

The process

With many of these figures based on using peer group figures, Wiley said the way UW sets its chancellors’ salaries needs serious revision.

“Faculty salaries are determined in an open, free market. They’re determined by supply and demand, and they find a reasonable dollar amount,” he said. “Chancellor salaries should be the same thing, but they’re not because of things like search firms and comparisons that everybody includes of their peers that get distorted by noncompetitive factors, and I don’t think that’s right.”

Suder agreed chancellor salaries should be determined on more competitive factors, adding the comparisons to other institutions are unfair.

“There’s no correlation with the private market,” he said. “I would say it’s a salary game to play with the numbers.”

UW-Madison’s Search and Screen Committee is among the school committees using a search firm for chancellor search.

The firm, Academic Search Consultation Service, currently assists other schools in executive searches, including Texas Tech and South Carolina State University. In an online description of the organization founded in 1976, ASCS says it “wrote the book” on how to lead university president or chancellor searches.

A representative from Academic Search deferred all questions to UW officials.

Walsh said there are several advantages to utilizing a search firm.

“They spread the word quicker,” Walsh said. “They encourage higher salaries because they want to assist in getting good people from other institutions.”

Bradley stands by the university’s decision to use a search firm but admitted they could play an indirect role in continually increasing chancellor salaries.

“It’s one of several factors,” Bradley said. “No one factor could dictate a result. The institutions are the ones who end up falling for the spiraling salary argument. If a couple prominent institutions would draw a line and other institutions would follow, then you would see more moderate inflation in these salaries.”

Just as the Board of Regents will do later this summer, Bradley pointed out each university sets its chancellor’s pay and does not leave it up to any search firm.

“No matter what a search firm says, you have to have a group of people decide, ‘That’s what we’re going to pay them,’” he said.

In the end, Walsh hopes the state and UW System can reach some sort of conclusion.

“It’d be nice if we could stop complaining about all this and try to figure out a solution together,” he said.

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