The NY Times reports that University Presidents continue to be paid quite well. Â The Marginal Revolution blog reports that coaches are earning larger raises than these Presidents. Â An ongoing economics literature has studied CEO pay and how it tracks corporate performance. Â A famous early paper is available here. Â Â Another well known paper documents that CEOs often receive big pay for good luck. Â Â For an accessible overview of executive compensation that argues that CEOs are paid for performance, read this.
I realize that University Presidents are not corporate CEOs (but do they know that?). Â In the case of evaluating University Presidents, what is the right performance criteria? Â In the case of public firms, their firm’s daily stock price contains information that is continuously updated. Â What new information arrives about the performance of the University Presidents? Â Given that a University is a bundle of a zillion things, how do you tease out the President’s value added? Â On the supply side, why isn’t there more competition for University President slots? Â Why can’t a tenured associate professor be named President if she has the “right stuff”? Â Why must entry barriers of previous service as a Dean or Provost be introduced?