Back to top

CAUT Bulletin Archives

November 2015

Post-secondary education sector pays out millions in golden handshakes

University and college officials say they are pinching pennies on everything from hiring to the use of copying machines because they’re strapped for cash.

Yet these same senior administrators, while preaching fiscal restraint, are benefiting from large pay raises and retirement’s golden parachutes.

The biggest case over the past year involved a double-dipping scandal at Western University. President Amit Chakma cashed in nearly $1 million in salary and benefits because he was paid twice in 2014: once for his job and a second time for an unused leave that formed part of a compensation package he negotiated as university president. He has since agreed to return half of it to Western and not take another double payment at the end of his second term.

“A rash of recent controversies has brought the issue of inflated administrative salaries and perks into the public spotlight,” said CAUT executive director David Robinson. “Million dollar payouts have unfortunately become the norm because universities and colleges are run more and more like the private sector that allows behind-closed-doors negotiating for exe­cutive compensation.”

Ann Dowsett Johnston, a former McGill University vice-president, left her position after 19 months in 2007 with a $760,000 compensation and severance package. McGill principal Heather Monroe-Blum defended the payout saying critics didn’t acknowledge the competitive environment the package was negotiated under. The details surrounding Johnston’s departure were protected by the university’s confidentiality clause and were never made public.

Ironically, Munroe-Blum stepped down in 2013, after serving two five-year terms at McGill, and cashed in her entitlement to a year’s salary while at the same time working as a visiting professor at Stanford University in California. A year later she opted for early retirement instead of returning to McGill to teach as expected, and pocketed another year of salary at her principal’s wage.

In 2011, Concordia University was embroiled in scandal when president Judith Woodsworth exited barely halfway through her term, allegedly forced out by the board of governors. Her $703,500 severance package was roundly criticized by the Concordia University Faculty Association, and the board’s refusal to discuss the circumstances of her departure sparked a series of votes of non-confidence in the university leadership.

The severance for Woodsworth followed hard on the heels of the more than $1 million payout taken by her predecessor Claude Lajeu­nesse, who abruptly resigned from the university two years into a five-year contract.

More recently, former Dalhousie University president Tom Traves was listed as the institution’s highest earner in 2014 — with a salary of $457,521 — despite having retired from the job in 2013. Under his contract, he gets an extra year of salary for every five years he worked. Nova Scotia’s minister of labour and advanced education Kelly Regan said although nothing could be done about university contracts already signed, she’s asked the province’s universities to stop dishing out deals that compensate their presidents after they stop working.

A recent review of the university’s financial position and budgeting practices by Dalhousie Faculty Association shows that while executive pay has ballooned, the share of total operating funds dedicated to academic or academic support units has declined steadily over a 10-year period.

“Dalhousie needs to refocus its attention on its core mission — teaching and research,” said faculty association president David Mensink. “If Dalhousie allocated as large a percentage of its operating budget on teaching and research now as it did in 2002–2003, it would have an additional $56 million this year alone for hiring tenure-track faculty and supporting academic activities.”

In 2012, the Association of Nova Scotia University Teachers released a report on compensation for senior administrators. Titled “A Culture of Entitlement,” the report identified an increase of approximately 25 per cent in the province’s university president salaries between 2004 and 2011, and a 35 per cent increase in total compensation for senior administrators below the rank of president.The report attributes this increase partly to “administrative creep” — the gradual increase in mid-to-high level administrative posts.

The report recommends several changes to compensation policy, including a stronger role for academic staff and students within boards of governors, including during money talks, and the development of clearer reporting mechanisms to the academic community and the public.

In some Canadian jurisdictions universities and colleges are not required to divulge terms of compensation for their top administrators. In New Brunswick, the province’s faculty associations have launched legal action against St. Thomas University in an effort to obtain the amounts of three employee severance packages.

The St. Thomas administration says the dispute has more to do with respecting contractual obligations and people’s privacy than about severance pay figures.

“The lack of transparency at St. Thomas is not an isolated case,” Robinson notes. “It’s illustrative of deeper problems in the academy. At a time when students are being asked to pay more, when academic staff are being told to accept less, the excessive increases in admin­istrative compensation are a slap in the face.”