Question

One might expect university president compensation to increase when contributions rise, as more effective fundraisers are rewarded for their success. Nevertheless presidents of universities that receive large private donations are paid less than presidents of universities with few private donations. Why this relation?

Answer 1

Explanation:

Because studies find that large donors respond negatively to pay increase and would be less likely to donate in the future and, as fewer donors with larger donations, they have more influential power than in a context with multiple donors with smaller donations. Therefore, to secure those fewer but large donations, presidents receive less than in another context.