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How Can HR Help Inform Executive Compensation Decisions?

money-scales-blogThere has been no shortage of news stories over the past few years about university presidents who receive large paychecks. In fact, many presidential salaries are a source of controversy, both within their campus communities and the public at large. There was a time not too long ago that a university leader’s pay was a closely kept secret between that individual and the chair of the institution’s governing board. However, with an increase in government regulation and stricter sunshine laws, university presidents’ salaries are now easily accessible to the masses, and transparency is expected. Boards are also held accountable for the reasonableness of the compensation paid to presidents.

In most cases, governing boards are still the sole entity responsible for recruiting, hiring and setting compensation for a university president. But human resource leaders can provide valuable support, particularly in informing compensation decisions. How?

  1. By working with the board of trustees to create a compensation philosophy for the president’s position and for all employees of the university. A compensation philosophy is a set of guiding principles that drives compensation and compensation decision making. The compensation philosophy for the president should be reviewed and approved by the board. Some boards reaffirm the compensation philosophy annually.
  2. By providing benchmarking data on executive compensation (including executive-only benefits and perks) at peer or aspirational institutions. The large paychecks make the headlines, but many presidents are paid at levels that don’t compete with peer institutions or acknowledge the complexity of their positions. An easy way to access this kind of data is through CUPA-HR’s Administrators in Higher Education Salary Survey.
  3. By providing data to support and justify compensation decisions for all employees. If the compensation philosophy communicates the intent to pay employees at the 50th percentile of the peer group, there must be reliable data to guide the organization’s decision making. (Again, CUPA-HR’s salary surveys are a trusted source for this kind of data.)
  4. By helping boards of trustees understand and communicate the complexities involved in managing a multimillion dollar, or even a multibillion dollar, organization with hundreds or thousands of employees and hundreds or thousands of students.

As you can see, it’s all about the data. Using reliable data to guide decisions around executive pay and benefits helps the institution maintain transparency and withstand scrutiny. By providing boards of trustees with data and information, HR is uniquely positioned to serve as a value-added, strategic partner.

Are you in a position to provide this value-add to your governing board? Is the data you have reliable and up-to-date? By participating in and purchasing results for CUPA-HR’s Administrators in Higher Education Salary Survey, you’ll have the ability to access data on executive compensation at more than 1,200 higher ed institutions. While you’re at it, check out our other higher ed salary surveys, collecting data on professionals, faculty, non-exempt staff and more. Data collection for all salary surveys runs through January 13.

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