Leading in turbulent times: The challenges, complexities and compensation of public university presidents 

In today’s dynamic environment, universities face unprecedented pressures that are reshaping the landscape of talent management and compensation. Public university presidents face an increasingly politicized and financially unstable landscape. Their time as president is shorter and more precarious, heavily influenced by government oversight, political polarization and institutional crises. Success requires navigating state and federal-level politics, managing frequent leadership transitions, responding to volatile campus climates, guiding a complex and rapidly evolving athletics business, and raising substantial funds from external resources. These are skills that extend far beyond just academic credentials, and demand resilience, agility and political acumen at every turn.

Public universities are large, complex organizations and the complexity grows every year.  The median operating budget of public AAU (Association of American Universities) institutions is approaching $3 billion, serving more than 45,000 students. 

Today’s students seek more flexible, technology-enabled and outcome-focused education. Presidents must lead efforts to modernize academic offerings, improve student success metrics and demonstrate institutional relevance, adding layers of complexity to their leadership responsibilities.

They need to do all this amidst declining state and federal funding, enrollment pressures, increased competition and economic uncertainties. The traditional funding model is upended and there is little doubt that it will continue to need to evolve with creative and innovative strategies. Many institutions are diversifying revenue – embracing online programs, continuing education and expanded alumni and industry partnerships.

Presidents must now serve not only as strategic visionaries, but have dynamic financial acumen, an ability to build relationships with business and donors, and political savvy not just locally, but nationally and even internationally. Crisis response, political diplomacy and high‑stakes legal strategy are now central to the presidency. They must balance multiple stakeholder expectations, manage public accountability and lead institutional transformation – all under heightened scrutiny.

The challenges above are reshaping what it takes to be a successful university president. The increased complexity and pressure have contributed to higher turnover rates among public university presidents. Approximately 65% of public AAU institutions have seen a president transition in the past 3 years, some more than one time. A wave of burnout is leaving many leaders prematurely exiting their roles and succession planning is sorely lacking. This churn underscores the importance of competitive, well-structured compensation packages that can attract and retain effective leaders.

Base salaries for public AAU universities are typically between $800,000 - $1,000,000.

While base salary is the primary element of total compensation, the pay packages for presidents are more than just base salary. There is a growing demand for performance-based rewards, including short-term and long-term incentives (LTIs). In addition, the need for institutions to accomplish strategic growth requires leadership continuity, and this has reinforced the focus on deferred compensation and other retention-based programs.

Many public universities are adopting incentive programs tied to strategic goals such as enrollment, fundraising, research and student success. Strategic goals are usually multi-year, and not accomplished in a linear fashion, making them ideal for a long-term incentive design. They can also lend themselves to cascading to the cabinet, whereby the push-pull of goals can ensure all leaders are “rowing in the same boat.” 

Whether goals are set annually or designed in an LTI, the establishment of goals, management of progress and award of performance-based pay requires additional effort from boards and leadership as well as the ability to reinforce that no payments are awarded when outcomes fall short of expectations.

Historically, performance-based incentives were frowned upon in higher education, especially at public institutions. Boards have come to realize that as stewards of their state’s limited resources, insisting on high performance and outcomes during challenging times may be a more fiscally responsible approach. Nearly half (40%) of public AAU institutions provide an annual bonus/incentive to the president, with a median opportunity level equal to ~30% of base salary.

Deferred compensation typically vests over several years, aiming to reduce turnover and encourage stability in top talent over the long term. 80% of public AAU institutions provide deferred compensation and/or retention awards to the president with a median award of equal to ~35% of salary. With turnover at public AAU universities at 65% over the past 3 years, retaining the right leaders is essential.  

Early renewal packages are another result of the turnover trend, perhaps even more so at smaller institutions seeking to retain their highly skilled leaders amid the turnover at the flagship publics. Few presidents are driven solely by compensation as higher education is not as highly paid as other industries and organizations of comparable size and complexity.  Most also hope to leave their institutions in a better place than when they arrived. Boards can demonstrate confidence in their president and the strategic direction they are moving by aligning the contract term to specific future outcomes.

The job of public university presidents in 2025 is one of unprecedented complexity: financial stewardship, ideological navigation, legal risk and institutional change now define the role. It demands a broader, more politically attuned skillset than ever before, making longevity in the position less likely and recruitment pipelines more stretched. 

The challenges and compensation considerations faced by presidents are shared across the broader executive team. Boards must recognize that data is just one piece of the puzzle; effective compensation packages must be aligned with the university’s overall strategic plan and compensation philosophy.

The right balance between base salary, performance incentives and deferred compensation depends upon where the university is today and where it wants to be in the future. Different pay elements are attractive to different types of leaders.

Ultimately, developing thoughtful, strategic compensation packages is critical to ensuring leadership stability, institutional success and the ability to meet the evolving demands of public higher education. Boards that prioritize alignment with strategic goals and market realities will be better positioned to attract and retain the visionary leaders needed to guide their institutions into the future.