Rao's money
University President Michael Rao will earn more than $350,000 this year, when bonuses are said and done.
It's tempting to claim absurdity, noting one peculiar fact: As departments claim to be strapped for cash, tuition increases rapidly and the CMU Promise is in jeopardy, Rao's earnings exceed the $300k mark.
If there's one thing that could be labeled university excess, some say, it is this figure.
However, this amount is not set solely on the basis of a calculation taking into account some abstract criterion for deservedness - it is a value, by and large, determined by the collegiate market.
Rao's base salary, his pay before bonuses and deferred compensation, is $293,550, an amount that objectively seems quite high. But relative to his Mid-American Conference peers, Rao is toward the bottom of the earnings chain. He is No. 12 among MAC presidents.
Certainly it is hard to pity Rao, to say he, as a meager No. 12 on a list of wealthy individuals, is somehow suffering horribly from CMU's budget situations.
But it is equally challenging to imagine that the Board of Trustees, which sets Rao's income, is not placed in a tough spot.
Other university presidents' earnings exceed Rao's, who has nearly eight years of tenure.
James Dunn, president of Western Michigan University, was hired only in July. Yet his base salary - $345,000 - already is more than Rao's.
Likewise, every other MAC university presents similar challenges. If CMU intends to keep Rao, his salary must be "competitive," trustees have said. For them, the challenge is devising a way in which the university can afford to keep him.
Hence, Rao has a base salary that, though by no means bad, is lower than the competition while not being exceedingly low as to tempt Rao to leave for another university.
The catch, however, is not in the base salary but rather in the retention incentives. These provide concrete bonuses that raise Rao's earnings to a level more toward the middle of the MAC president pack, but only under the condition that he sticks around long enough to earn it.
At this point, he has. His first bonus, $80,000, comes in March. The Board deserves credit for creating a mechanism that significantly supports tenure - a bonus system that, when considered alongside a relatively low base salary, pushes Rao's earnings more toward what could be considered competitive.
Perhaps presidential salaries, when considered independent from market pressures, are preposterous. But this would be irrelevant. The Board has no control over the market; it can only respond to it.
Yes, Rao's salary is cushy.
But the position of university president, as dictated by competition, mandates some sufficiently high level of cushiness, which Rao hardly exceeds.
