A year ago, more than three dozen higher education institutions had interim presidents at the helm, according to an October 2024 article in The Wall Street Journal (subscription required). This trend reflects a broader pattern of executive turnover observed across the United States, prompting significant changes in how universities and colleges manage their leadership structures.
Emerging from the pandemic, the higher education sector experienced significant turnover in critical executive roles from academic years 2022 to 2024, based on WTW’s Select University Executive Compensation Survey, which monitors more than 30 large, private R1 institutions (Table 1).
| Permanent and/or interim/acting | |
|---|---|
| One incumbent | Darmouth University Massachusetts Institute of Technology (MIT) Northwestern University Yale University |
| Two incumbents | Cornell University Harvard University Stanford University University of Pennsylvania |
| Three incumbents | Columbia University |
Among the key findings of the survey:
The volatility in leadership is attributable to several macro issues, including financial challenges within higher education, the changing landscape of diversity, equity and inclusion (DEI) initiatives, campus unrest and the aftermath of the recent political administration changes.
Presidential turnover in higher education institutions has downstream implications on other executive leadership turnover as new leaders may bring a change in strategic direction and correspondingly, personnel.
We observe that interim appointments, particularly for presidential roles, are becoming a common strategy for institutions aiming to weather the current economic and geopolitical climate. These interim leaders often have strong connections to the university (e.g., alumni, trustees, former/retired leaders or faculty members) who can provide stability in turbulent times.
Select leaders from academic medical centers have also been appointed into interim university president roles, likely reflecting a need for leaders with strong connections to the overall institution and its key stakeholders, faculty and community. Notably, institutions like Columbia University, Cornell University, Emory University and others have appointed interim presidents to navigate these challenges.
Interestingly, unlike traditional practices when interim roles were stepping stones to permanent appointments, the current trend leans toward appointing interim leaders primarily for stability, not necessarily as long-term candidates. While it is yet to be seen how long many of these interim leaders will stay, the recent trend appears to be that longer interim periods (one year or more) are becoming the norm.
Financial pressures have led many universities to consolidate executive functions, with leaders wearing multiple hats. This often involves combining roles to reduce costs. For instance, when a general counsel exits, legal responsibilities might be absorbed by the top finance and administration officer, exemplifying how institutions are restructuring management layers to adapt to financial constraints.
Additionally, higher education institutions are reluctant to add to middle management. For example, rather than hire a recently vacated role of vice president of finance, institutions are using a manager-level finance role to run the function and report directly to the top finance and administration role, thereby eliminating the vice president role entirely.
This trend is becoming more pronounced in institutions with academic medical centers, reflecting broader efforts to streamline operations and governance across the academic and health system entities. We also see a growing trend of senior leaders with responsibilities for both the academic and healthcare enterprises and expect this trend to continue in the near future.
Given the evolving nature of these roles, we recommend that higher education institutions carefully design compensation packages that align with the unique characteristics and expectations of interim and hybrid positions. Following are key considerations.
Compensation should account for whether an interim president is a potential candidate for a permanent role, as that will affect the mix and level of base salary, incentives and benefits.
For example, an interim who is a potential candidate for a permanent appointment may be positioned lower relative to the presidential market. This decision allows for evaluation of performance during the interim period as well as a more significant compensation opportunity and increase upon a permanent appointment.
Incentive opportunities or variable compensation also may not be made available or be modest in nature during the interim period because of the difficulty in appropriate goal setting and performance evaluation in a narrower timeframe and interim period. WTW’s guidance is often that any performance-based component of the interim package be discretionary and determined at the end of the academic year or interim post.
Compensation should be differentiated for interim leaders who are expected to remain in place for longer than one year. These longer-term interim appointments may require more structured compensation packages including variable, incentive and/or retention-based compensation elements.
Compensation should reflect the scope and duration of additional duties. Temporary role expansions may be compensated with stipends, whereas permanent consolidations might require a re-evaluation of base salary and variable or performance-based incentives.
Temporary stipends often are used for role expansion to help close the gap between existing pay for the current role vs. market pay for the temporary role. A stipend allows for flexibility and easier future removal if the executive moves back to their current role after a temporary appointment.
Permanent hybrid roles typically require thoughtful consideration as it relates to external market benchmarking to ensure all duties are captured. Often when evaluating these hybrid roles for market remuneration competitiveness, organizations will employ the use of “premiums” (i.e., 5% to 20%) applied to primary market benchmark compensation data aimed at capturing responsibilities above and beyond the typical market role.
It also is worth noting that executive roles that span both university and academic health systems may necessitate shifts in compensation structures, as the latter typically provides more pay through incentive compensation rather than fixed compensation. This requires a nuanced approach that considers the impact and contributions of these dual-entity leaders.
As universities and colleges face continued financial and operational pressures, the trend of relying on interim leadership and consolidation of executive roles is likely to persist. Institutions must remain agile, using compensation design as a strategic tool to execute the talent strategy necessary to navigate the uncertainties of higher education's evolving landscape.
