Cost of Leadership: Brief Inquiry into Head of School Compensation

Conclusion as the Introduction:

Traditionally, an essay concludes with findings and ruminations, but for this blog I’m using a different approach as I’d like to frontload my comments before you dig into the information below.

When I started this blog, my assumptions of leadership, which I’ve written about in many blogs are:

1. School success is dependent upon quality and stable school leadership.
2. Building an educator-driven organization matters most for long-term success.
3. School leadership has become more complex since I left it in 2011 as markets are more competitive, legal and human resource issues are more demanding, the teacher shortage is straining every aspect of quality schooling, and social media, cultural, and political forces make for exhaustingly complex work.
4. School leadership is expensive and worth the investment.

Throughout the process of researching, writing, and revising this blog I developed a better understanding that:

1. There is and has been significant leadership turnover in Christian schools, and problematically too few leaders were promoted from within the organization to the head of school position.
2. GuideStar 990 information is quite helpful and creates many contextual questions the deeper into the information you go.
3. There does not seem to be commonality on how compensation packages are determined.
   • I did take a look at FY14 data in an attempt to find some consistency.
   • A few schools I researched were disqualified because of compensation packages that were more heavily weighted toward other benefits rather than salary or FY14 information was significantly different.
4. The head of school compensation trend line seems to work its way from $220,000 to $300,000.
   • The median compensation package was $242,000.
   • When I took out the three highest and lowest expense-schools the average compensation package was $250,000.
   • Schools in the Southeast were generally in the highest tier while schools in the Midwest were consistently in the bottom tier.
   • Personally, living in California, I thought compensation would be significantly higher because of wealth, success of schools, and cost of living, but other than one school this was not the case as CA school leaders were most likely to be in the middle tier.
   • This is FY15 data, so make the necessary predictions for the 2018-19 school year.

Leadership Matters:

In the past, I have written about the necessity, rarity, and cost of quality school leadership in Engagement Matters: Get a Leader. Likewise, education research continues to support the importance of organizational and instructional leadership from the very highest levels of a school on student success as this Education Next article from a few years ago found,

…highly effective principals raise the achievement of a typical student in their schools by between two and seven months of learning in a single school year; ineffective principals lower achievement by the same amount.

Not to belabor the point, but David Brooks’ recent op-ed, Good Leaders Make Good Schools highlights the research on the success of Chicago Public Schools:

We’ve spent a lot of time over the past few decades debating how to restructure schools. We’ve spent a lot of time trying to help teachers. But structural change and increasing teacher quality don’t get you very far without a strong principal.

Collective Leadership Matters More:

Similarly, in many of my prior blogs I have expressed a necessity for schools to become educator-driven with innovative teacher-leadership teams. Similarly to my redesign work with schools, recent research in Independent Magazine entitled Understanding Distributed Leadership provides more insight into the impact of high capacity leadership teams in schools.

Likewise, you will continue to see me reference Jon Eckert’s Collective Leadership research in his book Leading Together where he provides a more significant understanding of the nature and complexity of this “work”. He discusses a few of these details with me in a podcast series about Collective Leadership including a conversation on Strategic Compensation. Like I stated above, leadership matters, but building an educator-driven school matters even more.

The Cost of Leadership in Independent Schools:

What started this inquiry was Robert Kennedy’s article Headmasters’ Compensation that lays out a methodology of using 990 data to gain an understanding of compensation trends for school heads at independent schools; therefore, I decided to take a look at Christian school compensation. Kennedy’s article provides a framework for this exercise as I think he correctly connects the unique expertise, skill, and energy it takes to be a private school leader (which also applies just as equally to public school leaders too). Kennedy states:

At private schools, these high powered individuals have to run not only a school, but also a business. Many people don’t like to think of schools as businesses, but the truth is, they are. A Head of School will actually oversee a multi-million dollar business, some schools are billion dollar businesses when you consider endowments and operating budgets, and they are responsible for the well-being of hundreds of children every day. Boarding schools add another level of responsibility when it comes to leadership and oversight of children, as they are essentially open 24/7. The head is involved in not only the aspects of academics and ensuring students receive quality educations, but also hiring and HR, fundraising, marketing, budgeting, investing, crisis management, recruiting, and enrollment. The person who sits in this role must be a part of every aspect of the school.

When you consider the enormous expectations made of these dedicated individuals, most head of schools’ compensation is far below comparable levels in other fields.

Christian School Leadership Data:

To gather my own data on Christian school compensation, I started with a list of fifty schools and settled on twenty-two schools from fifteen states based upon:

• Availability of GuideStar 990 information for FY15,
• Schools that are non-church affiliated, are or have a high school, national reputation, and have displayed leadership stability (at least through 2015),
• These schools have an external reputation within our professional community for institutional quality and instructional success,
• Lastly, these schools and their leaders display a public ambitiousness for excellence within our profession.

Some information as you read the scatterplot:

• I created Total Compensation for each of the highest paid employees (all heads of school) as reported ‘salary’ plus ‘other’ benefits.
  • Other benefits often include tuition, retirement bonuses, and housing, and are unique to each compensation package.
• • I did exclude a few schools because the other benefits skewed total compensation packages, such as the most extreme was a school that paid a retirement bonus of $1.5 million.
• I based the x-axis on Line 18 Expenses in the 990 rather than student population, tuition, or other measures for multiple reasons; however, I’m open in the future to more comparison points.

How to Use this Data:

My intent in sharing this information is a desire to begin a more productive conversation about characteristics of successful leadership and to better develop teacher-leadership teams and opportunities within schools. A few ways to use this information might include:

School Boards:

• Reflect upon your mission, values, and organizational goals.
• Analyze your budget to discern your commitment to building leadership capacity.
• Benchmark and understand the cost for high quality leaders within your marketplace.

Current Heads of Schools:

• Reflect upon your role as a leader and how your compensation is reflective of personal values.
• Analyze your compensation in comparison to your leadership team and faculty.
• Promote the quality and appropriate compensation of all educators by encouraging more analysis on the correlation between your leadership and school outcomes.
• Counteract the educator shortage by bringing about greater quality, equity, and stability within your school and our profession.

Future Heads of Schools:

• Educate yourself to the schools that you pursue. Don’t be naïve to where you fit into this marketplace as school boards and especially search firms have no real understanding of fair and appropriate compensation for high quality educators.
• Reflect upon your personal values and professional goals to make sure they match with those of the school you pursue.
• Deepen your preparation in order to maximize budget flexibility to build a dynamic leadership team, and improve educator compensation.

I look forward to future conversations and what you are wondering. Some questions I am asking for future discovery are:

1. What does a three year compensation package average to be using FY14, 15, and 16 data?
2. How do I know if these schools are effective in improving student outcomes?
3. What percentage of the budget is committed to educational leadership and teaching faculty in comparison to organizational leadership?