Purdue signature

From the Jan. 9 issue of The Wall Street Journal

A Reform Boilermaker

Mitch Daniels makes his own pay at Purdue University subject
to performance.

Being a college president is one of the easier jobs in America, at least as long as all you aspire to do is give speeches, gladhand donors and put up some new buildings. So a round of applause for Mitch Daniels, the incoming Purdue University president who seems to have more reform ambition.

The departing Indiana Governor is headed to West Lafayette later this month, and he insisted on an unusual and innovative compensation package that could be a model amid the larger U.S. debate about value in higher education. Mr. Daniels is taking a substantial salary cut and linking his pay to his performance. Imagine that.

Under the terms of the contract, Mr. Daniels will earn base pay of $420,000. That's near the $421,000 average for presidents of public universities, according to a Chronicle of Higher Education analysis, and down from the $555,000 earned by Purdue's previous president. Mr. Daniels could then make up to 30 percent in bonuses tied to hard outcome metrics like graduation rates, student affordability, faculty hiring and achievement, and philanthropic support. Even if Mr. Daniels met 100 percent of his targets, he'd still rank 10th in compensation among the Big Ten presidents.

Performance pay is typical in the private economy but not in the generally accountability-free world of academia. Mr. Daniels's example is a sign that he sees himself as a steward of the dollars of state taxpayers—and it is also an implicit rebuke to the growing class of professional academic administrators who nominally run the joints.

As tuition and student loan debt continue to rise, families and even a few faculty members are starting to question how many costly assistant vice provosts for inclusion, associate sustainability deans, and the like colleges and universities really need, or they can afford. Nationwide, the number of bureaucrats has increased 10 times faster over the last decade than people hired to do actual teaching and research, U.S. Department of Education data show.

Purdue became one epicenter for this new scrutiny after a $67.4 million budget deficit in 2010 forced cutbacks. J. Paul Robinson, a cytomics professor and chairman of the faculty senate, calculates that over the last 11 years the number of Purdue administrators has jumped by 62 percent while professors increased by merely 8 percent. If his contract is any indication, Mr. Daniels will expect more, and measurable results, from the paper pushers.

Mr. Daniels's frugal bona fides and lack of pretense as Governor will be useful tools if he does plan on disrupting the higher-ed status quo, though as a Republican who didn't climb the greasy academic pole his job will be doubly difficult. Faculty and political hostility is likely to be extreme, but he is off to the right start by setting an example with his own pay. Purdue will be fun to watch.

-- A version of this article appeared Jan. 9 on page A12 in the Opinion section of The Wall Street Journal with the headline "A Reform Boilermaker."