Is there any guidance or accepted practice on the compensation of interim executives?
There’s no large-scale collection of data on the compensation of interims (executives recruited for short terms from outside an institution), and there's no widely-known standard. Given the increasing role that interim appointments play in higher education, however, yours is an important question. The experience of both AGB Interim Search and the AGB Search/CUPA-HR Compensation Evaluation Service does suggest some answers.
All things being equal, an interim president -- or other interim executive -- should be paid the same as a “permanent” one. The work and responsibility are arguably comparable (each role has its special challenges), and there could be some danger to an interim’s perceived authority in signaling otherwise.
But, of course, all things are rarely equal. A mix of factors may shape the final decision. Is the interim stepping into a position at this level for the first time, or has he or she had one or more successful stints of the same type before? Anyone whom the institution wishes to recruit will have salary expectations shaped by previous positions, and some may need to be significantly incentivized to shoulder the role at your institution. If, as often happens, the individual would come out of retirement, there may be less need to pay benefits but also more interest in salary. Retention, on the other hand, is not an issue, so there is perhaps less need for the salary to be competitive with the “market” of presidents at peer institutions.
In any case, a set of candidates for an interim position will likely include individuals with very different needs and preferences. Understanding these can be critical to identifying the most promising candidates and negotiating the level and types of compensation that will suit all parties.