Investors delivered a strong censure to the country's largest online charter school operator at its annual meeting Wednesday, voting down its plan for executive pay.
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.
K12 confirmed its pay proposal had been voted down, but declined to comment further.
Investors weren't the only ones voicing discontent Wednesday: outside the shareholder meeting in Washington D.C. a throng of protestors from national teachers' unions, along with representatives from a school operated by K12, marched and chanted. Protestors accused one of the company's largest school networks, the California Virtual Academies, of failing its 15,000 students.
In the wake of a report earlier this year which found students at online schools lost out on a full year's worth of learning, both sides of the education debate openly criticized the schools. Groups that typically stand behind charter schools and their expansion said they were disconcerted and unhappy with how online schools had served their students.