Columbia president Lee Bollinger's $1,753,984-a-year compensation has been a topic here. A professor of economics at Ohio University, Richard Vedder, writes at the Manhattan Institute's "Minding the Campus" blog:
Some University presidents grumble that their football coach makes far more than they do. Yet those same college presidents have a prestigious job, often garner a couple hundred thousand dollars annually or so on the side in corporate director fees, and earn typically three times or so the income of the governor of the state that provides them their beneficence. And, unlike the football coach, it is seldom obvious when they have a bad year and, even if they did, they are seldom fired (unlike football coaches).
What to do? I wonder what university presidential compensation would be like in a world without public subsidies, Pell Grants, federal student loans, state university appropriations, massive federal research grants, etc. My guess is that it would be considerably less—university presidents are taking a small cut of the funds provided by well meaning third parties wanting to advance the educational mission of colleges. Whatever that compensation would be, however, it generally would be accepted as being roughly appropriate, since the general taxpayer would not have much skin in the game.
As long as governments do the equivalent of dropping money out of airplanes over university campuses, some people are going to grab some of that money to enhance their own material well being. University presidents are certainly no exception.
Professor Vedder notes that the president of Ohio State University, Gordon Gee, made $1.8 million last year, which is "double the next highest paid public university president," "three times the salary of his predecessor," and "about four times as much as the President of the United States" at a time when Ohio "is facing statewide massive budget cuts."
Corporations are implementing "say on pay" advisory votes on executive compensation in response to the Dodd-Frank financial reform law. I've yet to see a call for a similar vote by state taxpayers (in the case of public universities) or tuition-payers or alumni (in the case of private ones) on college presidents' pay.