This New York Times story claims that a recent Chronicle survey revealed, for the first time, that there were five presidents of private universities making over one million a year (Lynn University, Wilmington College, Vanderbilt, Boston Univ, and Middlebury College). The upward spiral continues: "Overall, the survey said, nine presidents of private universities earned more than $900,000 each, compared with none the year before, and 50 presidents of private universities earned at least $500,000 each, a 19 percent increase over the previous year." I am not going to get into whether or not such salaries are merited, whether boards of trustees have a correct understanding of what a college president should be, etc. All that would be too easy. Apparently, there is an imbalance in the supply and demand in the marketplace. Institutions are trying to find presidents who already have been, and the supply is dwindling. I do like one fellow’s comments: "We’ve created a cadre of hired guns whose economic interests are totally divorced from students and faculty."
This occurs in all sectors of economy all the time (public and private). Committees don’t have the time or inclination to truly manage, so they jump on the "credentialed" bandwagon and hire based solely on resume. Not only does this drive up the $salary$ of those with the most complete résumé’s, but it also divorces the job from the more subtle performance measurements, like is the person wrecking the culture of the institution (something a distant committee would never have accurate information about).
Will the academy abandon its presumption of moral superiority over the private sector based on their own dramatic income disparity between adjuncts and college presidents? Dream on...