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I'm sure this situation is similar to football coaches, CEOs, and pro athletes - a few true stars justify a huge compensation package based on actual performance - funds raised, ticket revenue, profits generated, etc...
Some of the increase in administrative costs is consumer driven
Faculty did some externally funded research but it wasnt the billion dollar enterprise it is today, with centers and institutes on every imaginable topic, each with a director and staff as well as affiliated faculty, aimed at maximizing the universitys haul of research dollars. They didnt have big bureaucracies to supervise and audit all the externally funded research, either; truth is, supervision was minimal, and some got in trouble for it.
-- Patently untrue. Programs and initiatives are cut, merged or eliminated altogether all the time. Because schools have had to become more entrepreneurial, programs are also often run like businesses. If they don't generate money, they're done away with. As are jobs and positions.
So, are there some successful universities, public or private, that pay their presidents a lot less?
I think it's time for people to educate themselves on how the 21st century university works -- because the very language you use ("fifedom") indicates your understanding of today's schools is somewhat antedilluvian.
Online courses, "weekend" colleges for part-time students, study abroad, recruitment of international students and out of state students -- all these are examples of programs that generate money for schools. And that require administrative staff.
On the academic side, many of the that you deride generate money because they bring in private and government grants. Yet they also require investment, and staffing.