Houston U’s million dollar paycheck as students struggle with tuition

This commentary, written by Tori Richards, appeared in Watchdog Texas on August 25, 2015.

The president of the bottom-ranked University of Houston is asking her working-class students to pay just a little more this fall, even as she continues to pull down a $1.2-million annual salary, to ride with a chauffeur and live in a mansion.

UH president and chancellor Renu Khator is the seventh-highest paid public university president, cashing paychecks that top her peers’ income at private Princeton and Harvard – the nation’s top two colleges. In fact, those presidents aren’t even in the top 25, salarywise.

But there’s a big difference between Houston and its Ivy League brethren: UH ranks No. 189 in the US News & World Report’s annual list of top colleges. The school’s ranking in Money Magazine (rated by post-grad success) is worse still: No. 473. And Forbes? UH didn’t make a similar list there.

UH is part of a four-school system, one of which is UH-Downtown, a school so bad that Money Magazine rates it one of the nation’s worst “dropout factories and diploma mills.”

The non-profit Education Trust think tank reported last year that Khator is the nation’s only university president making more than $1 million per year while her/his school has an overall graduation rate below the national average of 59 percent.

All that bad news and yet tuition is 20 percent above the national average.

Students at the University of Houston (UH) will pay an extra $433 in tuition and feesfor the 2015-16 academic year. That’ll be enough to keep UH’s ranking as the second-highest tuition in the state, at $10,331 per year. And 65 percent of UH’s students are middle or lower-class minority students who rely heavily on loans and government grants.

In an era where students struggle to make ends meet if they can afford an education at all, this is distressing news to many.

Commenting on the state of higher education in general, Tom Lindsay, education director at the think tank Texas Public Policy Foundation, said high administrative salaries play a substantial role in whether students can afford college. They have also helped create historic levels of student loan debt, now about $1.2 trillion.

“We are concerned by research showing that over the past 40 years the bulk of university budget increases have not gone to teaching and learning, but to administration,” Lindsay said. “The research also shows that senior administrators have done particularly well under the new regime. Nationally, from 1998 to 2003, deans and vice presidents saw their salaries increase as much as 50 percent. In 2007, the median salary paid for presidents of doctoral degree-granting institutions was $325,000.”

Khator was hired in 2008 to oversee UH and the other campuses. She had a salary in line with her peers until 2012, when the school paid $38,756 to an attorney who negotiated a 75 percent increase with the UH Board of Regents. Joseph Cotton, who specializes in obtaining multi-million-dollar chancellor salaries for his clients, is known for securing a salary so high for Suffolk University president David Sargent that it triggered an IRS audit.

For Khator, Cotton achieved a coup: a yearly salary including $700,000 base pay, $300,000 in bonuses and $200,000 in retirement – plus the chauffer and mansion – making her the seventh-highest paid public university president in the nation and the highest-paid to work at a relatively low-ranked university. She is 26th highest in a list of combined public and private university presidents.

All of this happened after Khator spent three years on the job without even a ranking byUS News & World Report.

A UH employee who requested anonymity has watched Khator’s salary skyrocket, wonders where it will end.

“I don’t understand this salary,” the employee said. “The only thing she’s really done is build a new stadium, but even that was largely the work of our recently departed athletic director and the successes of our former football coaches.”

The employee said Khator has presided over a “good PR campaign” to elicit the support of the regents to back her salary demands.

Khator refused to be interviewed for this article. But Tilman Fertitta, chairman of the UH System Board of Regents, said he was surprised by Watchdog’s questions seeking justification for Khator’s salary.

He said she was hired based on the “vision, leadership and determination the Board was seeking” and her raises have been “carefully analyzed…to ensure her salary is appropriate and consistent with the value she brings to the UH System and the University of Houston.”

Khator was initially paid $575,000 per year, which was raised to $625,000 and then $700,000 before Cotton became involved in 2012. In a report he submitted to the board, Cotton compared Khator’s salary to the pay of presidents at Pennsylvania State University, the University of Washington and the University of Michigan – all schools ranked in the top 50.

The majority of the schools in his report were ranked in the top 75.

State officials bemoaned the lack of a high ranking by any Texas school – including the flagship Austin – in numerous status reports from the Texas Higher Education Coordinating Board.

“U.S. News & World Report has never ranked the Texas public flagship institutions, The University of Texas at Austin and Texas A&M University, among the top 10 national public universities,” a 2014 report said.

The University of Texas at Austin is Texas’ highest-ranked public university at 53^rd  in US News & World Report and its tuition is $720 lower per year than Houston‘s. Austin president Gregory Fenves makes a base salary of $750,000 — $50,000 more per year than Khator‘s base. He was offered $1 million a year, but turned it down saying it was too high for a public university.

For Fertitta, Khator’s salary is based on “her stellar track record and the achievements she has helped the UH System and University of Houston obtain.”

Among those achievements is the fact that she oversees a multi-campus system with a $1.3-billion budget; the launch of a 75-acre Energy Research Park, a partnership with the Texas Medical Center, and designation by the Carnegie Foundation as a research university.

One thing he didn’t mention: Khator enlisted the services of Academy Award-winning actor Matthew McConaughey to speak at the 2015 commencement. The tab? $165,000.