Inquiry find ‘above-inflation’ increases for VCs at SA universities, massive salary gap between UJ and Univen  

An inquiry into the remuneration of South African university executives uncovered significant pay disparities, questionable financial practices, and a lack of accountability.

In January 2020, Blade Nzimande, then minister of Higher Education, Science and Innovation, requested the Council on Higher Education (CHE) to undertake an inquiry into the salaries of university vice-chancellors (VCs) and senior executive managers in South Africa.

Dr Nita Lawton-Misra, a member of the CHE who was part of the task team involved in the investigation, presented an overview of the final report.

Lawton-Misra presented these findings on Thursday before the Portfolio Committee on Higher Education and Training in Parliament.

Executive compensation disparities

Misra said the investigation revealed substantial differences in executive compensation across universities.

According to Lawton-Misra, in 2019, the highest-paid vice-chancellor was at the University of Johannesburg (UJ).

The UJ VC earned R7.1 million, while the lowest-paid VC at the University of Venda received R3 million.

In the same year, the university vice chancellor’s average total cost to company was just over R4 million the median being 3.9 mil.

Additionally, in 2019, VC’s average basic salary was R2.9 million with a median of R2.7 million.

“The university vice chancellor with the highest basic salary was at Stellenbosch University with a salary of R4.1 million and the vice chancellor with the lowest basic salary was at Vaal University of Technology with a salary of R1.9 million,” Lawton-Misra added.

When compared to inflation, this represented a real annual increase of 2.41 percentage points on average.

The investigation also found that “VCs receive on average 1.4 times more than executives and 12.3 times more than the general workers.”

Lawton-Misra revealed that university vice-chancellors are generally paid better than the CEOs of most science councils.

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Performance and pay disconnect

The inquiry found no clear connection between executive pay and institutional performance.

Lawton-Misra stated, “The inquiry found no clear links between the basic salaries and performance bonuses paid to VCs and the management of university enrollment planning, no clear and definitive correlations between a VC’s basic salary and the financial management and health of the institution, and no strong or statistically significant correlations between a VC’s total cost to company or basic salary and the knowledge productivity.”

The investigation identified several instances of financial irregularities and lack of transparency:

Lawton-Misra said UJ made large payments for “performance bonuses, deferred compensation and other incentives and benefits” to a former Vice-Chancellor over several years, without proper records or accounting.

Meanwhile, the University of Limpopo paid its Vice-Chancellor R3.7 million in 2017 “to rectify lost benefits because he had apparently not utilised certain perquisites,” followed by an additional R1.5 million in leave encashment in 2018.

She said the University of Pretoria did not fully disclose “millions of rand paid to its executive managers in retention agreements,” including large payments to retain a vice-chancellor who subsequently left but was allowed to keep the retention payments.

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CHE system reform recommendations

Lawton-Misra concluded that “Vice-chancellors and senior executives’ generous remuneration packages and spiralling above-inflation increases have been facilitated by weak institutional governance and accounting practices.”

She noted that “the university sector’s efforts at self-regulation over the last 15 years have been limited and inconsequential.”

The inquiry’s recommendations called for enhanced oversight, improved governance, and stronger policy frameworks.

“The lack of regulation both internal and external regarding executive remuneration threatens to undermine institutional autonomy,” Lawton-Misra explained.

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