Executive Compensation issues: Top Pearson Exec @ $1.7M _ Top Hewlett Foundation Exec @ $2.3M _ Top Creative Commons Exec @ $385K

Executive Compensation issues:

Top Pearson Exec @ $1.7M

Top Hewlett Foundation Exec @ $2.3M

Top Creative Commons Exec @ $385K

 

Some College Students Are Angry They Have To Pay To Do Their Homework

Digital learning systems now charge students for access codes needed to complete coursework, take quizzes, and turn in homework.

 

COMMENTS:

Don Gorges ·

__Thanks Leticia for offering this fresh approach by focusing on digital educational resources. And I appreciate that you have done your research too, while providing links to a series of financial documents for M-H & Pearson. However, these documents don’t support the premise of price-gouging profiteers _ “These companies, which long reaped big profits as textbook publishers. . .” _ “the digital access codes represent the same price-gouging ethos of the textbook business. . . ” _scanning the docs one finds M-H profit at about 3% and Pearson’s at about 10% in 2014 – prior to the re-org losses of 2015.
The bias that some people have against educational publishers has been fuelled by repeating factual inaccuracies and unfair analysis.
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Denise Brumley ·

Hi Don!

I’m not sure what your profession is or how much experience you have with financial statements.

I did pull their 10-K statement. You’re correct that their Net Profit was approximately 3% of their revenues. However. Some of that is their fault though.

Their cost of goods sold is approximately 25% which is EXTREMELY low for a manufacturing company. If they’re only turning a 3% profit, that money is being spent on operations–mismanaged operations I’m sure.

Their Administrative and Operating Costs are EXTREMELY HIGH. Probably because of salaries and such. (In manufacturing, hourly workers that work in warehouses and directly contribute to the making of their product—those costs are part of their cost of goods sold–managers salaries and office workers etc go into the Admin/Operating Expenses

So let’s see….They pay their president an annual salary of $1,000,000. They pay the next 5 people in line between $350K-$800K a year. He also received a bonus of $1 million in 2015 and the other people I mentioned received a bonus between $300K and $700K. A bonus. I’m going to say it again. They paid their president a bonus that was 100% of his salary. On top of this bonus and salary, he was awarded approximately $9 million in stock options (which when exercises are going to be much much more if in the money). Let’s see. Oh yes! He received a MONTHLY housing allowance of $20,000 and the company paid for his $1200/yr gym membership. Oh! You’re really gonna like this! We also paid approximately $15,000 to reimburse business trips HIS WIFE took in first class. Now, we’re not even talking about pensions and all the other frills.

So, yes. The financial statements report that they cleared approximately 3%, but that’s because they’re squandering their money and being very “creative” with their financial statements (that’s why they hired the best of the best ‘Ernst & Young’ to do their statements). They have a 75% gross profit. They’re making a SHIT TON of money. If they weren’t, I ASSURE you they wouldn’t be paying out million dollar bonuses.

Soooo….they’re greedy..

B.B.A in Accounting
B.B.A in Finance
A.A.S. In Accounting

Unlike · Reply · 2 · Sep 1, 2016 5:08am
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Denise Brumley ·

All colleges and all companies that supply the MANDATORY necessities for colleges should all be not-for-profit. It’s ridiculous that a college can markup education—ESPECIALLY when they receive sooooo much money from the government. I went to Georgia State University. You wanna piss of your students. I’ll tell you the fastest way! Charge them $7000/semester, $1500 for books, $380 for parking, and then boast on your FB page as to how you just accepted over $300 million in donations. 🙂 ��
Like · Reply · Sep 1, 2016 5:14am
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Don Gorges ·

Thanks Denise, for your insightful research into Executive Compensation issues – they often seem irrational, based on a company’s less than stellar performance. Your expertise in business analysis is very helpful, and you’ve made other contributions to this stream of comments.
I expect that the nature of publishing [high-value talent and high-cost labour] explains why, as you’ve pointed out, “Administrative and Operating Costs are EXTREMELY HIGH”.
Underscoring the sense that Executive Compensation often seems irrational, this may of interest too:
The Hewlett Foundation has provided $190M since 2000 to Grantees in support of their efforts to replace commercial textbooks with open educational resources.
The Hewlett Foundation’s 990PF indicates the top executives listed earn between $2.3M – $440K. [ http://www.hewlett.org/…/Hewlett-%202014%20Form%20990… ]
A key Hewlett Foundation Grantee is The Creative Commons Corporation where the CEO earned $385K in 2013 [ http://990s.foundationcenter.org/…/043585301_201312_990… ]
Like · Reply · Sep 9, 2016 12:51pm
NOTE: A Review of Pearson Financials found errors in all of Denise’ claims above
2016 09 09
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