If you want to keep him, pay him: the case for McRobbie

What would you do if you were a business owner and afraid of losing one of your most highly valued employees to another company?

You could sit them down and tell them how valuable they are to your company.
You could tell them that while you cannot do anything for them now, in the next six months you promise you will take care of them.

Or, you could do what most employers who value their employees and want them to stick around do: offer them a raise.

That is what IU did this summer when it extended a 12 percent salary increase to IU President Michael McRobbie.

In the business world, nothing says “I value your work” and “I want you to stick around” like a raise.

Say what you want about McRobbie. Love him or hate him ­­­­­— I’m not here to pass judgment on how effective or ineffective, good or bad he has been during his presidency.

I merely wish to express why corporations and universities pay their chief executives so much.

University presidents, like every other job in the world, have a value within the market. You can argue whether or not these salaries are justified; but nevertheless, the salaries are what they are.

If you want the best, you have to be willing to spend the money.Tom Crean makes $600,000 annually because that is what a top-tier basketball coach costs a university.

Fred Glass makes $410,000 annually because that is what it costs to bring a good athletic director to a Big Ten university.

And in July, the IU Board of Trustees agreed to pay McRobbie $533,120 annually because that is what the market said is a good wage for a Big Ten university president.

If you try to hire a good basketball coach, athletic director or university president below his or her market value, you are probably not going to find too many well-qualified or proven candidates willing to take the position.

When McRobbie was hired back in 2007 for $400,000, his salary represented the lowest in the Big Ten.

Trustees promised him that over time they would work to bring his salary in line with other university presidents in the conference.

His new salary increase does just that. This coming school year, McRobbie will be the sixth highest-paid president in the 12-member Big Ten conference.

But with this year’s 5.5 percent increase in tuition and fees for in-state students and the meager 1.5 percent raise university staff will receive, many say this is the wrong time for McRobbie to receive his raise.

If the students and staff are making sacrifices, why shouldn’t the university president, right?

I can sympathize with this argument. I think it would have been a great public relations move for McRobbie to come to the university community and publicly forgo a pay raise this coming year.

But with recruiters looking for presidents such as McRobbie to fill vacant positions at universities all across the country, the trustees had no other option if they wanted to ensure he would stay.

As the Indiana Daily Student previously reported, IU is an American Association of
Universities research university.

And of the 59 located in North America, 30 are going to be looking for new university presidents in the coming months.

The Herald-Times reported three to four universities had already approached McRobbie about leaving IU to work for their schools — one even offering a significant salary increase.

For universities looking to fill a vacant chief executive position, a university president like McRobbie, who is responsible for a $6 billion budget, is a great candidate.

You can argue that McRobbie should have forgone a raise this year, and you can argue that university presidents in general make too much money.

You can argue whatever you want, but you cannot argue the trustees made the wrong decision to keep McRobbie around.

McRobbie is a highly valued, highly sought after university president. Giving him a raise merely recognized his value.

­— nperrino@indiana.edu