Interlocking Boards of Trustees and University Presidents

I have just been going through some biographical information about college presidents. Two points appear salient. First, of the top 50 schools, better than 80 precent of college presidents are outside hires. That means that college presidents' pay ought to be largely a market phenomena as opposed to being driven by "internal equity" or organizational culture considerations. I was somewhat surprised that most top tier university presidents are outside hires as opposed to promotions from within. That may be because inside hires bring past political baggage with them, or it may be because there is a glamour to outsiders, i.e., "familiarity breeds contempt" and "the grass is always greener on the other side of the fence".

The second interesting point is that many of the top tier schools' presidents serve on corporate boards as well as boards of other colleges. This would be consistent with the idea that social pressure plays a role in pay determination. Since interlocking or cross-serving boards suggest the presence of social pressure and cognitive dissonance, such factors may be playing a role. Jensen and Fama might argue that college presidents are hired to corporate boards because of their management expertise. If this is so, then why are their salaries so much lower than corporate executives'? (The order of magnitude is that corporate presidents' salaries are around ten times higher than college presidents').

In other words, there seems to be a contradiction. If presidential skill levels are so scarce as to warrant high salaries in the corporate world, why are skills of college presidents, who earn one tenth those amounts, in demand for corporate boards?