Tudge backs plan to benchmark university boss salaries with public servants

Federal Education Minister Alan Tudge is backing a voluntary code that would benchmark the salaries of university vice-chancellors against top public servants in a bid to make their pay packets more transparent.

The code, unveiled by the University Chancellors Council on Friday, requires universities to clearly disclose the base salaries and bonuses paid to vice-chancellors and senior staff in annual reports and says remuneration should align with “society’s contemporary expectations and norms”.

Education Minister Alan Tudge has urged universities to adopt a voluntary code that would provide greater transparency over vice-chancellors’ salaries.Credit: Alex Ellinghausen

Mr Tudge said the code would promote public confidence that the salaries were appropriate amid ongoing controversy over the $1 million-plus salaries earned by many vice-chancellors.

“It’s always surprised me that some vice-chancellors were getting paid far more than the most senior public servants in the country,” Mr Tudge

As part of the code, the UCC – which comprises the chancellors of every public university across Australia – will commission data to compare the salaries earned by universities’ top brass with those earned by public sector leaders and the heads of ASX-companies with similar-sized turnover as universities. The code says remuneration should be “competitive, appropriate and transparent”.

Chancellors perform a governing role similar to a chairperson and lead the university’s council or senate.

Vice-chancellors’ salaries have been a long-running sore point within the government. University of Melbourne vice-chancellor Duncan Maskell took home a remuneration package of just over $1.5 million in 2020, while the vice-chancellors of Monash and RMIT universities also topped the $1 million mark last year.

University of Sydney chief Mark Scott will earn a base salary of $840,000 this year and could earn up to $1.15m with bonuses. His predecessor, Dr Michael Spence, finished his 12-year stint in 2020 on a salary of about $1.6 million. UNSW chief Ian Jacobs took home $1.3 million last year.

UCC convenor Stephen Gerlach, chancellor of Flinders University, said that while the code was not designed to dictate salary bands to universities, benchmarking against other sectors “might ameliorate the risings salaries that have been payable over the last few years.”

“This is not to say that the particular salary of a vice-chancellor should equate with one of the senior public servants. But as a guide, it indicates that it is not out of range,” Mr Gerlach said.

“When a university thinks the challenges faced by vice-chancellor is such that they need someone who is only available on a higher figure, that’s up to them. We’re not trying to dictate anything.”

Phil Gaetjens, secretary of Prime Minister and Cabinet, is the top-paid department head with an annual salary of $914,460.

Professor Andrew Norton, a higher education academic at the Australian National University, said he was sceptical that greater transparency alone would curtail high salaries.

“Past transparency on salaries has fuelled excessive pay as a political issue without obviously causing significant general changes to pay levels,” Professor Norton said.

He also pointed to the face that ANU vice-chancellor Brian Schmidt, who earned a base salary of $484,000 last year, had routinely earned far less than his counterparts without it driving down salaries across the board.

The university sector was still reviewing the code when approached for comment on Friday, but several institutions indicated their approval. UNSW, through a spokeswoman, said it intended to adopt the code. A Monash University spokeswoman said the university welcomed the code’s publication and would review the voluntary recommendations.

The University of Sydney said the code had been endorsed by the Senate’s People and Culture Committee and would be discussed at its next full Senate meeting in a couple of weeks. “It should be noted that the remuneration for our current vice-chancellor sits within the guidelines outlined in this new code,” the spokeswoman said.