Struggling For-Profit School Operator Was Generous to Top Executives – The Wall Street Journal
Education Management Corp. paid Chief Executive Mark McEachen more than $14 million as the company he stepped in to lead sold off its business and prepared to shut down.
A for-profit school operator, Education Management was already facing lawsuits and fretful regulators when Mr. McEachen accepted the CEO role in September 2015. Within months, the Pittsburgh company agreed to $200 million worth of settlements with state and federal regulators.
Not long after, it began the process that led to the closure or sale of the schools and, last week, bankruptcy for the company.
In the 2015 settlements, Education Management admitted no wrongdoing. However, allegations the company had misled students and the government that offered student loan funds took a toll on its enrollment figures.
“We had to look at the realities of the situation,” Mr. McEachen said Thursday, speaking about the fate of the company that was once one of the country’s largest for-profit educators.
His pay package, he said, was negotiated in advance of his taking the CEO post at a business that was facing headwinds. The $14 million figure was paid out over a seven-month period and appears to include about $13 million in bonus or severance pay. Mr. McEachen is one of several top executives that received bonuses or severance packages in the 12 months leading up to last week’s bankruptcy filing, court records show.