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Covid ¡®just a blip¡¯ in rising Australian vice-chancellor earnings

Notwithstanding their generosity in 2020, most university leaders will be back to seven-figure earnings as the crisis really bites

July 21, 2021
Person holding inflatable watermelon for Covid ¡®just a blip¡¯ in rising Australian vice-chancellor earnings
Source: Getty

While Australian vice-chancellors relinquished millions of dollars to help universities and students weather the Covid-induced financial crisis, the pandemic will only temporarily interrupt the inexorable growth of their outsized pay packets.

Seven-figure earnings could again be the norm this year, with austerity measures to curtail executive pay ¨C typically through salary cuts or renunciation of performance bonuses ¨C already a thing of the past at most institutions.

This means that average vice-chancellor remuneration exceeding A$1 million (?540,000), a benchmark that the sector?exceeded in 2019, could re-emerge as earnings plummet from the overseas tuition fees that fuelled such high pay. Experts expect 2022 to be a crunch year for Australian international education because of a dearth of fresh enrolments in 2020 and 2021.

Institutional accounts released so far show that 11 vice-chancellors earned more than A$1 million last year, down from 15 in 2019. But five annual reports are yet to be published, including three from universities that paid their leaders?more than?A$1 million in 2019.

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Unprecedented turnover has also affected vice-chancellors¡¯ salaries, with 13 universities changing leaders last year. Part-year pay tipped the earnings of three university chiefs below the A$1 million mark, while termination benefits elevated the package of another departing vice-chancellor to seven figures.

Of 19 universities that have not undergone recent leadership changes, 10 reduced their vice-chancellors¡¯ remuneration while seven increased it and two left it unchanged. Overall executive pay rose at 17 universities last year, declining at 15.

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All but a handful of vice-chancellors ¨C and many other university executives ¨C accepted pay cuts to alleviate their institutions¡¯ financial problems or students¡¯ suffering. Most university leaders relinquished between 10 and 30 per cent of their earnings, either taking pay cuts or diverting money into scholarship or hardship funds.

Other vice-chancellors refused bonuses or pay increases, with some combining all these measures. Their contributions are not necessarily reflected in 2020 institutional accounts because the donations came from take-home pay or because bonus payments fell due in 2021.

Some contributions were substantial. University of Technology Sydney vice-chancellor Attila Brungs gave about A$200,000 to struggling students and staff. Deakin University boss Iain Martin relinquished 25 per cent of his salary and contributed a further A$40,000 to Deakin¡¯s student emergency assistance fund.

At the University of Melbourne, senior managers returned 20 per cent of their income ¨C almost A$9 million ¨C to institutional coffers. A year earlier, they contributed almost A$16 million to a student residence and scholarship programme.

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But with such gestures expiring at the end of 2020 or mid-2021, normal executive pay arrangements have resumed at most institutions. Macquarie University accounting professor James Guthrie said that governing councils had missed an opportunity to reset vice-chancellors¡¯ remuneration.

Professor Guthrie said it was a mistake for universities to benchmark executive salaries against each other, because ¡°everyone¡¯s in the floating boat. You¡¯re benchmarking with someone else who¡¯s floated up in salary.¡±

The pandemic will permanently lower leaders¡¯ pay at a handful of universities. The University of Sydney, whose former boss Michael Spence was Australia¡¯s most generously remunerated vice-chancellor, will pay successor?Mark Scott?at least 23 per cent less.

The Australian National University¡¯s Nobel laureate vice-chancellor Brian Schmidt accepted a A$90,000 pay cut when he was reappointed last year, making him the lowest-paid head of any public university.

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john.ross@timeshighereducation.com

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