Being President and CEO

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By Don McHoull

Leaning against his wooden podium, Claude Lajeunesse tried to ignore the throng of student protestors who surrounding him.

Ryerson’s president was midway through his 2001 state of the university address and things weren’t going well.

Angry students were constantly interrupting him, blowing on kazoors and trying to shout him down.

As Lajeunesse began to outline his plans for the university’s future, on student bellowed “And another pay raise for you, huh, Claude?”

Without missing a beat, the president responded, “I hope so.”

Lajeunesse had every reason to expect a pay hike. The last decade has seen an unprecedented explosion in the salaries of university presidents in this province including — for the purpose of this article — for principal of Queen’s University and the rector of the University of Ottawa.

Between 1996 and 2002 — the most recent year for which data is available — the average presidential salary rose by almost 40 per cent to $243,300.

By contrast, inflation for that period was about 11 per cent.

If salaries continue to rise at this rate, by 2025 the average university president in Ontario will be making one million dollars a year.

What set off this salary escalation? Dan Lang of the Ontario Institute for Studies in Education at the University of Toronto says it has been driven by cuts in government funding, which have made the job of running a university much more complex. Presidents are now expected to raise funds and make profitable research and business deals to help cover costs.

Lang says salaries began to rise in the mid-nineties, as universities hired a new generation of more financially-savvy presidents.

“As the job description changed so has the compensation.”

Where universities could once find presidents by promoting and giving a small raise to a department head, they are now forced to look father afield, Lang says.

“Once the job changed, the market broadened,” he says. “It became difficult for universities to resist it, because they’re competing for the same people.”

In 1997, York University hired Wilfred Laurier University’s president, Lorna Marsden. Laurier in turn hired President Robert Rosehart away from Lakehead University. When Windsor’s president, Ronald Ianni, died in the fall of that year, the university replaced him with Laurentian President Ross Paul.

This compensation for proven leadership sparked a sharp increase in salaries. In 1998 the average salary rose by almost $15,000, or 8.5 per cent.

The real surge came in 2000, when the University of Toronto hired Robert Birgeneau to become its 14th president.

Birgeneau had ben the dean of the School of Science at the Massachusetts Institute of Technology, one of the richest private universities in America. To pry Birgeneau away, U of T paid him $363,000 a year.

If Ontario universities want to compete with private American universities — some of which pay their presidents more than U.S. $800,000 a year — they still have a way to go, Lang says.

“If they place themselves in the North American market, even though it may seem like presidential salaries have risen unreasonably in Canada, they’re still maybe a third of what they’d be in the States,” he said.

Birgeneau’s massive salary sent ripples throughout the province. In the first two years after his hiring, the salaries of other Ontario university presidents shot up by 13.5 per cent.

In 1996 only three universities paid their presidents more than $200,000 a year, but by 2002 only tiny Nipissing University failed to clear that threshold.

Coupled with a steady rise in tuition over this same period, soaring presidential salaries have some student leaders fuming.

“If university presidents are sincere when they come to us and say they need to raise tuition because they’re cash-strapped, I think it’s fundamentally hypocritical that they would turn around and give themselves such generous raises,” says Joel Duff, the Ontario chairperson of the Canadian Federation of Students.

Duff says that high salaries have put university presidents out of touch with the impact of rising tuition.

“A thousand dollar increase for Robert Birgeneau means the difference between going home at noon or not,” he says. “For the average wage earner, it would take a week, or a week-and-a-half to earn that much.”

According to a report released last year by the CFS, assuming he worked a 40-hour week it would take Ryerson’s president five days to pay for a year of tuition, versus more than seven-weeks for the average Canadian worker.

Lajeunesse says that big a university president is not about earning a high salary.

“Nobody comes to a position like this for the money,” he says.

Jack Diamond, an associate with the executive search firm Janet Wright and Associates, backs Lajeunesse up.

“Given the range of business and political skills required, it’s undoubtedly true that many university presidents could be making more if they were in the private sector,” says Diamond, who has experience in searching for university presidents.

A case in point is former U of T president Robert Prichard. A year after leaving the university in 2000, Prichard became CEO of Torstar Corporation, where last year he was paid more than a million years.

Michael Guerriere, the chair of Ryerson’s Board of Governors, says that Lajeunesse could take a similar route if he was so inclined.

“With Claude’s engineering skills there are a lot of places that would love to hire him,” Guerriere says.

Lajeunesse’s base salary was set when the university hired him in 1995. His pay raises are determined by the audit committee of the board, based on an annual review process. Guerriere says the criteria used to evaluate the president’s performance fill more than 10 printed pages.

While the president’s salary is largely based on how well he meets the criteria, the salaries paid to other presidents are also taken into consideration.

“Certainly Ryerson needs to be competitive,” Guerriere says.

Lajeunesse actually did better than the average president between 1996 and 2002. His pay rose by more than 50 per cent, going from $155,973 to $235,887. Lajeunesse’s salary is now just below the provincial average for university presidents.

On top of his salary, Lajeunesse also receives benefits with a declared yearly value of more than $20,000, which includes things like health and dental insurance.

Guerriere says that if Ryerson didn’t keep pace with other universities in paying its president, it risked losing Lajeunesse.

“When you get a good president, you have a choice between paying him a good salary, or potentially having another university hire him away.”

Still, Guerriere says Ryerson did not use U of T as a benchmark for presidential compensation, focusing instead of universities of a similar size.

“I think we’re reasonably positioned n the industry right now,” he says.

As Ryerson looks to hire a new president next year, Guerriere acknowledges the university may have to dole out another pay hike, but doesn’t plan any radical changes.

“We don’t target to be the highest paid, and we don’t target to be the lowest paid,” he says. “Our goal is to be in the middle of the pack.”

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