Kaplan pay plan raises practitioner hackles

remuneration/chief-executive/money-management/

10 August 2007
| By Liam Egan |

A plan by global education provider Kaplan to retain the stakeholder remuneration model employed by its new acquisition Finsia is meeting with resistance from some practitioners.

Its plan to retain the model was revealed during a national road show last month by Kaplan chief executive Warren Jacobson.

The road show represented the first opportunity for Kaplan to expound the virtues of its ownership to the stakeholders since the $36 million sale of Finsia’s training business assets.

It followed a majority approval vote from Finsia members in late June for the sale to Kaplan — despite an opposition campaign mobilised by some Finsia members.

An assertion by some practitioners, including Giles Gunesekera, that Kaplan wanted to retain the model in order to avoid paying practitioners commercial rates was rejected by Jacobson.

He told Money Management he was “committed to paying practitioners a commercial rate for the provision of services, and I have communicated as much”.

He added that it “is absolutely the case now that Finsia is paying what are, in the main, commercial rates to practitioners for their services”.

“Those commercial rates are applied equally by other higher education providers including, for example, the universities.

“There is always going to be variations on a case by case basis though, and where those ad hoc cases of variation arise, it is incumbent upon us to ensure practitioners are adequately compensated.

However, Gunesekera, who opposed the sale of Finsia to Kaplan, said the Kaplan model proposed at the road shows is “very much based on paying practitioners below-market rates”.

“As such, it is not receiving much positive feedback from among the hundreds of FINSIA practitioners, who in general are demanding to get paid market rates from Kaplan as a profit-based company.

“They were happy to get paid below market rates for their services when Finsia was a non-profit industry body, but, looking forward, it’s debateable whether that is going to happen as much.”

Gunesekera, who did not wish to publish his job title, emphasised that “a lot of practitioners are not at all motivated by the remuneration on offer in providing their teaching services to Finsia”.

“The fact of the matter, however, is that they will now be helping a public company to increase its profits, which has absolutely nothing to do with what we are about.”

Fellow practitioner John Livanas, who also did not wish to publish his job title, said his “sentiments have not changed in any way, shape or form in wanting to give something back to the industry”.

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