Why Australia’s vice-chancellors need to cut their sky-high salaries

University of Sydney vice-chancellor Michael Spence is leaving to head University College London at half the salary. Picture: Jonathan Ng

During the next 12 months, leaders of Australia’s universities will be tested as never before, having to reshape their institutions to a new reality in which revenue is billions of dollars lower than last year.

It will require an abundance of vision, skill, toughness and sacrifice. Many expenditure items will need to be cut and it will be a difficult and damaging process. But there is one place to start that should be an easy choice: the salaries of vice-chancellors and their senior executive teams.

For years, Australian university chancellors and the governing bodies they chair have awarded salaries to our vice-chancellors that are up to twice those earned by comparable university leaders overseas. They are high figures. For example, the University of Sydney’s 2018 annual report states that its vice-chancellor, Michael Spence, was paid between $1.515m and $1.529m that year.

The only vice-chancellor I am aware of who has put up serious ­resistance to being overpaid is the Australian National University’s Brian Schmidt. When he was appointed vice-chancellor in 2016 he wouldn’t take the near $1m paid to his predecessor Ian Young and accepted a figure less than two-thirds of Young’s salary. This was all the more extraordinary because Schmidt is a genuine academic superstar. He won the Nobel Prize in Physics in 2011.

ANU vice-chancellor Brian Schmidt

For the past two years, the ANU annual report has included these telling words: “The package of remuneration received by the vice-chancellor is, at his insistence, benchmarked against the prac­tices of other comparable inter­national higher education in­stitutions rather than the major Australian universities, and is significantly more modest than the current Group of Eight norm.”

In 2018, Schmidt was paid between $670,000 and $684,000.

Would his peers ever make a similar sacrifice? In some circumstances, yes. Earlier this year, the University of Sydney’s Spence announced he was starting next year in a new prestigious job as president and provost (the equivalent of vice-chancellor) at University College London, an institution that is one of the top universities in Britain and well above Sydney in the academic pecking order.

He will be paid £365,000 ($713,800), UCL has announced. “This salary has been benchmarked and set against other world-leading UK universities, including Oxford, Cambridge and Imperial. Dr Spence has taken a pay cut so his salary is in line with these peer universities,” UCL said.

Now we know that one vice-chancellor is willing to work for less, it’s time to put the question to others. Certainly, some Australian university leaders have taken temporary 20 per cent pay cuts in response to the crisis. And Monash University’s Margaret Gardner, in a message to her staff last week, said that neither she nor the university’s senior executive would be exempt from measures affecting jobs if they are needed.

Vice-chancellors now face the very difficult task of making deep cuts to programs and slashing jobs while trying to preserve their institution’s core missions.

The best way to establish their authority and credibility as leaders in these challenging times is to make major sacrifices themselves.