The Market for Vice-Chancellors

Abstract

How homogenous is the market for top managerial talent? We analyse data from university annual reports on Vice Chancellors’ remuneration for the period 1995-2002 and test to see whether there is alignment between the market for Vice-Chancellors and the market for CEOs in Australia. While the responsiveness of pay to institution size is not dissimilar, Vice-Chancellors receive on average about 60 percent less than CEOs. In addition, we also compare the remuneration of Australian Vice-Chancellors to those in the United States and the United Kingdom and find that the Australians receive the highest real remuneration when using purchasing power parity exchange rates. The remuneration of Australian Vice-Chancellors is even more attractive once taxation and quality of life factors are taken into consideration. We also construct a demographic profile of Vice-Chancellors, showing that relative to CEOs, Vice-Chancellors are appointed later in life and do not have shorter tenures. Regarding Vice-Chancellor backgrounds, there is an over-representation of Vice-Chancellors from social and pure sciences and an under-representation of Vice-Chancellors from management and commerce relative to the number of award completions in those areas.