Thursday, November 11, 2010

$42 million for the CEO of Strayer Education Inc.

Bloomberg reported yesterday that the chairman and CEO of Strayer Education, Robert Silberman, was paid $41.9 million in compensation last year.  Or, as Bloomberg put it, "That’s 26 times the compensation of the highest-paid president of a traditional university."  Bloomberg went on to note that Strayer receives three-fourths of its revenue through federal student loans and grants.  And Silberman is not the only executive in the proprietary sector receiving this kind of compensation; the Bloomberg article indicates that Charles Edelstein, co-CEO of the Apollo Group (corporate parent of the U. of Phoenix, the country's largest postsecondary institution) received $6.5 million in compensation last year.

Compensation of executives of for-profit education companies has been in the news of late, with all of the focus on this sector and its dependency on revenues through federal Title IV funds.  Much of Silberman's compensation was in the form of stock options granted last year, so it's not as if he was paid the $42 million in salary.  Nevertheless it is tempting to compare Silberman's compensation - and his responsibilities - with the heads of other postsecondary institutions.

Here's a comparison of Strayer, Penn State, and the State University of New York system (all figures are for FY2009):


Total Revenues

Number of students


CEO compensation
Strayer $512 million 54,300 87 $41.9 million
Penn State $4.042 billion 92,613 24 $642,760
SUNY $8.456 billion 218,528 64 $654,996

You can draw your own conclusions.