This booklet describes some of the practices of committees charged with setting the compensation of the college or university president or chancellor. Whether the institution is private or public, the president's income will become public information, and apart from any public relations implications, it simply makes good sense for the compensation of the chief executive to be set intelligently and responsibly with the full board's approval. The role of the compensation committee, or equivalent group, is to accomplish this objective in a way that provides for all reasonable protection of the chief executive's privacy while taking account of the significance of compensation as a means of recognizing achievement. Establishing a compensation committee is only one way of carrying out the compensation setting function, but it is important to keep the process of setting the chief executive's compensation separate from that of setting other administrative and faculty salaries. Designated committees must set goals, assess presidential performance, and survey the market. It should design the compensation package in consultation with the chief executive and the full board. The process must be established as policy by the full board and understood by the entire board as well. (SLD)