Santa Ana, Calif.-based adult-education company Corinthian Colleges (NASDAQ:COCO) has given its chief executive a 28 percent raise after a year of struggling with nearly flat revenues, declining earnings and a stock-options probe.
The board's compensation committee decided January 26 to pay Jack D. Massimino a salary of $800,000 a year, retroactive to last July. His salary for the past fiscal year was $624,000, with total compensation of $751,500 including a further $127,500 in other long-term compensation.
In its latest quarter, which ended Dec. 31, Corinthian had revenues of $245 million, up 2.4 percent from a year earlier. The quarter's net income was $2.6 million, down from $10.7 million a year earlier.
For fiscal 2006, which ended June 30, sales totaled $967 million, up less than 1 percent, while net income was $41 million, down 29 percent.
Last August, the compensation committee had delayed action on executives' pay because of the ongoing investigation of Corinthian's stock options. That probe has now ended, with the result that Corinthian Colleges added $5.7 million in expenses to past financial reports.
To help it determine Massimino's pay, the committee said it "retained the services of a nationally recognized compensation consulting firm to advise it regarding compensation levels at other companies against whom the Company competes for executive talent."
In addition to raising Masimino's base salary, the committee set his fiscal 2007 target bonus at 115 percent of his base salary. He also gets the option to purchase 210,000 shares of Corinthian's common stock at today's closing price, plus 30,000 restricted stock units. Those will vest between August 2007 and August 2010.
Corinthian shares after hours Friday were at $13.34, up 9 percent in the past three months but down 1 percent from a year ago.
COCO 1-yr chart
Disclosure: Author has no position in COCO.