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Paul R. Portney

Paul R. Portney

Paul R. Portney is Dean of the Eller College of Management at the University of Arizona, where he also holds the Halle Chair in Leadership.

Who Bears the Burden?

It's easy to see why the top executives of cash-hemorrhaging companies, especially those being rescued by Uncle Sam, are under pressure regarding their compensation. After all, how can one justify $100 million in bonuses for 2008 to those who led AIG's Financial Products division, the geniuses who nearly bankrupted the company and have now run through $170 billion in bailout funds?

But how about those at the top of of the salary scale at universities, not-for-profit organizations and other places where the sad state of the economy is necessitating layoffs? Should they be taking voluntary pay cuts? Yes, but for a different reason than those in the private sector.

Few would argue that university presidents or highly paid football or basketball coaches, for instance, are responsible for the precarious position their institutions find themselves in today. It's due much more to battered endowments, declining state support and reduced funds from corporate and government research grants.

Whatever the reason, though, when universities have to cut spending, those who suffer the most aren't faculty members, deans, other top administrators and certainly not coaches; indeed, with the exception of the latter, these people often have the greatest kind of job security known to man: academic tenure. Rather, secretaries, administrative assistants and other relatively low-level personnel are generally the ones who bear the burden.

Being paid the most and having the most job security confers a special obligation to do more than one's part in tough times. For THAT reason, rather than because their behavior caused the problem (like some corporate executives), university presidents, hospital administrators and other leaders -- and maybe even highly paid coaches, too -- do right by taking voluntary pay cuts.

By coincidence, I announced to my colleagues last week that I'd donate 10 percent of my salary back to my college for this coming academic year. It'll be a tough year for us because of the sorry state of the Arizona economy; and I'm very fortunate to have the job I do. Ramping up my contribution is the least I can do to help us through a difficult time.

By Paul R. Portney

 |  March 15, 2009; 10:24 PM ET
Category:  Compensation Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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