ITT Educational Services, the embattled Carmel-based operator of for-profit colleges in 38 states, has terminated its chief administrative and legal officer after less than two years on the job.
Ryan L. Roney, who was also an executive vice president and served as ITT’s corporate secretary, was terminated effective June 6. The company made the disclosure in a U.S. Securities and Exchange document filed on Friday.
The disclosure does not give a reason for Roney’s termination. But it does say that ITT and Roney “are discussing a possible consulting agreement.” If that agreement is finalized, ITT said, it will disclose the terms in a subsequent SEC filing. As of Monday morning, no such disclosure had been filed.
Editor's note: ITT Educational Services announced June 17 that it entered into a four-month consulting agreement with Ryan Roney on June 13. The agreement, effective June 6, will pay Roney nearly $32,000 per month.
In an e-mail to IBJ, ITT spokeswoman Nicole Elam said Roney’s termination was “unrelated to any of the company's business activities.” She declined to further discuss the matter, saying that for reasons of privacy the company does not publicly discuss personnel matters.
Roney did not immediately respond to an IBJ e-mail seeking comment.
Roney joined ITT in July 2014. Before that, he served as chief legal officer, executive vice president of business development and corporate secretary of Vistage International, a San Diego-based membership organization for business executives.
According to ITT’s most recent proxy filing, posted in April, Roney was the fourth highest-paid executive at the company last year. His 2015 base salary was $360,000. Including the value of his stock options and other compensation, his total compensation last year was $679,320.
The move comes at a turbulent time for ITT and the for-profit education industry.
Last week, the Department of Education sent a letter asking the school to show that it has more than $123.6 million available to refund students in the event ITT shuts down unexpectedly.
The education department requires hundreds of for-profit and not-for-profit colleges to post letters of credit from banks showing they have a certain level of cash reserves. ITT previously was required to have $79.7 million on hand, but the department said they were raising the company’s surety requirement because the school was facing additional scrutiny from the Accrediting Council for Independent Colleges and Schools.
The department cited an April 22 letter in which ACICS questioned ITT’s “administrative capacity, organizational integrity, financial viability and ability to serve students that complies with ACICS standards.”
The ACICS said ITT was facing civil investigative demands from 19 state attorneys general regarding marketing, recruitment, financial aid, academic advising, career services, admission practices, accreditation, graduation rates and job-placement performance.
In addition, the ACICS said ITT faces litigation and investigations from three federal agencies related to the school’s “student-lending practices and misrepresentations to investors.”
Staying in compliance with the ACICS is important for ITT because it would lose its federal funding for student loans without it. Most of ITT's revenue comes from federal loan funding.
Shares of ITT were trading at $1.61 early Monday afternoon, down 6 cents from Friday’s close. Over the past year, the stock has traded in the range of $1.61 to $6.62 per share.