Carmel-based ITT Educational Services Inc.’s management team will get special cash bonuses if they remain with the
company until the end of June, ITT disclosed in a regulatory filing last week.
Chairman and CEO Kevin M. Modany would get the biggest boost—nearly $1.2 million—if he stays at the helm through
June 27, 2011. His compensation totaled $7.6 million in 2009, the latest year for which figures are available.
Other top managers are set to receive six-figure cash infusions: $324,000 for Chief Financial Officer Daniel M. Fitzpatrick;
$319,000 for General Counsel Clark D. Elwood; $295,000 for Eugene W. Feichtner, president of the ITT Technical Institute division;
and $263,000 for June M. McCormack, president of ITT’s online division.
ITT's offices were closed Monday, spokeswoman Lauren Littlefield said in an e-mailed response to a request for additional information on the newly approved bonuses.
But in a Dec. 23 filing with the Securities and Exchange Commission, ITT said its board’s compensation committee approved
the bonuses “in order to help motivate and retain those executives“ and recognize their “extraordinary efforts”
as the company and its for-profit peers have come under fire from federal officials.
New student-lending rules scheduled to go into effect in mid-2011 are expected to pinch profits by restricting access to
federal loans—which now account for about 80 percent of ITT’s nearly $1.6 billion in annual revenue.
The U.S. Department of Education unveiled data in July showing that only 31 percent of former ITT students have repaid or
are paying down their federal loans four years after leaving, suggesting their time at the school did not lead to “gainful
employment.”
Analysts say ITT would likely have to cut prices, raise admissions standards or even eliminate some programs to meet the
new standards, which likely would reduce its $375 million annual profit.
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ITT preys on those people that have no money so that they can get their hands on the Pell Grants and Stafford loans that their students qualify for. These student would be those that have been out of work so long that their taxes show they have no income, people on disability, single parents, and those that may be receiving military benefits. You see the cost of ITT is so high that a substantial amount of potential students would not be able to afford the out of pocket expense or even qualify for any private financial aid.
ITT has does not care about the type of student they enroll. They have no standards other than a high school diploma or GED. Some of these student could barely get there high school diploma or GED. And they are asking them to invest in an education that they will fail at because they lack the background or even will power to even be successful.
So if you ask me, these top executive are receiving money from the federal government. I would compare this to the bonuses that were handed out to bank executives during the bailout, money that is intended to help but used for the wrong purposes.
But that is capitalism.