Is UK Vice-Chancellor pay justified by university performance

Reilly, Barry and Bachan, Raymond (2015) Is UK Vice-Chancellor pay justified by university performance. Fiscal Studies, 36 (1). pp. 51-73. ISSN 0143-5671

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The pay of university managers (vice chancellors, VCs) in the UK has risen sharply in recent years. This paper considers the extent to which VC pay awards are related to university performance measures based around institution mission and financial probity using an individual fixed effects strategy based on data covering academic years 1998–99 to 2008–09. In contrast to earlier studies on this theme, we find evidence that VCs are rewarded for observable mission-based performance measures. Specifically, our results suggest that success in widening participation for students from comprehensive schools and those from areas with low university participation exerts a positive effect on VCs’ pay. Securing income flows from university funding council grants also impacts positively on their remuneration. However, even after controlling for a rich array of observable and unobservable factors, there have been sizeable increases in real pay in recent years that cannot be readily explained.

Item Type: Article
Additional Information: JEL classification numbers: J45, M5, M12.
Keywords: vice chancellors, CEO pay–performance, public sector, higher education
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: H Social Sciences > H Social Sciences (General)
Depositing User: Barry Reilly
Date Deposited: 03 Aug 2015 14:24
Last Modified: 08 Mar 2017 07:21

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