The Richmond Times-Dispatch published its annual ranking of highest-paid state employees Sunday and, no surprise, university presidents and Virginia Retirement System (VRS) executives dominate the list.
I’m of two minds. On the one hand, if you want the best people running your universities and your pension funds, you have to pay them competitive salaries. Basically, you get what you pay for. Don’t expect exceptional results if you hire mediocre leaders.
The compensation of top VRS executives is largely tied to investment results. Investment mangers get rewarded if they deliver superior returns, a metric that is directly aligned with the interest of Virginia citizens. I have no problem with that. On the other hand, what do Virginia’s public university presidents get rewarded for? I know one thing: not for restraining tuition hikes.
Let’s take a look at Virginia Commonwealth University’s president, Michael P. Rao, the highest-paid state employee last fiscal year. According to T-D calculations, he earned $901,000 in fiscal 2016.
As befitting a public employee, Rao earned a base salary of $183,000. That’s a modest sum for a man running an organization with operating expenses of roughly $1 billion a year, so it’s no surprise that the Board of Visitors supplemented his base salary with:
- $191,500 in deferred compensation
- $72,000 housing allowance
- $50,000 to cover personal expenses relating to his role as president
- $7,000 for tax preparation
- $5,000 for disability insurance from his previous contract
- $2,160 for wireless communications
- $42,500 for an automobile provided by VCU (and not included in the salary calculation)
Plus, he got paid a $50,000 bonus paid for meeting performance goals in 2014-2016. The T-D noted that the board will meet next week to evaluate Rao’s last-year performance and a new set of measurements to reflect the university’s objectives this year, but did not say what the performance goals were.
The VCU president’s page refers vaguely to three “themes” relating to the universty’s vision and goals: (1) “provide all students with high-quality learning/living experiences;” (2) “attain distinction as a fully integrated urban, public research university;” and (3) “become a national model for community engagement and regional impact.”
What metrics would demonstrate progress toward achieving those goals? I’m hard-pressed to imagine.
Suggestion to the T-D: Next year, it might be worthwhile to find out exactly what performance metrics were used to calculate Rao’s bonus. As a matter of fact, it would be useful to obtain that information for every public university president. There could be no clearer indicator of university boards’ top priorities. I would be very much surprised to find that “holding the line on tuition charges” is among them.