The Million Dollar University

Something strange has happened to the Australian university. It still speaks the language of scholarship, public service, teaching and research. It still receives enormous public support and enjoys privileges justified by its educational mission. Yet at the top of the institution an executive remuneration culture has developed that increasingly resembles the upper reaches of corporate Australia.

The latest figures deserve attention precisely because this is no longer a story about one spectacularly well-paid vice-chancellor. An investigation by The Advertiser reports that 233 university executives across Australia were paid more in 2025 than the premier of the state in which they worked. At 24 universities, at least five executives exceeded the relevant premier's remuneration.

Think about what that means. We are not talking merely about 39 vice-chancellors running Australia's universities. Somewhere along the way an entire executive class has developed beneath them: deputy vice-chancellors, provosts, presidents, executive deans and other members of increasingly elaborate senior management structures.

The comparison with premiers is imperfect but illuminating. A state premier carries responsibility for hospitals, schools, police, prisons, roads, emergency services, public finances and a government employing tens or hundreds of thousands of people. The premier faces Parliament, elections, hostile media and ultimately the electorate. Yet hundreds of university executives are now remunerated above that benchmark.

This did not escape the attention of the federal Parliament. A Senate inquiry into university governance heard that, using 2023 figures, 306 university employees nationally were earning more than their respective state premier or territory chief minister. The committee reported that the overwhelming view among inquiry participants was that many Australian university executives were too generously remunerated, particularly when compared with ordinary university employees and international counterparts.

That last comparison matters. The standard defence of very high executive remuneration is the market. Universities are large and complicated organisations. They employ thousands of people, educate tens of thousands of students, administer substantial property portfolios, compete internationally for students and researchers, manage enormous research budgets and operate in an increasingly difficult regulatory environment.

Nobody seriously suggests that running one is equivalent to being headmaster of a large secondary school. Nor should vice-chancellors be poorly paid. A serious university needs serious leadership, and there is nothing inherently objectionable about paying substantially for scarce ability.

But "the market" can become a wonderfully circular explanation. University A discovers that University B is paying its vice-chancellor $900,000. University A therefore concludes that it must offer $950,000 to attract someone of comparable calibre. University C commissions remuneration consultants who discover that comparable institutions are paying around $1 million. Its council quite reasonably decides that it must remain competitive. University B subsequently discovers that the market has moved. Around the circle we go.

Nobody needs to be corrupt. Nobody needs to conspire. Nobody even needs to behave irrationally. Every council can make an individually defensible decision while the collective result becomes increasingly difficult to defend. This is the familiar ratchet effect of executive remuneration.

The same process can occur below the vice-chancellor. Once the person at the top receives seven figures, remuneration beneath that position adjusts accordingly. Senior deputies must be paid enough to reflect their proximity to the chief executive. Other executive salaries follow, and before long the remarkable statistic is not that a vice-chancellor earns more than a premier but that numerous people within the same institution do.

That is why treating this merely as a debate about greedy individuals misses the point. It is a governance problem.

South Australia actually attempted to confront it in 2025. Greens MLC Robert Simms introduced legislation that would have capped vice-chancellor salaries at Adelaide University and Flinders University at the remuneration received by the Premier of South Australia. The proposal failed to obtain sufficient parliamentary support.

The parliamentary debate is worth revisiting because the arguments against the bill were not frivolous. Liberal speakers argued that salaries should principally be determined through market negotiation. Government speakers argued that imposing a ceiling upon South Australian universities alone could put them at a competitive disadvantage when recruiting internationally.

That is the strongest objection to a state acting alone. Suppose South Australia capped a vice-chancellor at roughly $450,000 while comparable universities interstate remained free to offer twice that amount. An outstanding candidate considering Adelaide and Melbourne might understandably notice the difference. A state-only ceiling could therefore produce precisely the problem its opponents predicted.

But that argument changes considerably if remuneration standards operate nationally. Indeed, the federal Senate inquiry subsequently recommended something more sophisticated than simply declaring that no vice-chancellor may earn more than a premier. It proposed that the Commonwealth work with the Remuneration Tribunal and state and territory governments to establish classification structures and remuneration ranges for vice-chancellors and senior university executives. University councils would continue setting individual remuneration, but within the appropriate range.

That deserves serious consideration because it answers much of the competition argument. If broadly comparable rules applied nationally, Adelaide would not be trying to recruit against Sydney or Melbourne while voluntarily tying one hand behind its back. Australian public universities would be operating within a common remuneration framework.

There is already nothing revolutionary about government determining remuneration structures for important public offices. Judges do not hold private auctions between courts to see which jurisdiction will offer another $300,000. Senior public servants, statutory office-holders and politicians operate within legislatively established or independently determined remuneration arrangements.

The Commonwealth's own remuneration structures provide an instructive comparison. Publicly available government material shows remuneration around $1.036 million for the Secretary of the Department of Prime Minister and Cabinet, about $984,000 for the Chief of the Defence Force and about $847,000 for positions including the Auditor-General and Australian Statistician. Those are not trivial jobs.

If Australia can establish rational remuneration arrangements for people administering departments of state, commanding the Defence Force and auditing the Commonwealth, it is difficult to see why university executive remuneration must uniquely be left to an escalating internal market.

There is another reason universities deserve special scrutiny. They are not ordinary corporations. A private company making widgets can pay its chief executive $20 million if its shareholders wish. The money belongs to the company, and investors can sell their shares if they dislike how it is being spent.

Public universities occupy a fundamentally different position. Their campuses, legislation, public funding, research grants, student-loan arrangements and tax treatment all reflect their public function. Their justification for existence is not maximising distributions to shareholders. It is education, research and service to the community. That creates a legitimate public interest in how their resources are distributed. Every dollar has an opportunity cost.

Money spent on another layer of executive management cannot simultaneously employ tutors, fund laboratories, maintain libraries, support early-career researchers or reduce reliance upon casual teaching.

This does not prove that every executive salary is excessive. It does mean the question cannot be dismissed as private business. The problem becomes particularly visible when universities themselves plead financial necessity.

Students are told that resources are finite. Faculties restructure. Subjects disappear. Casual academics move from contract to contract. Researchers spend extraordinary amounts of time applying for grants that they may never receive. Against that background, seven-figure executive remuneration inevitably attracts scrutiny.

Adelaide University itself now illustrates both sides of the argument without any need to personalise the issue. Its published remuneration statement says its vice-chancellor receives a base salary of $860,000, plus $103,200 in superannuation, producing fixed remuneration of $963,200. Performance-related remuneration can take the maximum package to $1.1352 million. The university says the package was negotiated consistently with independent external remuneration advice and was commensurate with the skills and expertise required for the role and her experience. That is exactly the institutional question.

One need not make any allegation about the individual receiving the money. The issue is whether a public university should possess essentially unrestricted discretion to establish remuneration at that level simply because consultants and comparisons with other universities indicate that this is what the market pays.

Perhaps the more revealing question is how the market came to pay it. Benchmarking can validate almost anything if everybody benchmarks against everybody else.

There is a philosophical problem lurking beneath the accounting. Universities once possessed a fundamentally collegiate conception of themselves. A professor might become dean, a dean might become vice-chancellor, but the institution remained principally a community of scholars.

The modern language is different. There are strategies, brands, key performance indicators, transformation programs, executive leadership teams, stakeholder engagement plans and corporate communications departments. Students become customers while academics become human resources. Once the university imagines itself as a corporation, the person at the top naturally begins to look like a corporate chief executive. And corporate chief executives expect corporate remuneration.

The danger is that universities acquire the costs of corporations without acquiring their disciplines. A private chief executive ultimately confronts owners whose capital is at risk. A poorly performing listed company can lose investors, be taken over or disappear. A public university exists within a much more protected institutional environment while still borrowing the remuneration norms of the corporate world. That combination deserves scrutiny.

There are several possible regulatory models, and they need not involve politicians deciding individual salaries. One is the simple South Australian proposal: tie vice-chancellor remuneration to the premier's salary.

Another is to establish a multiple of a benchmark public-sector salary. The more flexible approach is the one contemplated by the Senate inquiry: national classification bands established with the involvement of the Remuneration Tribunal, allowing councils discretion within defined ranges.

The last model has an important advantage. It recognises that universities differ enormously in size and complexity without accepting that executive remuneration should have no external boundary at all. It could also reach beyond vice-chancellors.

That may now be essential. If hundreds of executives are earning more than premiers, restricting only the person occupying the top office risks leaving the underlying executive culture untouched.

Transparency should accompany whatever framework is adopted. Universities should disclose remuneration clearly enough that taxpayers, staff and students can understand not merely the salary of the vice-chancellor but how many senior executives occupy each remuneration band, what performance payments are available and what principles councils use when setting those amounts.

Federal public-sector reporting already demonstrates that remuneration bands and their components can be disclosed systematically. The argument against regulation remains respectable. Universities compete globally. Good leadership matters. Government salary controls can become inflexible, and politicians are not necessarily better judges of executive talent than university councils.

Those considerations argue for intelligently designed regulation rather than proving that no regulation is possible. The extraordinary number is no longer the million-dollar vice-chancellor. It is 233.

When hundreds of executives across a publicly supported university system earn more than the political leaders of their states, asking whether the remuneration market is functioning properly is hardly an attack upon higher education.

It is a question about what higher education has become. South Australia began that argument in Parliament in 2025 and did not adopt the proposed cap. Since then the national debate has moved substantially further, with a Senate inquiry itself proposing nationally coordinated remuneration ranges.

The question Parliament now faces is therefore larger than whether one particular vice-chancellor deserves one particular salary. It is whether Australian universities should continue setting executive remuneration primarily by reference to a market substantially created by other Australian universities doing exactly the same thing.

For institutions devoted to critical inquiry, that assumption deserves rather more critical inquiry of its own.

https://www.adelaidenow.com.au/education/higher-education/staggeringly-out-of-touch-233-university-executives-pocket-more-pay-than-state-premiers/news-story/2e76d31cd651c8cddf6e3adea8dc5c00