Date: September 25, 2006
Author: Insider action: Daniel Lee
[This article is no longer online, so I posted the whole thing (I searched google and indystar.com first.
]http://www.indystar.com/apps/pbcs.dll/article?AID=/20060925/COLUMNISTS22/609250332
September 25, 2006
Insider action: Daniel Lee
Champagne's compensation flows from ITT's tuition
Education pays. Just ask Rene Champagne.
The chairman and chief executive officer of ITT Educational Services, the Carmel for-profit educator, has been racking up some impressive compensation numbers. At the same time, ITT students have been paying some lofty tuition bills.
In 2005, Champagne took home a pay package -- salary, bonus and stock-option grants -- worth more than $4 million.
He's cashed in some of his ITT stock holdings, too. So far in 2006, he's netted $8.61 million from exercising options and selling shares of ITT using a prearranged stock-sales plan, according to Thomson Financial.
ITT spokeswoman Nancy Brown said Champagne's stock sales were for financial diversification.
Such compensation is no surprise, given ITT's performance.
In ITT's most recent quarter, revenue was up 10 percent from the year before, to $361.9 million. Net income was up 19 percent to $44.6 million.
That's boosted the stock price. Shares of ITT, which closed at $65.34 Friday, have gained 88 percent in value over the past two years.
It doesn't take a Wall Street wizard to see what's driving the bottom line: tuition.
An education at ITT Technical Institute isn't cheap. ITT charges $433 per credit hour. At that rate, a two-year associate's degree would cost you $41,568.
That's closer to what the University of Notre Dame charges ($66,820 for two years of tuition and fees, based on current rates) than to what Ivy Tech Community College of Indiana charges ($5,528 for a two-year degree).
Students heading to Indiana University-Purdue University Indianapolis would pay about $12,600 in tuition in fees for an associate's degree. Ball State University would charge $20,790.
"There's a tuition difference," Brown conceded. "But along with that comes benefits that some colleges with lower tuition may not be able to offer."
Brown said ITT has small classes, which make it easier to offer the courses students want when they want to take them. She added that many students comment that ITT's equipment and technology labs are more modern than what they've seen elsewhere.
ITT offers degrees in areas such as information technology, drafting and design, and health sciences. ITT Technical Institute operates in 33 states and has about 44,000 students, including roughly 2,100 in Indiana.
"I think they're helped by their curriculum," said Mark Hughes, an analyst with SunTrust Robinson Humphrey in Nashville, Tenn. He said students see bright futures in tech.
For-profit educators such as ITT also keep close tabs on students, calling students who miss class or reminding them its time to re-enroll. "For a lot of people, they need that little bit of a kick in the butt," Hughes said.
He said ITT also is an aggressive marketer, spending 16 to 17 percent of its revenue on advertising. Hughes also said community colleges are getting savvier in their own marketing.
In recent years, he added, "students are much more likely to be comparing schools over the Internet."
If so, more students may start asking, why so much?
Source: http://www.indystar.com/apps/pbcs.dll/a ... /20060925/ COLUMNISTS22/609250332
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