College Mathematics Beliefs and Belonging Survey
Category: Student Well-Being
I examine how private universities and their presidents respond to the financial incentives arising from the 2017 Tax Cuts and Jobs Act (TCJA), which introduced a 21% excise tax on nonprofit executive compensation above a $1 million threshold. Using an event study design, I find that total presidential compensation decreased by 13%, a reduction driven by declines in non-taxable and other forms of compensation, and their probability of exit increased by 19%. Presidents adapted their behavior in response to this drop in compensation by prioritizing easily observable financial outcomes instead of student expenditure and success, increasing net incomes by 30\% and investment returns by 23\%, while the most taxed presidents decreased student net financial aid by 0.56\% per additional 1\% of their tax burden.
Keywords
college presidents, higher education leadership, executive compensation, leadership turnover, resource allocation, postsecondary governance, academic support services, governing boards, compensation policy
Education level
Document Object Identifier (DOI)
10.26300/b16a-5504
