From Washington Post Pays Kaplan CEO $76 million while students left $50,000 in debt and Maryland Congressman, Elijah Cummings and Senator Durbin calls for investigation into for-profit predatory college CEO pay by Danny Wei, The Daily Censored
On December 12, 2011, Maryland Congressman Elijah Cummings sent letters to the CEO’s of 13 for-profit colleges requesting information on executive compensation packages to investigate “how the structure of your executive-compensation packages affects the performance of students educated with taxpayer funds.” Cummings is a member of the House Oversight and Government Reform Committee” (Chronicle of Higher Education, Key Congressman Begins Inquiry Into Executive Pay at For-Profit Colleges, December 12, 2011, Goldie Blumenstyk http://chronicle.com/article/Key-Congressman-Begins-Inquiry/130090/).
According to the Chronicle of Higher Education:
“In each individualized letter, Representative Cummings, from Maryland, noted the high proportion of revenues coming to the company via federal aid, the rate at which students default on their federal loans, and the share of operating expense the company puts to educational costs” (ibid).
Cummings may want to pay special attention to the golden parachute given to former Kaplan CEO Jonathan Grayer in 2008. The amount is so grossly laughable it can be considered criminal; unfortunately it’s not under our bought and paid for neo-liberal government.
According to the Washington Post Company’s November 19, 2008 8-K filing, in 2008 Grayer resigned and was given 18 months base salary and a payment of $46 million related to the Kaplan Stock Option Plan (UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K, November 19, 2008
http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=6261618&SessionID=SNHoHeDu1Wnqz77). The agreement also included guaranteed payments to Mr. Grayer of $10.0 million on November 19, 2009 and $20.0 million on November 19, 2011.
The $20 million payment in November 2011 was larger than the entire Kaplan’s 2011 3rd quarter operating income of $18 million. Since long term student loan default rates may soon approach 50%, this generous ‘payout’ is funded by the US government through you — the taxpayer. You fill the trough with your hard earned funds while the piglets feed, along with their silk-backed lawyers, of course.