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Some professors direct large research programs. What is the typical practice for compensating them?

For example, it is not unusual for a top professor to be directing $30 million in research grants every year. If the professor got only 1% of this, it would be a salary of $300,000 per year. I would assume they are paid more than that.

Please do not answer vaguely (impossible to know, it differs from place to place). Obviously, it differs from place to place. I want to know the general and typical practices. What is a common method of compensation.

I am just interested here in compensation for grant-making ability. So, if that is a factor in salary, I would like to know the effect on salary.

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    Are you looking for total income from all sources - such as including consulting, or just compensation from the institution + any funding from other grant/funding sources?
    – BrianH
    Apr 6, 2016 at 13:36
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    If you don't want to get comments telling you that it differs from place to place, give the location(s) and field you are primarily interested about.
    – Cape Code
    Apr 6, 2016 at 13:50
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    Basically, yes, they don't. Most profs are paid a given monthly salary in the US at a fixed rate by their universities. These are usually 9-month appointments. They can pick up 3 summer months through various mechanisms including grants.
    – Bill Barth
    Apr 6, 2016 at 14:23
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    "That is time they could be spending doing research instead" - in some fields, the grant money is often what allows the professor to do research, e.g. by purchasing equipment and hiring students to help carry out the research. It's not a choice between writing grant proposals or doing research in X units of time - if you don't have funding, you can't do research.
    – ff524
    Apr 6, 2016 at 14:26
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    While there is the 25% salary augmentation mentioned in the answers below, another important factor to also mention is that it is my understanding that grant money can indirectly affect salary: if a department believes that a candidate is able to bring in large grants, they are likely to be offered a larger salary.
    – Cliff AB
    Apr 6, 2016 at 14:57

4 Answers 4

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In the United States, the amount of money that a professor makes is not generally a percentage of the amount of funding that they have under management. Instead, professors are typically guaranteed a 9-month salary and can supplement with 3 additional grant-funded months (generally at the same rate) for summer. That salary is set by a combination of regulation, negotiation, and academic rank, in a manner vaguely similar to salaries at a large corporation.

Thus, high funding correlates with high salary because a well-funded professor is also likely to be progressing in their compensation package, but there is typically an effective "cap" on the amount that a professor can receive through their university (consulting, startups, and patent licensing fees may be an entirely different matter, but again are not actually determined by research funding, just correlated as being another common product of a successful research).

As for the actual compensation of specific faculty: for most US state-funded institutions, you can find complete salary databases published as public records. For example, here is one for Berkeley. Private institutions have relatively similar compensation rates (or a bit higher), since top private institutions are competing with top public institutions for the same talent.

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  • I worked at an institute in the US that 1) paid faculty a fixed salary but 2) reserved the right to reduce that salary if faculty were not bringing "enough" outside funding. The expected funding levels and the salary reductions were determined by a formula that accounted for various factors (seniority, admin responsibilities, etc).
    – Matt
    Apr 7, 2016 at 13:53
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I am just interested here in compensation for grant-making ability. So, if that is a factor in salary, I would like to know the effect on salary.

While it is very unusual, the University of Arkansas has a Faculty Salary Funding Incentive Plan faculty can earn cash rewards up to 25% of their regular salary for bringing in grant money that covers their regular salary.

But, the total amount of this "bonus" is still a percentage of the base salary, not a percentage of the grant funding.

In the United States, two major sources of grant funding are the NSF and the NIH, both of which limit how much PI salary may be charged to grants:

  • The NSF limits the amount of salary senior personnel can receive from grant funding to 2/9 of their regular base salary. (See this question for more on that.) This roughly corresponds to a professor getting up to 2 months of their base salary from grant funding, while they typically get 9 months from the university.
  • The NIH limits the salary that one may receive from an NIH grant with a salary cap.

Professors work hard to get grant funding not because they earn a lot of money from it, but because (a) it's often expected for promotion and tenure, and (b) it allows them to buy equipment and hire students to help carry out the research they want to do.

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In Australia, the salary of an academic is not a percentage of grant income. However, there are a few connections between salary and grant income.

  • Promotion: Getting grant money is one of the best ways to get promoted up academic levels. The pay scale for the five academic levels are available on most Australian University websites. For example, the salary of the top of level A (Associate lecture) is typically about half that of Level E (Professor). As a rough guide (and this varies a lot across disciplines, universities, and whether you focus more on service, research or teaching), you would be expected to have some grant income when going for Level C and above.

  • Professor-plus positions: Some universities have special professorial positions for exceptional researchers. These academics are typically paid more than regular professors, and in some cases may even be on separate contracts that they negotiate. Being in charge of $30 million in grant funding would make you a good candidate for getting one of these professorships.

  • Maintaining a pure-research position. If you work in a pure research role, you are typically on "soft-money". Thus, if you don't continue to win grants, then you may be out of a job. So that's a difference between having a salary and having no salary.

  • More money for a better academic life: If you have grant money, then subject to the grant provisions and university expenditure policy, the grant money can often be spent on all sorts of academic activities. While this is not income that you can spend on yourself, if you are an academic that enjoys going to international conferences and so on, then you are going to have more money for those kinds of things. You won't have to spend your own money to top-up such trips. And you might be able to stay in a reasonable hotel rather than an ultra-cheap hotel.

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In Germany, one Euro in grants will typically not automatically increase your salary by x Euro-Cents. Instead, professors will have (possibly multi-year) targets: "Over the next three years, bring in at least x Euro grant money as principal investigator." If you reach your target, you will get a temporary salary increase (Leistungszulage) until the next target review. Reaching your target multiple times in a row may lead to this increase becoming permanent. (Of course, professors' targets usually also include publications, teaching and service.)

As elsewhere, more success in acquiring grant money will strengthen your position on the job market. You will get more offers and have a better bargaining position for Berufungszulagen and Bleibezulagen, so grant success correlates with your salary indirectly.

I have attempted to describe the German academic salary system here: Do professors in Germany have other payment than their standard salary?

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