The Transformation of University Presidents into to Corporate CEOs, trend towards CEO-ization

The Transformation of University Presidents into to Corporate CEOs

Analyses of new higher education presidential contracts show a trend towards CEO-ization.

A study conducted in 2017 analyzed the increasing complexity of employment agreements for university presidents.  The findings revealed that presidential employment agreements now showed few similarities to the typical appointment letters for faculty members, department chairs, or even other senior members of the administration.  These new, complex changes illustrated what the study authors termed the “CEO-ization” of the university presidency.  Here is a breakdown of some of the contractual elements that show a trend towards CEO-ization.


A majority of examined contracts included provisions for multi-year appointments.  The term for initial appointments varied from three to five years with renewal contracts hovering around five years.


Every contract examined included a base study.  Many of the contracts also included deferred-compensation plans.  The depth and wording of these plans varied in complexity with the most detailed including references to IRS regulations, eligibility standards, investment accruals, and more.


The study authors recognized that the type and value of incentive pay included in presidential contracts had increased significantly since 2010.  Examples of incentives included signing bonuses, performance bonuses, retention bonuses, and completion bonuses.  The total value of total incentives varied from a few thousand dollars to over $1 million.


In addition to the standard benefits offered to other university staff, presidents were eligible to for additional benefits such as additional life insurance, disability insurance, and health benefits.  Oftentimes, the language included in the document ensured that the presidents were not susceptible to additional tax liability for their increased benefits.


Presidents routinely received housing and car allowances.  Additionally, some were offered perks for first-class and business-class travel, access to chartered planes, access to financial or tax advisors, legal services, tuition assistance for family members, mortgage assistance, social and country club memberships, and telecommunications allowances for equipment and monthly fees.

Outside Activities

Many agreements included guidelines for compensation from speaking fees, royalties, and renumeration for serving as a corporate director.


Many agreements addressed annual and renewal evaluations.  However, the language was generally very vague.


The terminations clauses in the agreements were usually the most specific and carefully worded sections.  In virtually all instances of termination, the president was entitled to some kind of payout.  Deferred compensation, incentives, benefits, and perks often depended on the timing and consequences of the termination.

These are some of the complex characteristics of presidential employment agreements that show a trend towards CEO-ization of the position.  Looking for a consulting firm with experience working in higher education?  Then don’t hesitate to contact the professionals at McKnight Associates, Inc.  We are ready to offer you hands-on human resources consulting for colleges, universities, medical centers, and organizations of all sizes.