Once again, David is on the warpath about Morty’s level of pay and compensation. Yes, $325,849 in salary and $423,005 in total compensation is a lot of money and I would gladly accept that salary. But perhaps excellent leadership costs that much on the open market.
To get a sense of this question, I compiled a data set with presidential salary, benefits, total compensation, college expenditures, college revnues, average compensation for full professors, enrollment, the year the President was hired and endowment for William’s Peer Institutions (defined as the top 25 liberal arts colleges in the US News & World Report plus NESCAC members).
Morty’s pay ranks 8th out of the 27 schools.
Morty’s total compensation ranks 4th out of 26 schools (Hamilton’s outgoing President received defered compensation that ballooned his compensation over $1 million).
So, Morty is paid well, but there are at least other schools willing to pay their President’s more.
However, one might argue that schools with larger endowments and enrollments are more complicated to run than smaller schools, so Presidents should be paid more. So I ran a set of regressions controlling for most of the variables in the data set. The idea is to get an estimate of how much a president at a hypothetical school like Williams would be paid on average.
The bottom-line is that Morty makes more than the average college president. A hypothetical top 25 liberal arts college like Williams might pay its President $317,343 — meaning that Morty is overpaid $8,500 or so. With regards to compensation, the Morty premium is higher. An average hypothetical institution would pay its President $391,497. Morty receives $423,005, so the difference is $31,508. The salary figure is well within the 95% confidence interval for the predicted pay, but Morty’s total compensation is right on the edge of the 95% confidence interval. I take this to mean that Morty’s benefits are probably above average (and David should probably direct his ire towards the benefits package rather than the salary).
This quick analysis does not mean that Morty is necessarily overpaid. If you think Morty is a better leader than the average college president, then his extra skill might be worth the slight premium.
Of course, it is also possible that Williams’ peer institutions are schools like Dartmouth and Brown and not liberal arts colleges. The data set is small and does not include every possible comparison school (I spent longer compiling it than I should have). Selection bias might plague the analysis. Indeed, David could argue that all of the top liberal arts colleges are overpaying their presidents.
The goal of the post is simply to place Morty’s compensation in perspective.