Dive Brief:
- Claiming the existence of a “substantial disconnect between compensation and performance results,” investors in the virtual charter school operator K12 Inc. voted down the company’s proposed plan regarding executive pay at an annual shareholder meeting; in 2015, CEO Nathaniel Davis was reportedly paid $5.33 million dollars.
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K12’s stock is now down 75% from its 2013 high, and Buzzfeed News reports that it is valued at its lowest price within the last five years.
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The company is currently being investigated by the attorney general in the state of California and has faced ongoing protests from its own teachers — some of whom have recently unionized.
Dive Insight:
The tide of positive sentiment seems to be turning away from online charters — and K12’s chain of schools in particular, given recent allegations of fraud, poor student performance, and a host of accusations around poor teacher pay and unrealistic demands. One lawsuit from April 2014 claimed that former K12 CEO Ron Packard “mislead investors by making wildly positive statements about the company and its future, only to reveal it was actually financially off-target.”
In a California chain of K12's virtual charters, teachers have unionized, and a subpoena delivered to K12 revealed that the California Attorney General’s Office is currently undertaking an investigation of virtual charters in the state.
But K12 appears to be looking forward. Part of the company has already rebranded under the new name, Fuel Education, said to be a provider of “personalized learning” platforms, professional development content, consulting, and virtual classes.