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Are heads of Australian universities worth a million dollars?

UNSW vice-chancellor Ian Jacobs is a world-renowned cancer specialist.

UNSW vice-chancellor Ian Jacobs is a world-renowned cancer specialist.

Sydney University’s senate is tipped to choose an overseas candidate to replace Dr Spence, as most bosses of leading Australian institutions are either new in the job, retiring or too much of a rival to poach, such as the University of NSW’s Ian Jacobs.

The salary will help lure candidates from a top-100 or even top 50 institution, as industry insiders say it’s likely Sydney will want an experienced executive to help it navigate the disruption caused by COVID-19.

Australian vice-chancellors out-earn their counterparts in the United Kingdom, where salaries are also a touchy issue. They also earn more than Australia’s Reserve Bank governor ($1 million) and the prime minister ($549,250).

Last year, the median pay of chief executives of ASX 100 chief executives was $1.76 million.

Macquarie University accounting professor James Guthrie, who calculated the salaries, described them as ridiculously high. “These are public sector universities, so they should be treated as public servants,” he said.

But others say Australian universities are huge by international standards – Sydney University has more than 70,000 students, compared with 43,900 at Dr Spence’s next university – and running them requires a rare set of skills.

Vice-chancellors in Australia are highly-paid, among them are: University of Sydney's (Michael Spence) at left; University of Melbourne's (Duncan Maskell); University of NSW's (Ian Jacobs); University of Wollongong's (Paul Wellings) and University of Western Australia's (Amit Chakma).

Vice-chancellors in Australia are highly-paid, among them are: University of Sydney’s (Michael Spence) at left; University of Melbourne’s (Duncan Maskell); University of NSW’s (Ian Jacobs); University of Wollongong’s (Paul Wellings) and University of Western Australia’s (Amit Chakma).

“I do think most of them earn their money,” said Steven Schwartz, who has been a vice-chancellor at three universities. “Sydney University is huge. I don’t think people really understand how huge it is. It’s not just big by Australian standards, it’s big by world standards.”

When universities appoint vice-chancellors, most choose someone with an academic pedigree, Professor Schwartz said. Professor Jacobs is a world-renowned cancer specialist, and the Australian National University’s Brian Schmidt has a Nobel Prize.

“People like that come with the built-in respect of the academic community,” Professor Schwartz said.

But vice-chancellors also had to deal with politicians, donors, students and overseas governments. “These constituencies have conflicting demands,” Professor Schwartz said. “[The donors] want people to win Nobel prizes.

“Students want excellent teaching, people who care about their progress. The government wants everything to be done as cheaply as possible. Sometimes balancing the demands of the different groups is the hardest thing of all.”

Jillian Broadbent says university vice-chancellors should not be paid as public servants.

Jillian Broadbent says university vice-chancellors should not be paid as public servants.Credit:Nick Moir

Andrew Norton, professor in the practice of higher education at the Australian National University, said it was a demanding job.

“You need to be able to manage a large organisation, you need to deal with a difficult principal client, the Commonwealth government, and you need to deal with a ruthless international student market,” he said.

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“I don’t think they should be paid peanuts, but I think a million-plus is creating a lot of problems the sector doesn’t need. It creates resentment from staff, and [members of Parliament] are sniping. It’s ammunition for anyone who thinks universities have lost their way.”

Salvatore Babones, a fellow with the Centre for Independent Studies and a Sydney University sociologist, said university presidents in the US earned as much or more, but were also required to raise billions of dollars in donations.

“We academics have been told by senior administrators that we believe we should benchmark our salaries to Australian civil service salaries,” he said. “I don’t see why vice-chancellors should not be similarly benchmarked.”

But Jillian Broadbent, a former chancellor of the University of Wollongong and a business leader, said vice-chancellors should not be classified as public servants, as they had more responsibility.

“They’re a chief executive,” she said. “Civil service jobs are pretty underpaid themselves. But they’re under instruction from the minister. There’s a lot more independence given to the vice-chancellor than to the head of a department.”

The Australian Association of University Professors argues a VC’s pay should be double a professorial salary, which would equate to $360,000 a year.

Dr Spence finishes at the end of the year. Provost Stephen Garton will be acting vice-chancellor until a replacement is announced. “The search for our new Vice-Chancellor is ongoing and we hope to have an update this year,” a Sydney University spokeswoman said.

“The package will be negotiated with the successful candidate at the relevant time. We expect it will reflect the scale of the role and the size of our institution and take into account all relevant skills and experience of the successful candidate.”

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