University chancellors seek independent advice on executive pay

As academics criticise bloated executive salaries, university chancellors have proposed one way to make wage decisions more transparent.

University Chancellors Council convener Professor John Pollaers has called for more transparency over vice-chancellor pay.

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University chancellors want the Commonwealth Remuneration Tribunal to help set salaries for top executives, to ensure million-dollar wages are “publicly defensible’’.

In an about-turn, the University Chancellors Council has proposed that the remuneration tribunal, which dictates salaries for politicians, judges and top public servants, also “advise’’ universities on pay rates for vice-chancellors.

While stopping short of the Coalition’s election policy to let the tribunal set executive salaries independently, the chancellors have proposed a “partnership to provide independent, nationally consistent advice on remuneration’’.

The tribunal would be asked to ensure “remuneration settings are transparent, appropriate and publicly defensible.’’

The chancellors’ suggestion aims to short-circuit growing public criticism of vice-chancellor salaries that average $1m – with some earning more than $1.5m a year.

Federal Education Minister Jason Clare endorsed the plan on Tuesday.

“It makes sense to me that the Remuneration Tribunal plays a role here,’’ he said.

UCC convener John Pollaers, a corporate heavyweight who is chancellor of the Swinburne Institute of Technology, said the proposal would “strengthen public confidence, while preserving the autonomy of university governing bodies’’.

“Vice-chancellors lead some of the country’s largest and most complex public institutions,’’ he said on Tuesday.

“They are delegated responsibility from their university governing bodies to deliver public interest, academic excellence, and financial sustainability outcomes – advancing Australian national interests across research, innovation and education.’’

University Chancellors Council convener Professor John Pollaers wants the Remuneration Tribunal to advise on vice-chancellors’ pay.

The UCC wants to set up a working group to recommend how the plan could work, considering existing legislation, contractual obligations and perfor-mance-related benchmarks.

“This is about strengthening public trust through credible, sector-led reform,’’ Professor Pollaers said.

“This is part of a new approach to governance that listens, engages and responds. We see this as a timely opportunity to demonstrate leadership, transparency and a shared commitment to responsible governance.’’

At Melbourne University, former vice-chancellor Professor Duncan Maskell was paid at least $1.57m last year, before stepping down in December. University of Sydney vice-chancellor Professor Mark Scott was paid $1.33m last year, while University of Queensland vice-chancellor Professor Deborah Terry earned $1.15m.

Two Senate inquiries are probing vice-chancellor pay, with a bill introduced to federal parliament before the May election.

The UCC told a Senate inquiry into the bill that its existing voluntary remuneration code was “competitive, appropriate and trans-parent’’. It said it opposed a legislated cap on salaries for vice-chancellors and senior executives.

“Legislation such as this would undermine universities’ capacity to attract and retain the talent and expertise needed for these critical roles,’’ it told the Senate hearing.

“It ignores market realities, potentially making Australian universities uncompetitive in attracting and retaining world-class leaders, while undermining performance-based pay models.

“It increases risk of non-salaried and non-financial methods of remuneration, adding pressure on governance, and potentially exacerbating public concern.’’

The Council of Australian Postgraduate Associations told the inquiry that vice-chancellor salaries “have spiralled out of control and must be reined in’’.

“Increased workforce casualisation, wage theft and languishing education standards are all present while VC salaries appear to have no upper limit,’’ it said.

The National Tertiary Education Union has revealed 306 university executives earn more than the premiers of their states.

But Universities Australia chief executive Luke Sheehy complained to the Senate inquiry that the salary-cap bill “is yet another example of our sector being weaponised for political gain’’.

The Albanese government set up an expert council on university governance last year to advise on ways to peg salaries for university executives to public service mandarins in charge of agencies of comparable scale and complexity.

Mr Clare said he and state education ministers, who share legislative responsibility for university governance, would consider a report from the council in October.