Jack Welch spent decades moving up the management ranks of General Electric Co. (NYSE: GE) to the point where, as CEO, he turned the firm into one of the great companies in the world. But he must have too much time on his hands. More than a decade after he became what many people regarded as the best chief executive in the world, he moved his executive education program — The Jack Welch Management Institute at Strayer University to the small online education firm, for $7 million. The only apparent attraction of the online university to students in his program is the legend of Jack Welch. The rest of the “team” that runs the operation are not well-known and have modest credentials.
Strayer was founded in 1892 as Strayer’s Business College. Currently, it is called Strayer University. Strayer offers a number of online programs, but it also has campuses in many parts of the eastern United States. Strayer does have several novel programs, the most unusual of which is the “Alumni Monthly Giveaway.” As Strayer describes it:
Starting in August 2012, the Office of Alumni Relations will hold a monthly giveaway to give alumni who have activated their online accounts and updated their profiles, a chance to win a special gift.
The winner of the giveaway will get “a $50.00 Gift Certificate to Staples for your back to school or office needs.” Quite a prize, and a clever way to get those “online accounts activated.”
Strayer’s stock is listed on Nasdaq under the symbol (NASDAQ: STRA). Revenues for the three months ended June 30, 2012, decreased 11% to $146.3 million. Net income was $21.2 million, compared to $29.6 million for the same period in 2011, a decrease of 28%. Despite the size of the company, which is relatively small, CEO Robert S. Silberman made more than $43 million between 2009 and 2011, according to the firm’s proxy. The sum is particularly impressive because Strayer’s shares traded for $253 in April 2010, but that number was just above $70 recently.
None of this is to say that there is anything wrong with Strayer, its business or management. It is just that Strayer is an odd place for one of the great CEOs of the past several decades to put his management school. What ever happened to Princeton, MIT and Yale?
Douglas A. McIntyre