Presidential Compensation and Institutional Revenues: Testing the Return on Investment for Public University Presidents

Many critics consider public institution presidents' compensation to be excessive, while others argue the money yields a return on investment in private fundraising and state appropriations. Our study asks whether presidential compensation at public, four-year institutions is associated with increased institutional revenue from state appropriations and private fundraising. Using executive salary data from The Chronicle of Higher Education,our study implements ordinary least squares regression with fixed effects and temporally adjusted outcome variables while controlling for institutional and state attributes. We find no evidence of a relationship between presidential compensation and revenue generation from increased fundraising or state appropriations.