For-Profit College Executives Make Much More Than Their Higher Education Counterparts [INFOGRAPHIC]
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For-profit colleges have been in the hot seat over the past two years, with the federal government and more than a dozen state attorneys general probing fraudulent recruiting tactics and high student debt levels.
But there has been relatively little attention paid to how the Wall Street corporations that own many for-profit colleges pay those at the top.
A Huffington Post analysis of compensation across higher education reveals that CEOs and former CEOs at for-profit college corporations bring home much more than the presidents of some of the most prestigious public and private universities in America, despite questionable outcomes for students. In addition, many of the top earners at for-profit colleges received more in compensation than football and basketball coaches at large public universities - traditionally the highest-paid officials at schools with major sports programs.
Graphics by Chris Spurlock
Methodology: To do the analysis, HuffPost analyzed the top compensation at a sampling of the largest public universities with the highest-paid coaches and athletic directors. We also analyzed compensation for the highest-paid employees at Ivy League institutions, which typically included investment managers and professors, along with university presidents. HuffPost analyzed compensation for CEOs at all publicly traded college corporations. To calculate graduation rates, we analyzed Department of Education data for schools owned by the for-profit corporations listed in the graphic, and the public and Ivy League schools shown above.
Graduation data is based on first-time, full-time students, which is the most consistent federal data available.
The highest-paid for-profit education executive was Gregory Cappelli, the co-CEO of the Apollo Group, parent company of the University of Phoenix. Cappelli was awarded more than $25 million in total compensation last year, which includes more than $19 million in stock that was awarded last year but will vest over the next three years. He will not receive additional stock awards through 2014. By comparison, Coca Cola chief executive Muhtar Kent logged $24.7 million in 2010, and Starbucks chief executive Howard Schultz received $21.7 million in 2010, according to compensation data.
Kent's compensation includes more than $10 million in stock and option awards in 2010, and more than $5.5 million in retirement and deferred benefits. Schultz's award included nearly $17 million in stock and option awards in 2010.
Some of the highest payouts at for-profit colleges went to executives who left years ago, or recently resigned.
Jonathan Grayer, the former chief executive of Kaplan Inc., received a $20 million payment last November - part of a $76 million agreement with the Washington Post Co. when he resigned in November 2008. The plan included $46 million in stock options, along with a $10 million payment in 2009 and a $20 million payment last November, according to a securities filing from the Washington Post Co., which owns Kaplan.
A spokeswoman for Kaplan declined to comment beyond what was in the filing. Elliot Sloane, a spokesman for Grayer's current investment firm, Weld North, confirmed that the $20 million payment was made in November.
"The deal with Jonathan was a culmination of 18 years of work at the Washington Post Company," Sloane said. "Tremendous value was created for Washington Post shareholders during those years."
Another top payout will go to Gary McCullough, who resigned as chief executive of Career Education Corp. amid an internal investigation that found several of the company's health and arts schools were lying about job placement rates for graduates.
His compensation of more than $4.5 million will include continuation of his $824,000 base salary and bonus payments of more than $3.4 million.
By comparison, the highest-compensated Ivy League president was Richard C. Levin of Yale University, who received $1.6 million. The highest-paid public university president was Gordon Gee of Ohio State University, whose compensation package is about $1.9 million.
The highest-paid college coach last year was Rick Pitino of the University of Louisville, who received more than $7.5 million. The compensation included a one-time $3.6 million bonus for completing the duration of his contract.
Much of the compensation for coaches, athletic directors and public university presidents comes from private sources, not taxpayer funds.
UPDATE: Jan. 31, 11:52 a.m. -- This article has been updated with additional information about compensation for Apollo Group co-CEO Gregory Cappelli.
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