/R14 61 0 R But in reality its the deans. The Australian Universities Vice-Chancellor and Senior Staff Remuneration Code 2021 states that: It is recognised that transparency is an important part of good practice remuneration ensuring that decision bodies, processes and outcomes are openly explained and presented to all stakeholders.. /Contents 50 0 R In fact, is a generously paying system. The Office for Students (OfS) has published new analysis on the pay of senior university staff in England. 10.32725/det.2021.023 As does the Australian National University. Professor Smith added most Australian universities lacked transparency, stating salaries in a range rather than exact amounts, which included a sleight of hand given they sometimes included bonuses and rent arrangements. >> It will be hard for an incoming Labor government not to put the screws on those universities that made money while laying off staff. Salaries are paid in contractual exchange for work undertaken and are a cost of production. ANUs $260 million Kambri Precinct has transformed the campus. He said Sydney was arguably the highest paying university in Australia in what is on average the highest paying university system in the world. Help using this website - Accessibility statement, negotiated a salary that was $300,000 less than his predecessor, University Foreign Interference Taskforce. /Resources << True "Australia is not the colonies any more. He also donated $40,000 to a student hardship fund. Benchmarking and pay tournaments explain the mechanics of how this is happening, but not why salary resources are allocated in this way. 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. My big problem is that this is the government of the day, he says. However, 12 universities had a change in leadership during the year and six had not publicly reported their financial data at the time of writing. The estimated base pay is $97,675 per year. >> He was fourth on the list, but fortunately for Schmidt, the three other contenders received offers elsewhere. /Subject (DETUROPE - The Central European Journal of Regional Development and Tourism 2021, 13\(3\):130-141, doi: 10.32725/det.2021.023) >> Baimbridge and Simpson (Citation1996) correctly hypothesised that the ending of local authority control over the old polytechnics and colleges as they entered the university sector (becoming the post-1992s) would lead to a rapid escalation in VC remuneration. Econometricians also looked at what might be driving these pay hikes. Help using this website - Accessibility statement, earnings are about half the previous figure. When a vice-chancellor is paid twice the salary of the prime minister, it does seem something is a bit wrong, said Mr Norton. The second root cause of the over-compensation of VCs in both Australia and the UK, as we have highlighted, is that many officially sit on their own universities remuneration committees. Is vice chancellor pay justified by university performance? Imperial College London's Alice Gast got a bumper pay package of 554,000 last year, placing her top of the table of VC pay, The Tab can reveal. Vice-Chancellor's introduction It has been said that 2020 was an unprecedented year for the whole world - and ANU was no exception. 16 0 obj These bands are set by the owners of public universities, that is, state and territory governments. academic workforce casualization It has been estimated that over 17,000 people lost their jobs in the university sector in 2020. Another four have sacrificed 10 per cent, two have made one-off donations and another is considering how much to forgo. University of Queensland. /ProcSet [/PDF /ImageC /Text] Bergami Roberto endobj The University Chancellors Council must act now to deliver on the purpose of the code. /Resources << 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. By 2020, Australia had 39 self-governing and self-owning publicly funded universities. The UCC needs to make good on its promise to support member Universities in this transition through: * provision of best practice templates for the reporting of remuneration. Governments could, for instance, set fixed ratios between VCs remuneration and mean academic salaries. endobj Australian universities, academic workforce casualization, vice-chancellor salaries, quality of education (Bachan & Reilly, Citation2015, p. 70). Dr Spence told the inquiry that in 2020, Sydney University identified 247 academic staff and 45 administrators paid more $250,000 a year. Agency theory casts owners as principals and managers as their agents, with both seeking to maximise their own financial position at the expense of the other (Ross, Citation1973). Add articles to your saved list and come back to them any time. This arrangement came to an abrupt end in the 1980s under Margaret Thatchers governments (Shattock, Citation2006). /Rotate 0 A spokesperson for the University of Melbourne said the gross remuneration figure published in the universitys annual report did not take into account the pay cut he and other senior executives took for six months. We then review the existing literature on VCs remuneration, and describe the techniques utilised that drive increases. /Title (Australian Public Universities Vice-Chancellor Salaries and Workforce Casualisation: Ethical Tension?) In the first half of the twentieth century, they were largely funded by the states, . In August 2021, the University Chancellors Council (UCC) released a voluntary code to benchmark the salaries of university vice-chancellors and promised to benchmark senior executive salaries in public universities. /Rotate 0 /XObject 41 0 R Soaring vice-chancellors' salaries in Australia and the UK reflect a "clear failure of university governance" that demands political intervention, researchers say. /Resources << endobj Just a few months earlier he had met her mother, Daphne who was at Harvard visiting her daughter when she came across Schmidt making strudel on a bedsheet in the residential halls kitchen. Despite finding the job really hard, Brian Schmidt, the only Nobel Laureate to head an Australian university, doesnt care about being paid as much as his peers. Schmidt and Gordon have a pretty bush block near the small town of Sutton, a 30-minute drive from Canberra. Staff - Research roles. The union said that a typical university chief would earn the equivalent of a professional employees annual pay rise by lunchtime in a single day, and a senior lecturers salary increase by afternoon tea. Gordon, who is now the chief economist at the Department of Foreign Affairs and Trade, and Schmidt finished their PhDs within a few weeks of each other in 1993. That is, university councils are not sufficiently empowered or self-interested in the financial affairs of the university to act as effective principals none of their actions have the potential to maximise their own financial positionFootnote3 at the expense of vice-chancellors as agents and hence they are unable to exercise effective control as governors with respect to levels of VC remuneration. Market-based salary setting mechanisms, such as benchmarking, appear to drive these increases. He is also the Director of the Grattan Institute, Melbourne Business School and the Melbourne Theatre Company . C`fTmZK M(VePt5PT@9\AUVmk}K PeC?PR0m+Lw8^+NQL%KwU)7XRfBFe I%>~n+&:Sf2osq4 )u`iTnc^j1ZUhO5myv$ZkK3gHz{anw/i+KsY94[f M|6wjl-i@_^UV#}Uwh s;mIp'N}|fi;eT #2 Submitted by T. on September 2, 2018 - 5:53pm. 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. The role of the Academic Salaries Tribunal means that Australia has a relatively well-defined point at which VC salaries were deregulated and the effect of this can be demonstrated empirically. As such, it is important to consider whether students and the public are getting value for money from these salaries. 18 0 obj (Bachan & Reilly, Citation2015, p. 69). >> It is an incredible honour, but to my mind an incredible responsibility at the same time.. Australias National Tertiary Education Union, however, has raised concern that vice-chancellors earned eight times the salary of senior lecturers in 2017. In 2004, a new academic pay framework and salary spine were agreed with the unions, allowing some local flexibility based on job evaluation, in response to the growing realisation that academic salaries were not competitive (Rani, Citation2009). * sharing experiences of implementation and ongoing refinement of governance and reporting. endobj Our analysis has found that 60 per cent of uni . Recommended articles lists articles that we recommend and is powered by our AI driven recommendation engine. Stipends are paid by organisations (or their patrons) to enable unsalaried people to undertake activities deemed socially or organisationally valuable such as grant-aided research students (Mauss, Citation1924/Citation1990). Copyright (c) 2021 The author(s). In examining the public university annual reports for 2021, there are no disclosures per the voluntary code. Recognition Schmidt accepts the 2011 physics prize at the Nobel award ceremony in Stockholm. A bill put before the SA parliament last October sought to tie vice-chancellors salaries to that of the premier. As such, they dont have controlling owners/shareholders. A$1=0.57. Schmidt calculated his initial vice-chancellor's salary - which was $150,000 more than his 2020 pay packet - by benchmarking himself against international equivalents and the professoriate . Dr Spence has since taken up the role of of vice-chancellor at University College London where his earnings are about half the previous figure. Australian National University vice-chancellor Professor Brian Schmidt. Click here for the Complete List of Vice-Chancellor Pay & Salary Packages At Australian Universities. I am still an academic here., Vice-chancellors earn their high pay because the jobs are horrific, says Brian Schmidt. Salaries of the highest-paid university heads have shrunk since 2020, with the top job at Sydney University falling by about $500,000 when vice chancellor Mark Scott began in July 2021. But, in Australia and the UK, governments have opted for a hands-off approach, urging universities to behave like free-market organisations and not interfering in their internal affairs. Australian Public Universities Vice-Chancellor Salaries and Workforce Casualisation: Ethical Tension. His family moved around as his father, Dana, pursued an education in fisheries and aquatic biology. Executives get paid more than their work is worth, but less than the cost shareholders would incur in more closely monitoring them and executives are freed up to act entrepreneurially. Australia's population as at 20 September 2020 was 25,693,059 people (Australian Bureau of Statistics, 2021), with 39 public and four private universities in the nation. * report annually (Q2) each year on adoption of the UCC code. There is no evidence of a system of performance-based bonuses. Peter Bentley, from Innovative Research Universities, said analysis of tax office data showed that while the average taxable income of university lecturers was $99,848, in the top 10 per cent of all occupations, the average for university tutors was $19,112. I keep reminding people that a university is not a corporation, says Schmidt. That's after adjusting for a COVID-related reduction to his current pay and despite UCL rating higher than Sydney University on global rankings. 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. In 1994, it required universities, as with private firms, to declare senior staff remuneration in their annual financial accounts (Baimbridge & Simpson, Citation1996) (a requirement mirrored in Australia). Universities 2018 annual reports and financial statements reveal that VCs salaries ranged from AUD $1,582,500 [867,998] at the University of Sydney to AUD $622,250 [341,302] at Charles Darwin University. As in Australia, these increases are not indicative of general remuneration increases in the sector. /ProcSet [/PDF /ImageC /Text] >> /Parent 2 0 R 1 By vice-chancellor we mean the chief executive officer of universities. /Parent 2 0 R >> 2729). 2022-02-20T17:38:29+01:00 /Rotate 0 Karleen Minney. $100 million a year, still wouldnt do it. Australian Public Universities Vice-Chancellor Salaries and Workforce Casualisation: Ethical Tension? 3 We find a high degree of theoretically predictable and empirically verifiable correlation between rising VC remuneration levels and shifts towards more market-based governance regimes in Australian and UK universities. The biggest increases went to Central Queensland Universitys Scott Bowman, who had backdated his annual bonuses to the end of a multi-year contract, and Queensland University of Technologys retiring boss Peter Coaldrake, whose package is thought to have included a golden handshake. But Schmidts fateful 2018 decision to cap both domestic and international student numbers at 20,000, arguing that getting bigger would not make the university better, has contributed to todays crisis, in effect crippling the pipeline of students going into last year and set to play out over the next five or six years. It was the biggest town I had ever lived in. /Rotate 0 The select group of movers and shakers at the head of Australia's education-industrial complex have tapped into a source of wealth far greater than what would. I know there are reasonable explanations for the size of some of these surpluses and people are saying it is a one-off and wont happen again. Top 10 Vice-Chancellor Salary Packages AUD$, Please prove you are human by selecting the, Copyright 2015 - 2021 Australian Education Network - All rights reserved, Complete List of Vice-Chancellor Pay & Salary Packages At Australian Universities, List of Vice-Chancellor Pay & Salary Packages, Revenues and Surpluses At Australian Universities, Historical Development of Australian University Sector, University Bachelor Degree Completion Rates, QS Employability Rankings Australian Universities, ARWU World Rankings of Australian Universities, Top 10 Highest Paid Vice-Chancellors @ Australian Universities, ARWU World Rankings of Australian Universities Group of Eight (go8) World Rankings. Although we draw on empirical examples from both Australia and the UK, this is not a comparative article. Schmidt is a self-described extrovert; a people person with bucket loads of charisma, IQ and EQ in equal amounts. Salary. 3234). Agency governance was increasingly adopted in the corporate world from the 1970s. << This is done for transparency in terms of remuneration of senior public employees. But Melbourne University emeritus professor Frank Larkins said vice-chancellors high salaries reflected the increasing demand that Australian universities operate like businesses, including chasing ever more revenue from international students in order to fund their operations and cross-subsidise research. And I save a lot, even on my current salary.. Schmidt is garrulous; his Montana drawl tamed by 30 years in Australia. I just dont care that much about money, the 54-year-old says. Australia's 38 public university vice-chancellors were paid an average $890,000 in 2016, and 12 earned more than $1 million. The Vice-Chancellor's salary for 2021 was $670,607 with overall reported remuneration currently in the range of $850,000 to $859,999 (2020: $940,000 to $949,999). This alignment makes it rational and efficient to trust the steward and extend them significant autonomy, with remuneration playing a less prominent role in motivating them. In agency governance, executive remuneration will always exceed the true economic wage because it is designed to be at the optimal point to maximise return to the shareholder in a trade-off between surveillance/control costs and rewarding managers, such that they promote shareholder interests above their own (Jensen & Meckling, Citation1976). Licensed to the public under Creative Commons Creative Commons Attribution 4.0 International License license. During our lunch, Schmidt tells me more than half a dozen times that being a vice-chancellor is hard, really hard. 19 0 obj Savage cuts to university budgets from 1981 led the non-statutory Committee of Vice-Chancellors and Principals (now Universities UK) to establish the Jarratt Committee with Sir Adrian Cadbury, a significant figure in corporate governance reform, as a member. As these universities became increasingly corporatised and marketised, they adopted the rhetorics and logics of market-based agency governance. stream Averages include figures for v-cs who served less than a full year, #1 Submitted by GavinMoodie on August 31, 2018 - 7:57am. Neither camp could have predicted the weather, the pandemic or the politics that have battered Australias national university. /Type /Page He applied for the only position available at Stromlo. /R10 59 0 R Login, Michael Spence maintains status as Australias highest-paiduniversity leaderdespite cut in salary, Average pay packages in Victoria push towards the A$1 million mark amid questions over whether spending more gets you better leadership, Average remuneration for university heads in Queensland in 2017 stands at twice the equivalent UK figure, Our annual pay review details v-cs remuneration, explores the make-up and workings of the governing bodies that set it, and compares the rewards on offer with those of other sectors, Mechanisms to determine university leaders salaries are opaque and unreliable. /Length 62 0 R * biennially review the effectiveness and currency of this code.. But he said downward pressure would continue to be applied on vice-chancellors pay packets in the next few years while revenues remain lower and the sector battles to rebuild its international student markets. Whilst agency theory posits a strong correlation between performance and pay, empirical research has demonstrated only a weak relationship between corporate executive pay and organisational performance (e.g., Gritsko et al., Citation2013; Marshall, Citation2017). Mr Norton said that it was ironic that vice-chancellor salaries attracted more criticism in the UK than Australia. This tends to generate a race to the top pay rises in one university ripple through the others. At the UKs University of Bath, for instance, the council has been criticised for being too cosy and too socially aligned with the VC: There is a tendency to want to have a highly paid vice-chancellor because it shows what an important job Im doing as a lay governor, says Shattock, who also believes that the inexorable rise of university leaders salaries is, to some extent, caused by laziness. To put it plainly, ANU has had a rough few years. Emeritus Professor James Guthrie AM, Professor of Accounting, Macquarie Business School, Source: 2019-2021 Annual and Financial Reports, Note 1: salary bands were disclosed in annual reports, the high end of the pay has been used for the table. From the nineteenth century, the state increasingly funded universities, but the government took care not to exercise control as a consequence (Ainley, Citation2014). Brian Schmidt, the worlds only Nobel Laureate to head a university, was Australias lowest paid vice-chancellor in 2020 pushing his earnings to nearly half the sector average. 2020, Universities Australia 2020 Higher Education Facts and Figures 2020, . /Type /Page Do not underestimate the halo effect of having smart people around you, Schmidt says. endobj 15 0 R 16 0 R] It really is. /Keywords (Australian universities, academic workforce casualization, vice-chancellor salaries, quality of education) endobj He is poised to potentially receive the largest remuneration package in the country from next month when former ABC managing director Mark Scott begins at the University of Sydney on $500,000 less than his predecessor, Michael Spence, who was paid $1.53 million last year. Managers remuneration, therefore, reflects the cost of ensuring that they can be trusted, not the economic value of their contribution. Universities are public institutions funded primarily by fee-paying students and taxpayers. Lyn Mills. /Resources << It has been pummeled by hail, flood, fire and a massive cyberattack. If you like what you're reading online, why not take advantage of our subscription and get unlimited access to all of Times Higher Education's content? That was pretty bad. The first relates to principals. 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). "Chief executives are paid for their business acumen. Toward a stewardship theory of management, Compensation benchmarking, leapfrogs, and the surge in executive pay, CEO governance and shareholder returns: Agency theory or stewardship theory, Governing the twenty-first century university: A view from the bridge, Silent escalation: Salaries of senior university administrators in Ontario, 19962006, Changing patterns of governance for Australian universities, Reporting on vice-chancellor salaries in Australias and the United Kingdoms media in the wake of strikes, cuts and falling performance, Theory of the firm: Managerial behavior, agency costs and ownership structure, Chief executive pay in UK higher education: The role of university performance, An assessment of agency theory as a framework for the governmentuniversity relationship, Australian universities top world rankingsfor VC pay, The political economy of the rent-seeking society, Rank order tournaments as optimum labor contracts, Changing cultures in UK higher education: The state as corporate market bureaucracy and the emergent academic enterprises, Executive compensation as a corporate governance problem, Agency theory: Review of theory and evidence on problems and perspectives, The economic theory of agency: The principal's problem, Pay developments in Britain and Germany: Collective bargaining, benchmarking, and mimetic wages, University governance in flux.
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