Are college chief executives paid like corporate CEOs or bureaucrats?

Ying Sophie Huang and Carl R. Chen

Applied Economics, 2013, vol. 45, issue 21, 3035-3043

Abstract: We study compensation of college chief executives from 1997 to 2004. Although presidential salaries have acquired the attention of the media, Congress, and the Internal Revenue Service (IRS) in recent years, they are much below those of corporate CEOs. Compared with CEOs in corporations with comparable sizes, college chief executives earn on average approximately one-third of the compensation of their corporate counterparts. However, CEO compensation is more volatile than that of college chief executives. Our results show that private college presidential salaries are consistent with the prediction of job complexity and institutional reputation hypotheses. Presidential compensations of public research universities, on the other hand, are more consistent with the prediction of job complexity hypothesis only. Hence, our findings do not support the prediction of bureaucrat hypothesis for both private and public institutions.

Date: 2013
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DOI: 10.1080/00036846.2012.695070

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