Australian university executives relinquish pay as coronavirus bites

La Trobe leaders take temporary salary cut as losses mount, and urge other executives to follow suit

April 2, 2020
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Senior executives at Melbourne’s La Trobe University have opted to take a pay cut, as the institution confronts the loss of at least one-seventh of its revenue.

The university has announced that members of its 12-strong senior executive group will forfeit 20 per cent of their income from late April until at least early July, with the arrangement to be reviewed in late June.

Half the money will go to the La Trobe Student Crisis Appeal, to be distributed to students in need. The other half will be directed to the university’s coffers, with this year’s budgeted revenue of A$850 million (£413 million) currently expected to fall short by between A$120 million and A$150 million.

The university said that other senior executives would also be asked to voluntarily cede 20 per cent of their salaries “in the interest of minimising the economic impact of the crisis”.

Vice-chancellor John Dewar said that a “short-term financial sacrifice” would support the university’s long-term sustainability. “The profound impact of Covid-19 on the higher education sector…requires extraordinary measures.

“While the impacts at La Trobe may not be as severe as some other Australian universities, we will soon be facing a simple choice: ‘share the pain’ across the organisation’s staff or implement a significant cost-cutting exercise.”

The move comes four weeks after Professor Dewar told staff that the institution would need to cut spending by at least 10 per cent in the face of coronavirus-induced revenue declines, reduced university applications from Victorian school students and a 30 per cent plunge in enrolments from India.

At the time, Professor Dewar announced cutbacks on recruitment, travel, promotions, bonuses and discretionary spending and acknowledged that “further consideration” may be required.

Professor Dewar was Australia’s 20th best paid vice-chancellor in 2018, the most recent year for which figures are available, with earnings of about A$975,000. Collectively, La Trobe’s senior executive group pocketed slightly over A$5 million.

On those figures, the salary cut would net at least A$200,000 or so, with half retained by the university’s budget and the other half allocated to the emergency fund for students. This will be on top of A$50,000 that the leadership team members have already donated to the fund, the university said.

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