Update 8/29/19: Since this story's publication in July, The Chronicle of Higher Education has updated and corrected several numbers in its database, including Teresa A. Sullivan's compensation. The online story now reflects Sullivan's updated compensation according to that database.
Up and up.
University officials are now among the highest-paid public employees in Virginia, accounting for seven of the top 10 spots, thanks to increased use of deferred compensation clauses in contracts.
Michael Rao, president of Virginia Commonwealth University, earned more than $1 million in total compensation between July 1, 2018, and June 30, according to a database published Friday by The Richmond Times-Dispatch. At the University of Virginia, President Jim Ryan’s compensation for his first 11 months in office was $962,875.
“[Ryan is] really earning his pay, and he’s given far more value to UVa in his time here so far than he’s cost us,” said Jim Murray, the rector of UVa, saying he views Ryan as an inspirational leader.
Rao and Ryan were the highest-paid public employees in Virginia during fiscal year 2019, which ended June 30. And the Times-Dispatch’s database shows Ryan’s pay outpacing that of his predecessor, Teresa A. Sullivan.
Sullivan served as UVa president for eight years before stepping down on July 31, 2018. She received total compensation of $754,830 during the 2017 fiscal year, according to the Times-Dispatch, as well as a car allowance and on-Grounds housing.
The Chronicle of Higher Education, a national publication, pegged Sullivan’s total compensation during the calendar 2018 year as $665,968, by accounting for base pay, bonus pay, benefits, pay set aside and retirement benefits during that period.
“Deferred compensation can take several years to come due,” said Jim Finkelstein, a professor at George Mason University who studies compensation in higher education. “Even if they’re not making $1 million this year, they could well make an average of $1 million per year over the course of the contract.”
Sullivan is now in the midst of a two-year research sabbatical in Texas, and will return to teach demography at UVa in the fall of 2020.
Ryan took office on Aug. 1, 2018, and his state salary for the partial year was $192,656, according to the Times-Dispatch. In addition, he received a non-state salary of $557,344; $150,000 in deferred compensation; and a $62,875 bonus. He also received $42,875 in paid personal expenses, a $20,000 vehicle allowance and housing. The eventual value of that compensation is more than $1 million.
Murray said that when UVa’s Board of Visitors offered Ryan his position, Ryan’s pay was at the upper end of national benchmarks, but commensurate with his previous experience and the scale of UVa and its Health System. Murray declined to comment on the circumstances of Ryan’s bonus, granted in June, but said that clause and the deferred compensation clause both were earned.
“The board is very enthusiastic about his performance, and felt he’d earned his bonus,” Murray said. “Deferred compensation is commonplace in the corporate world, and is geared toward retention. There’s nothing sinister about it.”
The university also provided Ryan’s responses to the Chronicle survey for his partial calendar year worked, which yield slightly different numbers for his base salary and transportation allowance.
The median pay at UVa, according to the Times-Dispatch, is $67,038. The median pay of state employees Virginia-wide is $52,401.
Among public university presidents nationwide, according to the Chronicle’s database, the median pay is in the $470,000 range, but 17 had total compensation of more than $1 million (The number of millionaires was much higher among leaders of private institutions).
“Other public executives, such as Cabinet members, make far less,” Finkelstein said. “University presidents benefit from having more corporate-types of people on their boards, who are used to those compensations, and it’s not the board’s money they’re spending. It is money held responsible for the public trust, and there really is no reason to pay an executive $1 million a year, but it’s going to become more common and boards are going to keep approving it.”
Only 30% of all college presidents are women, according to the American Council on Education. While a smaller share of top earners are female, that number is increasing.
“Over the last couple of years, there has been a real shift on the equal pay for equal work issue,” Sullivan said in a recent interview.
More than gender, though, Sullivan said a president’s pay is often more dependent on whether a candidate comes from academia or the corporate world, and if the school’s board can establish an appropriate benchmark at a different institution. She recently served on a search committee for Michigan State University, which in May named Samuel Stanley, a biomedical researcher and former president of Stony Brook University, to be its new president. His base pay will be $800,000 and he will have the ability to earn $1 million annually, according to The Detroit Free-Press.
“If someone is from the business world and you explain that [a university] is the largest employer in five counties, they kind of get it,” Sullivan said. “A university is a city.”
She declined to comment specifically on her or Ryan’s compensation. Ryan did not return an emailed request for comment.
The highest-paid public executive in the Chronicle’s survey was William McRaven of the University of Texas System, who earned a total of nearly $2.58 million in 2018, including a $1.28 million payout from a three-year, deferred-compensation package and a $670,000 bonus.