Teacher Unions protest outside Pearson shareholders’ meeting in London.
On Friday, a large majority of Pearson shareholders, in a non-binding vote, rejected a report granting a large raise and bonuses to corporate CEO John Fallon. This was the largest vote of no confidence in corporate leadership, a 61% no vote, in Great Britain since 2009. Fallon’s salary, bonus, incentives, and other benefits, went up by 20% last year to almost $2 million, despite record corporate loses and steep declines in the value of Pearson stock.
In a preemptive effort to manipulate stock prices on the London Exchange prior to the shareholders meeting, Fallon announced Pearson planned to sell off its North American textbook business and other school “products’ like envision Math and iLit. Unfortunately for America’s children, Pearson plans to continue to invest in online “virtual schools,” and high-stakes testing.
Fallon also declared that he used his entire 2016 £343,000 “bonus,” almost half a million U.S. dollars, to purchase additional Pearson stock. These moves boosted Pearson stock value on the London Exchange by more than 10%, but they were not enough to forestall the shareholders’ revolt.
According to an analysis by Leila Abboud of Bloomberg, for the last four years Pearson has been “stuck in a cycle of falling revenue, profit warnings, cost-cutting programs, and asset sales.” Pearson’s problems are the result of major corporate miscalculations. The U.S. higher education market is currently responsible for 25% of Pearson’s sales and 45% of its profits, but “students are increasingly rejecting expensive textbooks and turning to rental programs run by Amazon as well as cheaper online materials.” Fallon keeps promising that the company will return to profitability through “cost-cutting,” but the benefits “tend to be eaten up by declines in revenue as the business weakens.” In addition, third-world markets, where Pearson invested heavily under Fallon’s leadership, have produced virtually zero profit.
Pearson’s sales decline followed by stagnation that is projected to continue into the future.
While Fallon was trying to fend off angry shareholders inside the IET Conference Center in London, outside, teacher union opponents of Pearson’s global policies and their allies staged a protest rally where they released helium-filled balloons with images of Fallon’s face. Representatives from the National Union of Teachers (UK), the American Federation of Teachers (US), the South African Democratic Teachers Union, the Kenya National Union of Teachers, the Danish Union of Teachers, New Zealand Educational Institute and Uganda National Teachers’ Union, and Global Justice Now demanded that Pearson appoint new leadership to end its push for privatized schools in Africa and Asia, and build a sustainable business model that views public education as a fundamental human right, not a leverage point for profits.
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