As COVID Looms, W&M the Latest to Cut Executive Compensation

W&M President Katherine Rowe

by James A. Bacon

We won’t know for another week or two, when kids show up on campus, what enrollments will be at Virginia’s colleges and universities. Due to massive uncertainties engendered by the COVID-19 epidemic, no one is sure how many students who committed to attend will appear when dormitories open in the next week or two. Higher-ed institutions across the state are bracing for the worst. Indeed, uncertainty is so acute that some college presidents and senior officers are proactively taking pay cuts.

College of William & Mary President Katherine Rowe and two senior colleagues, the university’s provost and chief operating officer, are the latest. Rowe, who earned $672,000 last year, is asking the Board of Visitors to reduce her compensation by 15% through the end of the year. The other two executives have voluntarily taken cuts of 12%.

University of Virginia President Jim Ryan and other school leaders have announced 10% salary cuts. Ryan racked up $1,189,000 in compensation last year. Virginia Commonwealth University has said that “employee furloughs may be necessary.” Among those furloughed would be President Michael Rao.

The problem facing parents is whether to fork out $25,000 or more in tuition, fees, room and board to send off their kids with the expectation that they will enjoy the full residential experience, even as many higher-ed institutions are imposing strict limitations on student activities and living conditions. At every institution, the possibility looms that colleges will send kids home to complete classes online.

Another trend adding to uncertainty is the new phenomenon of poaching. In the past, once a student had committed to attend a particular college, other institutions respected the finality of the decision. Today, desperate to fill out their enrollment, some colleges are trying to entice students with offers of discounted tuition.

Many financial questions loom: How many students will show up? What will the balance be between lucrative out-of-state students, who pay much higher tuition, and lower-yielding in-state students? How much price discounting is occurring?

The college presidents have the most up-to-date numbers. They may not be revealing them to the public, but, apparently, some are acting upon them.