Australian universities are a millionaire factory for those who can scratch their way to the very top with the top 10 highest paid vice-chancellors all raking in million-dollar salary packages over the previous year. The international student sector, which props up Australian universities and their research efforts, started collapsing after borders were hastily closed last February. As does the Australian National University. This approach was abandoned as marketisation set in. There is a voluble and cyclical public debate in the UK and Australia regarding the levels of vice chancellorsFootnote1 (VCs) remuneration at publicly funded universities (Adams & Gamperl, Citation2018; Heffernan, Citation2019; Loussikian, Citation2018). /Font 26 0 R If not, we need to understand how salaries have been inflated and find ways to keep them in check. Calculating Vice Chancellors salaries and senior executive remuneration in Australian public sector universities is challenging. Schmidt is garrulous; his Montana drawl tamed by 30 years in Australia. Australian National University vice-chancellor Professor Brian Schmidt. To put it plainly, ANU has had a rough few years. Journal Schmidt calculated his initial vice-chancellors salary which was $150,000 more than his 2020 pay packet by benchmarking himself against international equivalents and the professoriate at ANU. Did you know that with a free Taylor & Francis Online account you can gain access to the following benefits? << /Type /Page This system persisted until the late 1990s, when it was replaced by decentralised local enterprise bargaining, consistent with more managerialist employment practices (Anderson et al., Citation2002), under which academic salaries were determined by each university. Embedded in the code is the requirement that vice-chancellors be held to account for performance and that their base remuneration should be appropriate for the role and related to their institutions successful delivery of financial and nonfinancial goals. /Font 52 0 R Is vice chancellor pay justified by university performance? That was pretty bad. TEQSA Publisher ID: PRV12061 (Australian University) Locked Bag 1797 Penrith NSW 2751 Tel: +61 2 9852 5222. Australia and the UK experience regular annual outrage over vice-chancellors' pay. My boss the people who hire and fire me is technically the council. Yet, despite the eye-watering sums, executive pay remains less of a hot . Last year, he donated his $14,000 long-service leave payment to a staff welfare fund. /Contents 56 0 R Stewardship was the dominant governance form until the twentieth century (Donaldson & Davis, Citation1991, p. 22). That honour went to Jim Albracht, still one of his closest friends and now director of product management for news ecosystems at Google. /Contents 20 0 R In January, we were delighted to welcome the Hon Julie Bishop to our University's most senior office: the first woman appointed Chancellor of ANU. It was wrong to say Australia had to pay more to lure top talent. application/pdf /Pages 2 0 R 2. In this context, their remuneration packages were modest compared with many corporate chief executives, he said. Earlier, we noted that agency theory posits that principals and managerial agents both seek to maximise their own financial position at the expense of the other (Ross, Citation1973). Schmidt excelled academically, but he did not become dux. /ProcSet [/PDF /Text] Your name /MediaBox [0 0 595 842] Similar, but less extreme, trends are evident in the UK. Follow the topics, people and companies that matter to you. Professionals were seen as unaccountable and self-serving, making the self-governing universities with significant public funding an obvious target (McNay, Citation1999). endobj Vice-chancellors' average remuneration has soared from 2.9 times lecturers' pay in 1975 to 16 times in 2018. The balance of internal power shifted away from academic senates to university councils which became smaller and focused on strategic and financial matters (Rowlands, Citation2017). They are attracted by the fantastic health system and fantastic services. Johnes and Virmani (Citation2020) also note this rise, which accelerated when full student fees were introduced in 2011 as part of the further marketisation of universities. By 2020, Australia had 39 self-governing and self-owning publicly funded universities. >> /MediaBox [0 0 595 842] The escalation of VC remuneration in this context suggests rent-taking. /ExtGState 44 0 R However, that literature does not address, because the methodology is unsuited, the governance factors that determine the allocation of remuneration. 3536). Copyright (c) 2021 The author(s). In examining the public university annual reports for 2021, there are no disclosures per the voluntary code. 3132). /Resources << Our universities were nowhere near as loud as Australian ones in claiming poverty during COVID-19 and did not resort to mass lay-offs either, Mr Usher said. Australian universities have indeed become more business like as both major parties sought in the 1990s. If anything it's more attractive to come to Australia," Professor Smith said. They say they want universities to be less reliant on China and international students. 2022-02-22T13:09:18+01:00 He said Sydney was arguably the highest paying university in Australia in what is on average the highest paying university system in the world. /Rotate 0 Although we draw on empirical examples from both Australia and the UK, this is not a comparative article. Dr Spence told the inquiry that in 2020, Sydney University identified 247 academic staff and 45 administrators paid more $250,000 a year. 2 0 obj Jensen and Meckling (Citation1976) posit two ways to mitigate this problem. Over the past 30 years, Australian and British universities have been marketised, emulating private-sector for-profit organisations. Further, there is a demonstrated link between these increases and formulaic pay-setting mechanisms such as benchmarking (Gschwandtner & McManus, Citation2018). But five annual reports are yet to be published, including three from . Managers remuneration, therefore, reflects the cost of ensuring that they can be trusted, not the economic value of their contribution. We need more meaningful metrics, says Adrian Furnham, Average leaders remuneration stood at 308,000 last year, according to analysis of 118 university accounts, For all their collegiality, pay disparity in Australian universities is not out of step with big business, Up to 50 staff at wealthier Australian institutions out-earn the average English vice-chancellor, FOI documents reveal. Possible Range. He was fourth on the list, but fortunately for Schmidt, the three other contenders received offers elsewhere. /ModDate (D:20220220173829+01'00') From the nineteenth century, the state increasingly funded universities, but the government took care not to exercise control as a consequence (Ainley, Citation2014). Meanwhile, Monash University boss Margaret Gardners salary dipped below A$1 million because of a change in her pay cycle. Many universities publicly justify the remuneration levels of their VCs on the basis that the salaries are independently determined by these committees following rigorous external benchmarking exercises. Research demonstrates rapid and relatively recent increases in VCs remuneration with little connection between pay and performance (Bachan & Reilly, Citation2015; Johnes & Virmani, Citation2020). Recommended articles lists articles that we recommend and is powered by our AI driven recommendation engine. Schmidts motivation was that by keeping ANU small and elite, a high-quality education and experience could be guaranteed for all students, international and domestic. By the 1990s, self-serving managerial behaviour was widespread, leading shareholders and governments to demand a shift towards greater formal, endogenous and exogenous surveillance and control measures such as non-executive directors, remuneration and audit committees, and the strengthening of shareholders legal rights (Cadbury, Citation1992). /Parent 2 0 R << /R12 60 0 R The University Chancellors Council must act now to deliver on the purpose of the code. Follow the topics, people and companies that matter to you. /MediaBox [0 0 595 842] Resources foracademics and university staff, Everything you need for each stepof your study abroad journey. 12 0 obj Most Victorian university vice-chancellors either took a pay cut or donated their salary increases to student hardship funds in 2020, although the three highest-paid university heads were still on total salary packages of more than $1 million. >> They don't have the training. https://creativecommons.org/licenses/by/4.0/ As part of Deakin's COVID-19 response Professor Martin chose not to seek any portion of his contractual performance incentives for 2020. He is also the Director of the Grattan Institute, Melbourne Business School and the Melbourne Theatre Company . Male vice-chancellors have probably passed that milestone already, with their remuneration averaging A$955,000 in 2017, up about 5 per cent on the previous year. This would be in line with agency thinking concerning surveillance and control where remuneration has failed to achieve the desired goals. This signals that for some universities broader capabilities and expertise is being sought in the vice-chancellor role. In response, the federal government stipulated that any university that exceeded the recommended VC remuneration levels would have that amount deducted from their recurrent government grant. Table 2 indicates the increases between 2007 and 2015 which included the Global Financial Crisis and UK austerity policies. Thirteen Australian vice-chancellors earned more than A$1 million last year, up from 11 in 2016, with signs that others will soon join them. Alex Usher, Canadian-based higher education strategist. << This caused information asymmetries and shifted the balance of power in managers favour (Balago, Citation2014); managers could no longer be implicitly trusted. 6532 >> 20 0 obj Australia and the UK experience regular annual outrage over vice-chancellors pay. Professor Maskell's pay package rose by about $20,000 to a range between $1.5 . 1 0 obj << Unless the report stated otherwise, it was assumed that VCs were not entitled to additional remuneration due to also being a council member. Financial exigencies considerably strengthened VCs and university governing bodies powers (Marginson & Considine, Citation2000). University of Melbourne vice-chancellor Duncan Maskell was the states highest paid vice-chancellor last year thanks to an official remuneration package of just over $1.5 million. Core to that process has been the transition of vice-chancellors from being first among equals in academic communities to entrepreneurial chief executive officers of quasi-corporations. Former Swinburne vice-chancellor Linda Kristjanson received $890,000 including an exit package upon leaving in August and La Trobe vice-chancellor John Dewar took a pay cut of more than $100,000, his salary dropping from $970,000 to $850,000. The changing landscape of VCs remuneration in Australia and the UK, https://doi.org/10.1080/07294360.2020.1841741, https://www.theguardian.com/education/2019/jun/20/vice-chancellors-still-attend-pay-meetings-despite-outcry, https://www.theguardian.com/education/2018/mar/11/university-vice-chancellors-are-paid-far-more-than-public-sector-peers, https://doi.org/10.1111/j.1475-5890.2015.12045.x, https://doi.org/10.1080/13583883.2006.9967175, https://doi.org/10.5923/j.ijfa.20140304.04, http://www.ecgi.org/codes/documents/cadbury.pdf, https://doi.org/10.1007/s11162-014-9328-9, https://www.universitychairs.ac.uk/higher-education-remuneration-code-2/, http://www.educationengland.org.uk/documents/jarratt1985/index.html, https://doi.org/10.5465/amr.1997.9707180258, https://www.afr.com/news/policy/budget/simon-birmingham-attacks-university-vicechancellors-1m-salaries-20170501-gvw3lg, https://doi.org/10.1177/031289629101600103, https://doi.org/10.1007/s10734-009-9249-2, https://doi.org/10.4284/0038-4038-2011.215, https://www.timeshighereducation.com/features/chalk-it-oversight, https://blogs.kent.ac.uk/economics/2018/05/24/university-vice-chancellor-pay-performance-and-asymmetric-benchmarking/, https://doi.org/10.1080/07294360601166786, https://doi.org/10.1080/13603124.2019.1631387, https://www.hesa.ac.uk/data-and-analysis/finances/table-11, https://doi.org/10.1016/0304-405X(76)90026-X, https://doi.org/10.1007/s10479-019-03275-2, https://doi.org/10.1080/13600800802383018, https://junkee.com/university-vice-chancellor-salary/143593, https://www.smh.com.au/politics/federal/the-nation-s-highest-paid-university-leaders-20180826-p4zztd.html, https://www.msci.com/documents/1296102/7330587/Research_Insight_Out_of_Whack.pdf/46baa603-a503-42c1-91c0-d0ef19b754b2, https://www.officeforstudents.org.uk/advice-and-guidance/regulation/senior-staff-pay/, https://www.academia.edu/4029657/Determination_of_academic_pay_in_universities_and_colleges_in_UK_under_the_new_pay_framework_the_policy_and_practice, https://www.timeshighereducation.com/news/three-four-australian-v-cs-take-pay-cuts, https://www.timeshighereducation.com/news/average-australian-v-c-pay-packet-may-top-a1m, https://doi.org/10.1111/j.1468-2273.2008.00384.x, https://www.theguardian.com/education/2018/feb/15/majority-of-university-leaders-involved-in-setting-their-own-pay, Mid-level teaching and research university, New dual sector (established mid-1990s) university.
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