Go West, ambitious university president

Pay packages appear to be bigger out West — but that may be because BC and Alberta disclosure is more honest

Aspiring university presidents and senior academics looking to maximize their market value may want to look to Western Canada, where the leading universities appear to be offering their top executives compensation superior to that offered in the rest of Canada.

According to the most recent salary disclosures, at least six Western Canadian university administrators are making more than Ontario’s most highly paid university president, McMaster University’s Peter George. In 2008, George reported salary and benefits worth $534,000. During the 2007-08 fiscal year, four senior executives at the University of Alberta, including the president, were paid more. Indira Samarasekera, the U of A’s president, received salary and benefits worth $627,000. Her number two, provost Carl Amrhein, earned $618,000. Two other executives at the U of A earned more: Phyllis Clark, VP of finance and administration, received total compensation worth $654,000 and Don Hickey, VP of facilities and operations, received $668,000.

The president of the University of Calgary, Harvey Weingarten, earned $557,000 in total compensation in 2008. Stephen Toope, president of the University of British Columbia, received total compensation worth $579,000.

In Ontario, the next highest paid president after McMaster’s George is Waterloo’s David Johnston; in 2008, he received $488,000 in total compensation. The third most highly paid Ontario president was York University’s Mamdouh Shoukri at $464,000.

The pay seems higher out West — and that is in part due to the stated objective of some Western universities to offer executive pay that meets or exceeds what’s offered by top institutions in the rest of Canada and the United States. For example, UBC explicitly benchmarks its president’s salary against those peers. “UBC is one of the highest ranked universities in Canada, and one of the top 40 universities in the world,” says the university’s statement on senior administrator compensation. “As such, UBC seeks to retain and attract the best senior administrators it can by remaining competitive in its compensation practices with other large research-intensive universities represented by the G13 (i.e., leading research-intensive universities in Canada), and in particular the University of Toronto and the University of Alberta, and with the global market for senior administrator talent generally.”

David Naylor, president of the University of Toronto, reported $430,000 in total compensation in the most recent year: $380,000 in salary and $50,000 in benefits.

The pay packages appear to be larger out West, but that may be partly an accounting wrinkle: compensation disclosure by Alberta and BC universities is more honest and complete. In Ontario, as in BC and Alberta, executives must report base salary and other compensation. However, Alberta and BC appear to be fully (or at least more fully) expensing the cost of their senior administrators’ supplemental pension payments, whereas Ontario’s salary disclosure does not appear to include this. Pension costs are not cash payments made in 2008, but rather the estimated present cost of the pension benefits earned in 2008. Many Canadian administrators are going to get large pensions on retirement, the cost of which in the present is substantial, and should be recorded and disclosed. Out West, it is.

For example, U of A president Samarasekera’s total compensation of $627,000 exceed that of every Ontario university president. However, her base salary of $436,000 is less than the base pay given to the top three Ontario presidents. What puts her total compensation over the top is $191,000 in “other non-cash benefits.” The largest part of that is pension benefits. UBC’s compensation disclosure for president Toope breaks it down even further: $378,000 in salary, a bonus of $50,000, “other compensation” of $65,000 and pension expense of $85,000. Ontario’s Sunshine Law salary disclosure covers the first three of those items but does not appear to completely cover pension expenses.

For example, it was revealed last year that, on retirement, McMaster’s George is set to receive a golden handshake of $1.4 million, paid out at the rate of $99,999/year for 14 years. This does not appear to have ever been accounted for in McMaster’s disclosures under Ontario’s Sunshine List. (It is not clear how such a payment — which McMaster does not consider a pension — would be treated by Alberta or BC compensation disclosure requirements). Nor does it appear that Peter George’s supplemental pension benefits have been disclosed as completely as those of his Alberta and BC peers. McMaster’s Sunshine Law disclosure says that George received salary of $524,000 and “taxable benefits” of less than $10,000. It seems a safe bet that the cost of his various pension and other benefits is considerably larger than this, but Ontario’s transparency law does not require quite as much transparency as BC and Alberta.

Comparing “total compensation” at Alberta/BC universities with those in Ontario is thus not always an entirely equivalent comparison, as it may somewhat understate the compensation of Ontario administrators. (That wording is deliberately chosen: it’s not that Alberta and BC are overstating executive compensation, but rather that Ontario is understating it). The bottom line, however, is that senior administrators in Alberta and BC are well paid, and at top universities, senior executives’ salaries compete with what is offered by leading universities in Ontario. No matter how you slice it, Western presidents aren’t getting short changed. For example, in 2008, U of A president Samarasekera’s total compensation rose 6.1 per cent.

(Ontario presidents aren’t exactly suffering, either).

And what about those senior execs at the U of A who earned more than the president? The university’s annual report explains that “in the current year, certain individuals became eligible for an additional six month professional leave. Included in non-cash benefits is the equivalent of an additional six months salary for Vice-President Finance and Administration ($176,000) and Vice-President Facilities Operations ($179,000).”

The two VPs, Clark and Hickey, were not paid those benefits in 2009 — but, in another act of Western accounting honesty, the university calculated and reported the cost of their six month leaves (which they will take later, perhaps after retirement) on its 2008 statement of executive compensation.