Full Proposal

We propose a new method of benchmarking salaries at St. Mary’s College of Maryland that would complement the current practice of marking salaries to those at peer institutions. Our proposed St. Mary’s Wages would accomplish several goals:

  • bring our wage policies in line with our mission and the St. Mary’s Way
  • establish a living wage that adjusts for inflation
  • limit future spending by capping faculty and administrator pay
  • hold down tuition increases

Overview

The St. Mary’s Wages proposal seeks to align our salary structure with our mission. We propose establishing a benchmark minimum salary for the lowest paid full-time employees that would adjust with inflation. Other categories of employees would have pay ranges based on the benchmark. Faculty and administrator pay would be subject to caps also based on the benchmark. Adopting this St. Mary’s Wages proposal would guarantee a living wage to all college employees – one that wouldn’t erode with inflation over time. The caps on higher salaries would eliminate one of the drivers of costs, limiting future tuition increases and improving the college’s ability to implement its mission of inclusiveness. As the first higher education institution in the country to implement such a plan, the college would serve as a model for reining in runaway costs and protecting the public interest.

Background

The cost of a college degree has skyrocketed over the last decade and a half, and an SMCM education is no exception. The drivers of this trend are numerous and many are completely out of our control including, for example, healthcare and fuel costs. Other increases we have made by choice in order to fulfill our mission better: increased staff in International Education, 19 additional tenure-track faculty, and a salary for the lowest paid on campus that is higher than the local marketplace. However, the drastic increase in salaries paid to top administrators (both by increasing salaries for particular positions and elevating more positions to the VP-level) does not directly address our mission; instead, it reflects the unchecked exponential growth of executive salaries in higher education as institutions engage in an arms race for executive talent.

The results are stark. Since 2000, the total salaries of the President & VPs have risen from $600k (for 4 people) to $1.15M (for 5), an increase of $550k or 91%. Salaries for the individual executive positions have risen between 60% and 70%, far outstripping inflation (roughly 37%). In contrast, Associate and Full Professor salary trends show a decrease in buying power with averages increasing less than inflation at 29% and 22% respectively. Only average Assistant Professor pay has beaten inflation, rising 46% since 2000.

In contrast, the push for higher salaries for the lowest paid SMCM employees has been driven not by external forces, but by internal ones. Students occupied the president’s office, passed living wages resolutions via the Student Government Association, and held rallies in support of the cause. The faculty unanimously supported a living wage and suggested a level that would adjust with inflation (130% of the federal poverty level for a family of four – currently about $29k). All of these efforts were tied to the college’s mission, which describes the SMCM community as one “where people foster relationships based upon mutual respect.” Even with all of these efforts, the lowest full-time salary on campus has not kept up with executive salaries (even in percentage terms), increasing 56% since 2000.

The idea of using pay ratios to constrain pay is not new. Ben & Jerry’s ice cream originally maintained a 5:1 ratio between  the highest and lowest paid. Dr. Constantine Curris, a former president of three different institutions, argued for such a policy in a 2009 Chronicle article (subscription required).

Proposal

We propose to institute a benchmark salary for the lowest paid SMCM employees to be set at 130% of the poverty line for a family of four, currently $29,976. This would ensure that no SMCM family with one full-time wage earner would be eligible for SNAP (formerly called food stamps). Other salaries would be subject to minimum and maximum pay levels described in the following chart, based on multiples of the benchmark salary. Current salary ranges are given as well as proposed ranges. For example, the President’s salary would be free to adjust based on market forces anywhere between a minimum of $224,820 (7.5 times the benchmark) and a maximum of $299,760 (10 times the benchmark). If inflation raises the benchmark, those numbers would change so that even someone at the maximum salary would be eligible for raises. For faculty, other salary considerations (including merit pay, raises for 5 year reviews) would set pay levels in between the top and bottom caps. The staff union would retain the right to bargain on behalf of all union members.

Min. (multiplier) Min. ($) Current Min ($) Max.(multiplier) Max.($) CurrentMax ($)
Staff 1 29,976 24,500 * *
Asst. Prof. 2 59,952 56,100 * *
Assoc. Prof. 2.2 65,947 60,918 * *
Full Prof. 2.5 74,940 72,500 4 119,904 155,541
Assoc. and Asst. VPs 3 89,928 100,301 4 119,904 130,593
VPs 4 119,904 184,110 7 209,832 215,026
President 7.5 224,820 325,500 10 299,760 325,500

(Librarians are included in the faculty categories.)
* caps on these groups are historically unnecessary, but could be included

Based on the 2012-2013 salary list, implementing this plan, along with some measures to lessen the effects of salary compression, would cost the college roughly an additional $270k. If current executive and faculty salaries were “grandfathered” but frozen until inflation pushed the cap up to those salaries, and the salary cap  savings were only realized as turnover occurred in those positions, then the initial cost of the proposal would rise to roughly $380k. These costs would change if the benchmarks were adjusted. The details are shown in the following table.

St. Mary’s WagesCost Estimates Proposed Raises Proposed Cuts Net Change
Staff 184,376 $184,376
Asst. Prof. 69,123 $69,123
Assoc. Prof. 136,700 $136,700
Full Prof. 14,005 65,342 ($51,337)
AVPs 0 0 $0
VPs 0 11,914 ($11,914)
President 0 25,740 ($25,740)
Total $380,648 $113,685 $266,963

(Negative numbers are in parentheses.)

To eliminate the possibility of increased costs due to what some call administrative bloat, we propose to cap total pool of salaries of those above the Assistant VP level (including the Associate Dean of Academic Services and the Associate Dean of the Faculty) at 75 times the benchmark.

AdministrativeCap Proposed Cap (multiplier) Proposed Cap ($) Current Total Salaries
AVPs, VPs, Pres. 75 $2,248,200 $2,218,136

Finally, some institutions have increased presidential compensation with non-salary benefits. We propose to cap total compensation (including housing, vehicle and deferred compensation) at 11 times the benchmark.

Risks

The main risk involved in implementing the St. Mary’s Wage plan would be that recruiting and retaining administrators at capped wages would be more difficult. Capping professor salaries might reduce retention among the highest paid, especially if our peer institutions begin escalating full professors’ salaries. The Board of Trustees, however, would maintain the authority to set wages, making exceptions to this policy in extraordinary cases.

Benefits

By implementing the St. Mary’s Wage plan, we would highlight not only our core values of academic excellence and a strong feeling of community, but emphasize the commitment to accessibility contained in our charter. As a public institution, accountable to the state, instituting a cap on runaway executive pay should be lauded in Annapolis and elsewhere. Increasing wages for the lowest paid employees and capping one of the drivers of increase college costs both align with recent legislative pushes. Thus, SMCM would be protecting the public interest.

Implementing this pay plan would create enormous cohesion across the college community. Instead of seeing the budget as a zero-sum game where large raises for administrators mean less for everyone else, a more collaborative attitude would prevail. With higher wages for faculty, especially at the Assistant Professor level, we would be in a better position to recruit new talent.

If we continue to engage in an arms race with private institutions in terms of executive pay, our students will pay the price. As of last year, the 26 top earning presidents of bachelor’s degree granting institutions (including four of our peer- and aspirant-peers) all made over $575k.  Matching that salary would require raising tuition on all students by 1%, with all the proceeds going to one person. Matching VP salaries would require further tuition hikes. By permanently capping the growth of executive compensation, we would continue to improve the accessibility of the college to a wide range of students.

Implementing the St. Mary’s Wage plan Could have other benefits.  In our search for a new President some applicants might be dissuaded from applying because of the salary cap, but would self-select as professionals committed to an institution that would choose to live its values of creating a supportive community of mutual respect. The poorly-considered move to the Common Application with no SMCM-specific questions worked in exactly the opposite way. It attracted the applications of many additional students with no particular interest or attachment to the college, and who were never likely to attend. Our zeal to pay market and above-market salaries to executives has done the very same thing, attracting many of the wrong type of applicant.

Finally, we have the money in this year’s budget to implement this plan. The original enrollment shortfall of 150 students prompted the Budget Committee to find $3.5M in spending cuts. They recommended $2.2M in permanent cuts. Since then, the enrollment picture has brightened considerably; we now face a shortfall of just 80-90 students, for a budget hole of approximately $1.8M. Given the permanent cuts that are being implemented, this remaining $400k would exactly cover the cost of implementing the St. Mary’s Wages proposal.

Conclusion

Adopting the St. Mary’s Wage plan would be a pioneering move that reflects and benefits both our liberal arts tradition and our status as a state institution. The post-recession climate has focused on the careful stewardship of limited government resources, growing dissatisfaction with runaway executive pay, and increased focus on reining in tuition hikes. In this context, we would be a unique, cutting-edge institution that not only prepares the next generation of leaders, but is itself a leader within the realm of higher education.

Finally, implementing this plan would ensure that we practice the values our mission statement lays out. A more equitable salary structure would demonstrate respect for all of our community members, especially those who are most vulnerable. The St. Mary’s Wages plan would also demonstrate our commitment to social responsibility and civic mindedness. Finally, by limiting future salary increases and thereby keeping tuition affordable, we would enhance accessibility, affordability, and diversity in our student body.

13 thoughts on “Full Proposal

  1. I’m so proud to be part of an institution where people are pushing for a living wage and capped executive pay! Not only would this policy bring us closer to practicing the ideals we value, it will make St. Mary’s a beacon to other colleges and institutions seeking to establish equitable, sustainable compensation practices.

  2. If only this proposal had been in place before Maggie’s salary went from $200k to $355k! Every time she got a raise I was thinking “hey, those are my tuition dollars you’re taking!”

  3. It seems like this would both help keep tuition down, and ensure we pay staff members a dignified amount of money? Sounds like a win win to me.

  4. A poorly thought out plan that only continues to damage SMCM. It’s pathetic that THIS is the best the student body and faculty could come up with. Let’s be creative and not halfass a solution that only sets us up for failure. Be the creative, inspirational, working for the better world group of people you once were! Stop this complaining, wet nosed, crying of “its not fair!!!”. Spread the wrath, BS. Instead, question why things are the way they are. Why outsource a president? Grow one from within. Find some who loves St. Mary’s and not for the paycheck. Require pay for performance for the top executives. THINK about this a little harder!

    1. It is true that among all possible solutions this is a moderate one but it is also a significant one. As an alum I must place my faith in the current faculty, students, and staff to know what is possible given the situation on the ground. Hopefully we will see a truly democratic reorganization of the college some day, an inspired, participatory, mutually supportive community. In the meantime, an incremental improvement is still a real improvement.

    2. Completely agree – pay for performance has done wonders for us at Goldman. We get lots of pay even when we nearly crash the economy. Sounds perfect for a public liberal arts college!

    3. David clearly cares greatly about the future of the College, but I’m concerned that he’s misread the purpose of this proposal. This proposal isn’t about “spreading the wealth” or complaining about unfairness; it’s about creating a community where we respect each other enough to pay everyone a living wage and where we recruit talented executives who care more about the work of the College than about excessive salaries. Paying at or above market rates got us a President (and Admissions VP) who drove us into a ditch, then took his leave comforted by a generous golden parachute. We don’t want to see that happen again.

      If you think you have an idea that can advance our mission and actualize our St. Mary’s Way, we’d love to see it. Of if you just want to critique what we’ve proposed, then please be specific: how does this plan set us up for failure? How do you propose we could find someone who loves SMCM for reasons other than a paycheck? How do you propose we measure the “performance” of top executives? Would you support “pay for performance” for all employees? These are not empty questions; we need passionate people to help improve this place and we welcome such feedback.

    4. Well-worded though it may be, your comment is embarrassing.

      You failed to address

      (1) how this plan is “poorly thought out.” From the documentation provided it strikes me as quite the opposite.

      (2) in what ways the plan is “pathetic” or “halfass.” You offer no specific criticisms or alternatives, nor do you indicate what the proposal falls short of accomplishing or what else it should attempt to do.

      (3) exactly how you think this plan will fail.

      Moreover, it sounds as though you think the motives for this plan are emotional, misinformed, and/or naive. Having read through the proposal and discussed it with many of its authors and advocates, I can assure you this is not the case.

      This is a well crafted, well researched idea whose potential risks and benefits have been carefully considered; I suggest you actually read the full proposal, as it may improve your outlook.

      There is always room for disagreement, of course, and my sense is that the creators of this proposal welcome such discussions (hence the website, facebook presence, and interest in feedback), but lets keep these discussions focused and productive.

  5. This is a plan very much worth considering. There is an Achilles heel in the plan: “The Board of Trustees, however, would maintain the authority to set wages, making exceptions to this policy in extraordinary cases.” Granting this a priori ensures that extraordinary cases will become the norm when it is deemed convenient. As G. Paul suggested in the comment above, this would be a step towards “a truly democratic reorganization of the college,” and therefore should not be putting forth loop holes like the one noted. Aside from this one point, kudos to those who drafted the plan.

    1. I suspect that this plan would never pass the BOT without that language in it. It still may not pass the BOT… The faculty are likely to expend a great deal of political capital/good will with the BOT just to keep the BOT from unwisely altering sabbaticals and endangering the incredible scholarly work that drives and improves the teaching of so many of our faculty. While the faculty are fighting to preserve a process essential to the core educational mission of the College, students, alumni, and staff will need to keep up the push for St. Mary’s Wages.

  6. St. Mary’s College of Maryland’s mission statement says: “Our faculty and staff foster intellectual, social, and ethical development within a community dedicated to diversity and accessibility.” We need faculty and staff, as well as an administrative leadership who are willing to practice what we preach. As we search for a new president, we should make sure that s/he joins out of commitment to the ideals of excellence in public education, as well as equality and justice, and not for profit and personal gain.

  7. While the intention behind this proposal is difficult to argue with, it confounds a couple of issues. First, equating the problems with the Common Application with setting executive pay at market levels is a leap. It would be hard to definitively prove that the candidate pool for executives is qualitatively impacted by a market based pay. If anything it deepens the pool. The search pool is a product of an advertising effort that includes various different information sources. Once the pool is established the search committee comprised often with faculty, staff, and students filters the candidates to determine “fit” based on the search committee’s shared understanding of the role to be filled. Having an attractive salary might attract candidates that are not a good fit but the search committee is pretty effective at filtering them out. So the search committee will filter out those who are not aligned with the mission and the candidates who self-align to the mission are not going to be turned away by a market based salary.

    Second, affordability is a much larger fiscal challenge that the St. Mary’s Wages proposal can’t dent. It is probable that the amount of tuition relief that is needed to make attendance at St. Mary’s College more affordable is in the $2-3K/student range. The most equitable approach would be to lower tuition for all students and that would be in the $4-6 million dollar range if you applied this to the 1700 undergraduates. So, wrapping this proposal in the cloak of access and affordability is over selling the proposal. It could be a symbolic gesture but would not make a significant impact on the cost of attendance for most of the students.

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