The Professor’s

a
P ycheck
by Dan LeClair

U.S. business school salaries continue to rise, but the increases are relatively modest.

B
udget cuts, salary freezes, and straitened resources 2003, compared with 546 in 2002, their numbers influenced
have taken their toll on salary increases for U.S. busi- salary ranges for the whole category.
ness school professors in the 2003-2004 school year. New doctorates saw even better salary increases if they
While schools still have managed to give raises to took jobs within particular disciplines hungry for faculty.
most of their professors, the increases have not been The strongest gains were in management (4.6 percent
high. In hard numbers, the average faculty member is earning a increase), economics (3.7 percent), and marketing (3.5 per-
nine-month salary of $89,900 in 2003-2004, compared to cent). New doctorates also could expect substantial premi-
$87,500 the year before—an increase of 2.7 percent. ums if they were hired by accredited or private schools. For
Figures are drawn from the 36th annual AACSB example, the average salary for new doctorates hired into
International Salary Survey conducted in late 2003 by AACSB-accredited business schools was $92,500, compared
AACSB’s Knowledge Services staff. Of the 647 U.S. business with $67,100 at unaccredited schools. At private schools,
schools invited to participate, a record 519 submitted data, the average salary for new doctorates was $95,200, com-
including 96 percent of institutions accredited by AACSB. pared with $87,100 at public institutions.
These participating schools provided salary data on 25,928
full-time business faculty members by rank in 28 business
fields, and by gender; they also indicated whether each facul- Mean Salaries by Field/Discipline*
ty member was a new hire for 2003 and whether or not the
faculty member holds a tenure-track position. In addition,
Associate
schools offered data about 4,439 administrators in 25 posi- Field/Discipline Professor
tions normally found in business schools.
Figures in these charts are an accurate representation of the Accounting/Taxation $109.0
schools in the survey sample, but they are aggregates drawn
CIS/MIS $105.9
from a wide range of institutions incorporating variables of
size, location, teaching load, student body, and mission. Economics/Managerial Economics $100.3
Individual school administrators and professors should con-
sider their unique circumstances and potential when compar- Finance/Banking/Real Estate/Insurance $124.3
ing salaries, even in specific ranks and disciplines. Management/Behavioral Science/ $108.1
International Business/Strategic Management
Where the Money Is
Not surprisingly, salary increases varied depending on rank and Marketing $109.9
discipline. For instance, average salaries of associate professors
Production/Operations Management $112.0
increased by 2.6 percent, and professors’ salaries increased an
average of 2 percent. Salary increases were greatest for assistant Quantitative Methods/Operations Research/ $107.5
professors, whose average salary rose by 3.4 percent. This sta- Statistics
tistic reflects the fact that new doctorates are generally hired at
the assistant professor rank—and at a premium. In fact, the All fields combined $108.9
average new doctorate earns $5,800 more than an incumbent *Figures are in thousands of dollars.
assistant professor. Because 656 new doctorates were hired in

58 BizEd MARCH/APRIL 2004

 Whatever the institution, the recruitment of new doctor- when there are open positions to be filled. Nonetheless, these
ates was robust. According to survey participants, the average figures indicate a much more active market than in 1996,
number of new doctorates hired in 2003 was 1.3 per school, when schools hired an average of 2.8 new hires and consid-
up from 1.1 in 2002. In fact, schools continued to hire new ered 5.6 percent of their faculty to be new.
faculty at all ranks at a healthy rate. For the fall of 2003, Despite the overall drop in numbers, hiring continued
responding schools reported 2,112 new hires. Almost 60 per- briskly in some fields during 2003, most notably management,
cent were experienced—that is, nei- accounting, and marketing. Most of those fig-
ther new doctorates nor candidates
for doctorates known as “all but dis- Salaries by Type of School*
sertation” (ABDs). On average, each
school hired 4.1 new faculty members Non-
for the fall of 2003. Accredited accredited Public Private
However, these averages dropped
slightly from 2002 figures, in which Professor $112.1 $78.8 $102.2 $125.1
schools reported hiring an average 4.7
Associate Professor $88.8 $68.9 $83.1 $91.9
new faculty. In addition, the overall
hiring rate in 2003-2004 went down Assistant Professor $87.5 $63.2 $81.5 $90.2
slightly from the previous year, when
new hires made up 9.3 percent of full- Instructor $51.5 $46.5 $49.1 $58.3
time faculty. In 2003, that figure New Doctorate $92.5 $67.1 $87.1 $95.2
dropped to 8.1 percent. The numbers
probably reflect a guarded approach ABD $80.7 $62.4 $74.9 $84.8
to faculty hiring, where budget uncer- *Figures are in thousands of dollars.
tainties have led to hiring freezes even

New Hires Across Disciplines

Assistant New New Percent Percent Percent
Professor Professor Instructor Doctorate 2001 2002 2003

$89.7 $89.4 $51.8 $100.7 ➔ 18.2% 14.7% 15.3%

$87.4 $85.5 $50.0 $91.2 ➔ 11.1% 16.7% 13.2%

$72.9 $68.5 $48.2 $69.5 ➔ 9.1% 8.0% 9.9%

$97.3 $101.1 $55.7 $104.4 ➔ 15.8% 14.6% 15.1%

$84.8 $81.6 $52.5 $87.8 ➔ 15.2% 17.2% 17.9%

$86.6 $84.7 $50.0 $91.9 ➔ 13.7% 13.3% 13.4%

$87.9 $88.5 $54.7 $90.8 ➔ 4.3% 2.4% 3.1%

$84.8 $76.0 $47.8 $78.7 ➔ 2.8% 2.7% 2.6%

$86.2 $84.4 $51.0 $89.7 Other 9.8% 9.4% 9.6%

BizEd MARCH/APRIL 2004 59

 Percent of Faculty Not on Tenure Track

2000 2001 2002 2003

Professor 1.5% 1.9% 2.3% 2.2%

Associate Professor 2.3% 2.6% 3.5% 3.7%

Assistant Professor 8.7% 9.1% 10.0% 10.3%

ures are consistent with historical trends, as shown by
comparison with 1996 figures in the “New Hires Across Instructor 79.8% 82.0% 83.7% 84.7%
Disciplines” sidebar.
Most notable is the slowdown of hiring in informa-
tion systems management, which dropped to 13.2 per-
Twelve-Month Administrative Salaries*
cent in 2003 from 16.7 percent the year before and from 18.8
percent in 2001. One possibility is that IT/IS management Position Mean 2003
has been integrated into other fields. Another explanation
Dean $158.0
could be that the information management field still has not
entirely recovered from the dot-com crash and poor per- Associate Dean $128.9
formance of technology companies. Assistant Dean $79.1
Assistant Dean or Director: Development $87.2
The Bottom Line
Overall, there are few surprises in this year’s salary survey; most Assistant Dean or Director:
recent trends still hold. For instance, the inversion of salary Finance and Administration $83.0
rates—where new hires earn as much or more than experi- Assistant Dean or Director:
enced faculty—is still in place and will inevitably contribute to Information Technology $85.1
the escalation of salaries across all categories. Rising salaries for
Accounting Department Chair $124.4
new hires will encourage experienced faculty to move to dif-
ferent institutions to receive pay raises of their own, and thus School of Accounting, Director $142.2
the market will continue to stay extremely competitive. Academic Department Chair $119.4
This tendency toward a fluid job market, however, may be
Assistant Dean or Director:
tempered by fiscal constraints. Some schools cannot attract
Undergraduate Programs $73.1
faculty to fill vacant positions at the premiums earned by new
professors. While budgets remain tight, the hiring situation Assistant Dean or Director: Graduate Programs $87.1
may remain somewhat stable. Assistant Dean or Director:
The long-predicted shortfall of business professors still Career Services/Placement $74.3
appears to be in the offing, though recent events might have
Director of Cooperative Programs $69.0
postponed the worst of the crunch. Fewer doctoral degrees in
business are being granted, but while financial market per- Assistant Dean or Director:
formance remains uncertain, faculty members may find them- Executive Education $105.0
selves unable to afford to retire. While the doctoral shortage Director of Internships $53.0
looms as a huge potential crisis, schools might have been
MBA/Master’s Admissions Director $68.0
granted a brief reprieve.
Schools also might be dealing with both the doctoral fac- Assistant Dean or Director: MBA Programs $85.1
ulty shortage and the salary crunch by hiring fewer teachers Small Business Administration Director $66.1
into tenure-track positions. Across all ranks, the numbers of
Director of Communications/Public Relations $67.1
faculty in non-tenure-track positions have risen slowly but
steadily for the past several years. It seems clear that more Executive MBA Director $89.1
schools are using adjunct or visiting professors to fill in open Director of Research $103.5
teaching slots, or they might be hiring faculty on a more tem-
Director of Distance Education $74.6
porary basis while they consider how to restructure staffs to
create long-term solutions. Major Gifts Officer $74.7
Despite these adjustments, salaries for management pro- Director of Business Library Services $71.0
fessors are strong and are likely to continue to rise as compe-
Other $59.0
tition increases for both new and experienced faculty. The
next year’s employment patterns appear to portend opportu- *Figures are in thousands of dollars.
nities for professors and a challenge for administrators. ■ z

60 BizEd MARCH/APRIL 2004