Administrators Not Created Equal

In The Chronicle of Higher Education, writer Don Troop highlighted the current controversy at the University of Michigan concerning how much the university pays its administrators. At Ann Arbor in 2005, they paid less than $13 million on “additional pay” (i.e. bonuses) to administrators for meeting performance goals or taking on additional duties not in their job descriptions. By 2013, Michigan paid more than $46 million for these kinds of bonuses.

A dozen professors at the university have published their research, including an open letter, on the website michiganexposed.info, where they call on the Michigan board and incoming president Mark Schlissel, to rein it in.

When the professors took a look at the additional pay, and compared it to the likes of the University of Virginia, Texas at Austin, Cal-Berkeley and UCLA, Michigan pays its administrators between 127-141% more than those schools. The University of Michigan, unlike the schools listed above, does not report these pay amounts in addition to base salary.

For example, the professors found that the former associate vice president for finance, Rowan Miranda, was paid a salary of $330,000 and received $130,000 in additional pay. He was an adjunct professor of public policy, but the additional pay irked professors. An associate professor of history, Dario Gaggio, said the additional pay added even more to Miranda’s “already generous salary.” Miranda’s salary was leaked and floated around on the Internet, which led to the investigative project in the first place.

Some other examples:

• The school’s chief information officer, Laura Patterson, earned $279,545 in 2010 with $70,585 in additional pay;
• The dean of the School of Kinesiology, Ronald Zernicke, saw an additional pay of $51,350 added to his base salary of $256,207; and
• Cynthia Wilbanks, the vice president for government relations, earned a base salary of $296,324 in 2013 and additional pay of $58,007.

Gaggio acknowledged that professors do take on additional duties at the school. But, the major problem is that the additional pay is for faculty members and non-administrative staff who take on administrative roles, not administrative staffers who add more administrative duties to their work.

During this controversy, there is significant turnover taking place with the school president retiring and their chief financial officer moving on to the University of Phoenix. The changes occurred while the University of Michigan raised $4 billion, while touting a Shared Services Center to house faculty members and cut costs. The Shared Services Center was a plan to save between $6-17 million per year, and involved faculty members to moving out of their academic offices into a building off-campus. The school also paid Miranda’s former employer, the consulting firm Accenture LLP, $11.7 million to manage the cost-saving measure. The cost-saving initiative enraged professors so much that the project was postponed. Gaggio called it a project that “dehumanizes” professors. The person in charge of the plan, associate vice president for finance Rowan Miranda, has since moved on to the University of Chicago.

A spokesperson for the university, Rick Fitzgerald, dismissed the term “bonuses” and said that these are typical for universities for those that take on extra administrative duties, which mostly go toward faculty and not administrative staff members.

Fitzgerald defended the salaries and emphasized, “In some cases, I’m sure these look like generous salaries,” yet the school has to retain and recruit the best talent available. He also said, “It seems smarter” to pay administrators for additional duties and “not bake it into the base pay” for those types of positions or other future administrators would require a higher base salary. Fitzgerald also pointed out that workers can meet performance goals to see additional pay, and that those in the school’s chief financial officer’s department earn half was much as they would elsewhere.

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