Australia anoints new v-c pay watchdog, as old watchdog slumbers

Australia’s government has overlooked existing powers in belatedly appointing a new watchdog to constrain universities’ executive pay.

Under 52-year-old legislation, the Commonwealth Remuneration Tribunal has responsibility for scrutinising the salaries of vice-chancellors and other higher education leaders, and reporting its findings to the minister for the public service.

The tribunal also has specific responsibility for advising the Australian National University (ANU) and University of Canberra (UC) on executive employment remuneration and allowances.

Such work will now be assumed by a 10-person expert governance council, whose membership was announced by the federal government on 23 January. Its role includes ensuring rigorous and transparent processes for remunerating senior university staff.

The council will be chaired by Melinda Cilento, chief executive of the Committee for Economic Development Australia. Other members include representatives of the Tertiary Education Quality and Standards Agency, Universities Australia, the University Chancellors Council, the Governance Institute of Australia and the Law Council of Australia, along with former union boss Sharan Burrow and University of Queensland adjunct professor Bruce Cowley.

Federal, state and territory education ministers committed to establish the council in April last year, in line with a recommendation from the Australian Universities Accord panel the previous July. The council was to develop new “university governance principles and recommendations” for ministerial endorsement by the end of last year.

In November, The Australian newspaper reported that the council’s membership was to be revealed “within days”. The council will now provide its recommendations to education ministers some time in 2025, according to federal education minister Jason Clare.

Longstanding concern over the salaries of publicly funded universities’ executives – particularly their vice-chancellors, whose earnings averaged over A$1.025 million (£522,000) in 2023 – escalated following the November publication of a National Tertiary Education Union report which found that 306 university executives earned more than their respective state premiers or territory chief ministers.

ANU and UC, the two Canberra-based universities, have come under particular fire. In 2023, UC paid almost A$1.8 million – an all-time record for the sector – to departing vice-chancellor Paddy Nixon, whose exit 16 months before his contract’s expiry was revealed the following month.

UC, which is cutting courses and retrenching staff amid a budgetary crisis, has denied requests for details about Nixon’s payout.

ANU vice-chancellor Genevieve Bell promised to relinquish 10 per cent of her A$1.1 million earnings as part of an ultimately unsuccessful plea for staff to forgo a scheduled pay increase.

Her depleted package nevertheless exceeds the final-year earnings of her predecessor – Nobel prizewinning physicist Brian Schmidt – by about A$150,000 and was bolstered for 10 months by a part-time executive salary from technology giant Intel, where she worked for 19 years before joining the university.

In a statement posted on the ANU website, chancellor Julie Bishop said Bell’s role with Intel had been “well known and celebrated” within the university community. The Australian Financial Review has reported that staff and council members were dumbfounded to learn that the position was paid.

Times Higher Education asked the Remuneration Tribunal whether it had advised the two Canberra universities on executive pay or enquired into vice-chancellors’ salaries more generally over the past five years. It said it could not respond by publication deadline.

ANU said it had sought guidance from the tribunal on Bell’s salary. UC indicated that the communications it had received from the tribunal had been generic in nature, with no specific relevance to the university.

Clare’s office did not say whether the new governance council would consult the tribunal on university executive remuneration. But a spokesman said the council would consult widely.

He said the government and the wider community expected vice-chancellor salaries to be “reasonable”, “transparent” and “comparable with similar public entities”.

In New Zealand, the head of the Public Service Commission – which sets chief executive remuneration in public service agencies and guides the boards of other public entities, including universities, on executive pay – personally approves vice-chancellors’ salaries. The commission has publicly reported vice-chancellors’ remuneration since 2010.

University councils tend to adopt the commission’s guidance. In 2023-24, New Zealand vice-chancellors’ remuneration averaged NZ$589,000 (£271,000) – about half the average in Australia.

An Academic Salaries Tribunal established in Australia in the mid-1970s, after the federal government assumed responsibility for university funding, helped keep vice-chancellors’ salaries in check. If universities paid their leaders more than the recommended amounts, the overpayments were deducted from their commonwealth funding.

After the tribunal was disbanded in the mid-1980s, vice-chancellors’ salaries – which had typically been about triple the amounts paid to junior academics – reached up to 16 times lecturers’ pay.

john.ross@timeshighereducation.com