The virtual charter chain K12, Inc., held its stockholder meeting and faced a double whammy. Investors complained about the schools’ terrible academic results and voted down executive pay raises.
Meanwhile, teachers from the online chain founded by Michael and Lowell Milken picketed outside.
“The vote was another sign of discontent among shareholders of the controversial company K12 Inc., with governance advisory firm Glass Lewis & Co. citing a “substantial disconnect between compensation and performance results” in its recommendation that shareholders vote against the pay proposal.
“K12, which has made a business for itself out of operating publicly funded online charter schools across the country, is at its lowest stock price in five years, down 75% from a high in September of 2013. In the past few months, it has faced an investigation by California’s attorney general and an onslaught of criticism from the rest of the education world, which has largely turned against online schools and their operators because of their students’ poor performance.
“Glass Lewis gave the company an “F” rating for how it paid its executives compared to peers: K12’s CEO, Nathaniel Davis, was paid $5.33 million in 2015; its chief financial officer was paid $3.6 million.”
Diane Ravitch's blog 
“terrible academic results”?
Maybe the students have been denied equal protection of the law because they were taught by inferior teachers.
The students may have a case against the school, or the state that authorized them.
Milken continues to run his business of K 12 as he did with Drexel Burnham. He is no moral compass.
The market will serve its role. This company may be bankrupt soon.
The market doesn’t do a damn thing. It is not a person nor any kind of “acting/doing/thinking” entity. It is an economics description, and a constrained one at that, of limited human economic interactions. As a description it must be adjectival and not a nominative entity and therefore only exists in language and does not exist as a material thing/item in the “real” world.
Please enlighten us as to where this “market” is located, how it interacts in “its role” and what are the legal documents that allow this “market” to be in existences.
TIA,
Duane
The “market” is located at the same location as the “internet” Duane. It is in the ether. It is everywhere and it is nowhere. Where does “collective wisdom” reside?
As Diane rightly points out, ineffective services cannot continue forever. If K-12 gets bad results (I can’t imagine how a purely online school would be effective when young kids have notoriously bad discipline), then their investors will pull the plug as their clients dwindle. The key is transparency. As long as their results (academic and financial) are public, clients and investors can jump ship. If they are not tested, then the public cannot know if they are effective. Just like public schools, the key is the tests.
But it won’t be bankrupt before it seriously damages the lives of many students who would have been better off in brick and mortar schools. North Carolina just approved K12 to operate in the state this year. Now North Carolina children can have the great opportunity of not learning any math for an entire school year. Fantastic.
Eric Brandon, who chooses which students utilize K12 in NC? Is it the students/parents choice? Or are districts assigning students to the online charter school?
I must admit I hesitate to prevent any parent from choosing his/her own children’s education. Eventually, parents will make the right decision with sufficiently transparent information.
Virginia, no student is ever assigned to an online charter. They see ads with glorious (and false) promises, and they sign up, expecting to get a great education at home online. They get a lousy education, their tuition money is taken away from their local school and goes to the corporation. A year in a K12 Inc school is a lost year. The downside of choice and no regulation.
Clearly, some regulation is needed. Just like we have food labels and disclosures for medical products, a standard disclosure is needed for all charters and especially online ones. I find it hard to believe that serious charter advocates would object to such disclosure requirements.
Maybe the more vociferous charter advocates can provide more insight on this. Have there been any attempts to prevent such disclosure requirements? Has there even been an attempt to require disclosure? Would any of the charter advocates object to the following:
1. Average (and range) of student growth (VAM) achieved by students in the charter in each grade for testable subjects
2. Number of students retained in the charter from the beginning of the school year to the end
3. Continuation rate (percentage of students who leave each year)
4. Funding provided to the charter per pupil
Virginia…Your reference of the “collective wisdom” of the market, is laughable, and it does show why you are in a class of your own.
Was it “collective wisdom” when the banksters lied to those seeking mortgages, did bundling of trash and then sold this crap as investments to the world market…remember credit default swaps and and CDOs? And when the rating agencies such a S and P and Moody’s lied and falsified bond ratings…..nd lo and behold, we learned that these same rating agencies are paid for by the corporations they rate? And when Bush and Paulson came to Congress with nothing but chutzpah and asked for billions, on their word, to stop the crash of 2007? And when Enron falsified the books and their traders cackled that they were “sticking it to the little old ladies in California?” And when the Lucent honchos did that secret self off before the public was informed?
I could go on for pages…you must be a hedge fund guy who was in on it all…and yet none of these were indicted for all the frauds..except for the major jerk from Countrywide.
I’m sure their chief officers will be devastated since their multimillion dollar compensation was not raised to new heights. Our tax dollars at work. So much for the market.
Ellen, Virginiasgp is not in a class by him(it)self.
He(it) has no class.
Or any real thinking capacity.
Just ask the folks at this child’s school, who have banned him from setting foot on the premises.
No, Virginia; there is no Santa Clause. At least not for you . . .
Why are ed reformers in government and the private sector pushing online learning into public schools if online has such a terrible track record?
Why such a hard sell for a model that hasn’t shown any success? I hope it isn’t about cutting costs at low and middle income public schools- cheap bang for the buck- because that’s sure what it looks like to me when you strip away all the hype and marketing language.
I hope they don’t actually damage existing public schools- make them worse- by pushing these unproven, wholly commercial product experiments into every public school in the country.
http://www.christenseninstitute.org/publications/blending-toward-competency/
Public school parents will need to be really vigilant and watch that they don’t lose live teachers and courses because of the government/industry push to go to online courses.
If we lose funding for live courses in our schools we won’t get that funding back.
Why are the Milken brothers being allowed near OUR children?
Has the country forgotten that Michael was the “junk bond king” who, in 1990, was sentenced to 10 years in prison for six felony violations of federal law (he served 22 months). Lowell, like Michael, was indicted on federal racketeering and fraud charges connected to insider-trading violations at Drexel Burnham Lambert, the now-defunct Wall Street investment bank where both brothers worked.
Lowell Milken was never convicted—it was widely reported that prosecutors dropped the charges as part of Michael’s plea deal—but he was banned for life from working in the securities industry, and the New York Stock Exchange also banned him.
These frauds must be banned for life from the education industry too.
Lloyd, isn’t is a conundrum to have racketeering Milkens banned for life from the investment industry, but they are still allowed to invest in, and lead, as on the Board of K12, an organization which is publicly traded?
The Milkens being allowed to do anything other than working at a Wal-Mart or a fast food place for minimum wage is an example of fact being stranger than fiction.
Lloyd,
Right on. So awfully true.
When I read the actual title of this article that Diane posted, I have to ask myself, “Why do we even have the words ‘investors’ and ‘shareholders’ in the same strand of text as ‘K-12′ ?”
It is so perverse and morally reprehensible. I swear that once the people wake up completely (right now, they are only partially roused, as to being totally asleep at the wheel for the past 20 years), they will either band together tightly and vote these rascals out and demand and actualize new paradigms from their new politicians . . . .
. . . . or they will literally take advantage of the Second Amendment and gather themselves some major guns to get their point across about what it means to be an egalitarian democracy.
I am hoping only for the former and truly fear the latter . . . . I HATE guns.
The fact that monetized charters even exist shows how horrible and corrupt our political system has become.
And I think of Martin Shkreli getting arrested, and it is not at all hard to connect the dots between his ilk and the ilk that drives the hideous, slanderous, libelous, defamatory, and anti-American narrative of education reform.
Shame on these people.
Mark my words that they will get their upcommance. Ain’t no one done with ’em yet . . . .
Love you Robert, but must disagree….no one will get their comeuppance. Holder, the Wall Street lawyer Obama chose to head the DoJ, and White, the Wall Street lawyer Obama chose to head the SEC, etc. did not press any charges against their bankster buddies, and not the clock has run out and the Statute of Limitations protects them. Blankfein was terrified and hired the best fraud attorney representation…and now he is laughing all the way to the bank…HIS bank. Same for Dimon who got a wrist slap, and a gigantic bonus.
This is the way the legal system works in America.
But, Ellen (love you too!), don’t you think comeuppances come in cycles? They miss in one, and then you might get slammed by them in another? Especially when circumstances change in each cycle? Sort of like a biorhythm: a downward swing might or might not produce for people you despise that special aneurysm that can cause incapacitation.
Sort of like, in the energetic cycles of Karma and in the opposite vein of Hallmark greeting cards: “Send the very worst to those you hate.”
I am, in the holiday spirit, working on my top ten list of how reformers can be eliminated, and there are two versions: one G-rated, one R-rated, and both in perfectly black humor. The former will be posted in the Ravitch blog, and the latter shall be reserved for private dinner parties.
Virginiasgp and Tim, you’re invited . . . . . . You can bring wine or dessert.
K12 was Dennis Kruse’s largest campaign contributor when he had opposition. Kruse sits on senate Ed committee.