Highly paid vice-chancellors ‘lead dissatisfied universities’

Australia’s best-paid university bosses preside over the institutions with among the worst student satisfaction, and the earnings gap between vice-chancellors and ordinary workers has increased fivefold since regulation of university leaders’ salaries ended in the mid-1980s, an analysis has found.

The heads of Australia’s research-intensive universities earned an average of just over A$300,000 (£150,000), in today’s dollars, when the Academic Salaries Tribunal helped keep vice-chancellors’ salaries in check in 1985. That was roughly five times the average full-time earnings of the time – about A$62,000 – and almost 24 times the maximum student income support of about A$13,000.

Vice-chancellors’ salaries more than doubled over the ensuing decade, after the tribunal was scrapped as part of the 1980s higher education reforms. By 2023, top university bosses were pocketing around A$1.3 million – 15 times the average earnings of about A$87,000, and 84 times the A$15,000 or so available through Youth Allowance.

“Our current system is deeply unfair,” concluded Jack Thrower, an economist and researcher with the Australia Institute thinktank. “It’s time to fix it.”

He said a newly announced expert governance council would not be enough, because it would only be empowered to issue “guidance” rather than binding rules. “Bolder action is needed to rein in vice-chancellor remuneration, such as making federal funding conditional on capping remuneration to only two or three times more than lecturer salaries.”

The analysis also found that the universities with the most generously remunerated vice-chancellors had “very low levels of student satisfaction”, as measured by the 2023 Quality Indicators for Learning and Teaching surveys, while the chiefs of the four top-rated institutions all earned below-average salaries.

Thrower said executive pay was a relatively minor aspect of the sector’s problems, and conceded that the best-paid vice-chancellors tended to run larger universities where satisfaction suffered because students felt invisible.

But this was no excuse, he told Times Higher Education. “If we’re paying vice-chancellors based on their ability to manage large institutions, then…they should be able to manage such institutions [so that] there isn’t such dissatisfaction,” he said.

“I wouldn’t say there’s a negative correlation [between executive salaries and student satisfaction]. It’s not strong enough to be statistically significant. It’s just that there doesn’t seem to be a positive relationship there.”

He said relatively low vice-chancellors’ salaries tended not to curry favour in university communities, because staff and particularly students had little awareness of things like leaders’ pay. Nevertheless, exorbitant executive remuneration fuelled resentment when administrators started slashing courses and jobs.

Thrower played down concerns that reregulating vice-chancellors’ salaries might constrain institutional autonomy, which was mainly about universities having a free hand over issues of research and educational delivery – not operational matters like executive pay.

The Senate’s Education and Employment Legislation Committee has resolved to examine the impact of executive remuneration on staff, students and educational quality, as part of a wider inquiry into university governance. Its report is due on 4 April.

john.ross@timeshighereducation.com