Compensation for School Superintendents Needs Greater Transparency, Accountability

Missouri students will soon be returning to school, and although most school employees are still enjoying their summer breaks, superintendents are already hard at work preparing their districts for the annual back-to-school onslaught. Superintendents are the most highly compensated employees in education, earning an average salary of $106,368 in Missouri during 2009, according to the Department of Elementary and Secondary Education (DESE).

However, salary statistics considerably understate total superintendent compensation, leaving out benefits such as insurance, car allowances, and annuities. Furthermore, according to a new study by Audrey Spalding, public information specialist at the Show-Me Institute, although superintendent pay is correlated with many school district characteristics — total student enrollment, whether a district is urban or rural, percentage of residents with a college degree, etc. — compensation does not appear to depend on measures of either superintendent performance or student achievement. Given the amount of money paid to superintendents, it behooves Missourians to take a closer look at how superintendent compensation is determined and the benefits that the public receives for that cost.

Using superintendent contracts collected from nearly 90 percent of Missouri’s 521 public school districts (all the collected contracts are available at the Show-Me Institute’s website), Spalding shows that a quarter of all superintendents receive automatic raises built into their contracts. Other school districts look to surrounding districts to determine superintendent pay. For instance, the Lindbergh School District simply averages salary figures from 11 specific school districts and adds 11 percent to determine its superintendent’s pay.

Districts are required to report superintendent salary numbers to DESE, but the value of their contractual benefits are far less transparent. All superintendents receive some form of insurance through their districts, but contracts rarely specify the monetary value of the coverage. More hidden still are the annuities received by 6.9 percent of all Missouri superintendents. The majority of annuity payments are awarded to superintendents already making more than the median salary, which indicates that annuities are a supplement to regular salary, not a replacement for it. Sometimes this additional money can be quite substantial. The Parkway School District’s superintendent, for instance, earns both $200,000 in salary and a $30,000 annuity. Some superintendents say that annuities are used to offset the difference between their salary and what they could earn managing a private firm of similar size. However, the fact that annuity payments are not reported to DESE suggests that they can also serve as a means for districts to mask the full costs of superintendent compensation from the general public.

The simplistic methods used for determining superintendent salary and lack of transparency in compensation are both cause for concern, but more troubling is the fact that superintendent pay does not seem to correlate with student academic achievement. Spalding tested whether higher scores on the mathematics portion of the Missouri Assessment Program (MAP) test led to increased pay for the superintendents and found no statistically significant relationship between the two variables. Moreover, most school districts do not have any specific method of evaluation spelled out in the contract, and less than 13 percent of districts tied superintendent raises to school board evaluations.

The point is not that school districts are overpaying superintendents. In fact, many — particularly in rural areas — may be underpaid. However, because nearly all superintendents are paid without regard to any kind of performance metric, it is extremely difficult to determine what benefits they bring to the district. If school boards tied at least some portion of superintendent salary to district goals and academic outcomes, and reported total compensation in a more transparent manner, the public would be in a better position to determine whether those resources are being employed wisely. As any good educator will tell you, knowledge is power.

John Payne is a research assistant at the Show-Me Institute, a Missouri-based think tank.