URBANA – In light of furloughs, layoffs, tuition increases and program cuts, a 37 percent increase in the University of Illinois president's salary didn't exactly go over well on campus.
Reaction was swift to the news that Michael Hogan, the incoming UI president, will receive a base salary of $620,000 a year, plus $225,000 in deferred compensation after five years.
"It seems high, given the extraordinary financial pressure that we've been told the university is under," said Professor Harriett Murav, a leader in the Campus Faculty Association.
UI officials characterized it as a slight pay cut for Hogan, who was entitled to a total of $745,000 in total compensation this year as president of the University of Connecticut but turned part of it down because of that university's budget problems.
Hogan earns a lower base salary at UConn, $577,500, but also receives annual retention bonuses, bringing his current compensation to $615,000, said university spokesman Michael Kirk. Hogan turned down a 5 percent pay raise this year, and $100,000 incentive bonuses each of the last two years, because of the university's budget problems, Kirk said. He would have been eligible for more than $750,000 next year.
At the UI, in addition to his $620,000 annual salary, Hogan will accrue annual retention bonuses starting at $30,000 the first year, $37,500 the second, $45,000 the third, $52,500 the fourth, and $60,000 the fifth – a total of $225,000, UI spokesman Thomas Hardy said.
Former UI President B. Joseph White and interim President Stanley Ikenberry received $450,000 annually, although Ikenberry's pay is prorated because he will hold that job for less than a year.
Professor Joyce Tolliver, chair of the campus faculty-student senate, said Hogan's salary was the subject of e-mail traffic on campus Wednesday.
"I think a salary that substantial is a heavy responsibility," Tolliver said.
Ikenberry and other top UI officials said the reaction is understandable, but said they wanted to attract the best possible candidate for the UI and had to pay market rates to get him.
The total compensation package for Hogan falls in the middle of the Big Ten, behind Ohio State and Michigan and alongside Minnesota and Penn State, Ikenberry said. And it's far below what private schools are paying, a gap that's widening each year, said Trustee Pamela Strobel, who chaired the presidential search committee.
"I do not in any way think it's excessive or unjustified," Strobel said. "It's the world we live in. It's not the world we've created."
The presidents of Northwestern and the University of Chicago receive close to $900,000, Hardy noted. E. Gordon Gee, president of Ohio State University, tops the Big Ten with a $1.5 million package. And the president at Michigan earns close to $750,000.
"We're getting the best guy available and we're not paying top dollar," board of trustees Chairman Chris Kennedy said.
Murav suggested the university could have brought Hogan in at a lower salary the first year and raised it in later years of his contract – "some arrangement that recognizes the sense of crisis that has been imposed upon us."
"We would have preferred that. But we may not have been able to get him," Strobel said, though she would not say whether that offer was made.
"He will earn every penny of his salary, I'm certain of that," Strobel said.
"That's the market. It's not unlike athletics or anywhere else where we have to pay competitive salaries to attract and keep the very best people," she said.
A private sector CEO with a $4 billion corporation and 28,000 employees would earn much more, Hardy said.
"I'm shocked they're paying him so much money. That's running education like a business rather than a public school," said UI sophomore Ben Rothschild, member of the Undergraduate-Graduate Coalition.
"People are very insecure in this economy. He's going to be very comfortable. It seems kind of hypocritical in this environment."
Murav said the salary is surprising in light of the proposed 9.5 percent tuition increase for new students next year, "in light of the fact that we were furloughed, that staff, academic professionals and teaching assistant positions have been cut, that they're pushing for these voluntary retirements that are going to shrink our staff."
"We are looking at limits to accessibility when we raise tuition. We are looking at a chilling effect on the applicant pool. People will not apply, people will not permit their children to apply if they think it's too expensive," said Murav, professor of Slavic languages and literatures and comparative and world literature.
Overall, Murav said she was pleased that trustees chose someone who "is an existing university president, that he's not a corporate hire, that it's someone in the humanities."
Robert Rich, director of the UI's Institute for Government and Public Affairs, said Hogan's "outstanding credentials" warranted his salary.
"I think faculty are likely to think we needed to give this man a competitive salary in order to attract him," he said. "I'm very pleased to attract someone of his caliber. It bodes well for the future of the University of Illinois."
Graduate student Peter Campbell, until recently communications director for the Graduate Employees Organization, said it's important to be able to attract top-quality administrators, but "for somebody committed to excellence at a public institution, that $600,000 shouldn't be something that's necessary to bring that person over."
"The university needs to be moving in the direction of prioritizing teaching and research in terms of its funding, and not increasing the size of administrative salaries – especially when other comparable institutions are looking at decreasing administrative salaries," Campbell said.
Student body president David Olsen noted that the salary is "significantly higher" than what previous UI presidents were paid.
"My initial reaction is that it seems pretty high, but I'd definitely like to see the full package and see the reasoning behind it," he said.
"There's been a lot of pain for students and employees of the university," he said. "Some members of the community were already concerned about administrative salaries before this occurred. That can only heighten that concern."