How to Profit Off Shareholders 101…

Funny, but we didn’t see that course listed in the online catalog at DeVry University (DV).  Yet Ronald Taylor, the CEO of the ubiquitous technology school, sure seems to have mastered the art.  In the proxy DeVry filed late yesterday, the Company disclosed that Taylor’s bonus jumped from $180,000 in 2005 to just over $810,000 for 2006.  Also spotted in the footnotes to the summary compensation table were the $31,500 in director fees paid to Taylor for sitting in on presumably one board meeting during the year.  This is in direct contrast to the policy most companies have of only compensating non-management board members. 

Moving down the proxy, buried in what is normally boilerplate information under the "Employment Contracts" section, were the details on Taylor’s retirement deal, which is effective on November 15.  Taylor will become a "Senior Advisor" under a fifteen-year agreement that is divided into an initial five-year period and a final ten-year period. Taylor will be provided with an office and an annual salary of $420,000 during the initial period and, during the final period, an annual salary of $50,000.  If that weren’t enough, DeVry also agreed to pay Taylor $140,000 in additional salary for making himself "available for up to 40 hours to provide any advice, counsel and assistance the Board of Directors may request to facilitate the transition of CEO responsibilities" during the four months after Taylor’s retirement date.  It wasn’t immediately clear whether the proxy intended to read "up to 40 hours per week" or just "up to 40 hours" in total!

Seems as though Taylor is making a pretty tidy profit off a company whose stock has consistently underperformed its peer group and the NYSE Market Index for the last five years.  Maybe DeVry should offer classes on how to increase shareholder value. We know a few people who could really benefit from that class.