The salaries of Australia's highest-earning vice-chancellors have passed the $1.5 million mark and experts say they are unlikely to slow down, as one university embarks on an international search for a new head.

The University of Sydney's Michael Spence had a salary package of $1.53 million last year, slightly less than the University of Melbourne's former vice-chancellor Glyn Davis's salary of $1.59 million. Mr Davis's remuneration includes base salary, any performance-based bonuses, superannuation and benefits such as university-owned residences and vehicles.

At the same time, teaching staff are complaining about high levels of casualisation and Australian institutions are at the bottom of the list in global rankings for their staff-to-student ratios, despite five local universities being ranked in the top 50 of the world's best institutions.

Andrew Norton, the Grattan Institute's higher education expert, said the steady rise of vice-chancellors' salaries is linked to structural changes in the 1990s that led to universities transforming into business operations with greater separation between their academic and executive arms.