An Idea that Refuses to Die: Bonuses for Heads of School

Halloween is around the corner bringing with it countless scary movies replete with a monster or villain that just refuses to die. The trope is so typical of the horror genre that one knows without seeing the movie through to the end that the character will re-emerge at least once and maybe twice. Think Glen Close coming out of the bathtub in Fatal Attraction. 

An idea that similarly won't die among board members in independent and, especially, international schools is about the importance of bonuses as part of compensation schemes for heads of school. Maybe because bonuses tied to all sorts of metrics are so standard in the corporate world, board members assume they should be equally common in schools.  

We have long held that this view represents a gross misunderstanding of the difference between corporate and school cultures. Privately, many heads of school find the notion insulting that they would need a bonus to do their job at the highest level, even if they play along with the bonus idea when negotiating their contract. Because school performance is harder to quantify than, say, manufacturing, boards themselves often get tied up in knots trying to figure out how much of the bonus to pay out. Just given these factors, we think the downside outweighs any potential upside to anything other than a contract completion bonus for heads of school. Now, an article in the 10 October 2024 Economist on the very real risk that executive bonuses incentivize the wrong things adds to the case.