Ron Packard

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K12 Inc. CEO, Ron Packard
(Source:K12)

Ronald J. Packard is the CEO of K12 Inc., a $848.2 million for-profit online school company headquartered in Herndon, Virginia. From 2009 to 2013, Packard received compensation of over $19.48 million from the company.[1] In 2013, he owned over 2 percent of K12,[2] which had a market cap of around $1.25 billion in September 2013.[3]

Ronald J. Packard has been K12's CEO or executive chairman since 2000.[4] He co-founded K12 with former Reagan education secretary William J. Bennett in 2000 after they secured an initial $10 million investment from his boss at Knowledge Learning and convicted junk bond king Michael Milken. The duo also received financial support from Larry Ellison of Oracle.[5]

He also closed a $20 million venture capital funding drive for K12 in 2003 with Constellation Ventures,[6] an affiliate of Bear Stearns Asset Management, [7] one of the Bear Stearns internal hedge funds that blew up in 2007[8] and contributed to the need for a government-backed bailout of the investment bank by JP Morgan.[9] Packard has also teamed up with investment banker Michael Moe, who helped take K12 public.[10] According to The Nation, "Moe has worked for almost fifteen years at converting the K-12 education system into a cash cow for Wall Street."[11]

Packard, born in 1963, grew up in Thousand Oaks, California, the son of a radar and weapon systems engineer for Hughes Aircraft, where he worked as a summer engineer.[12] He then worked in the mergers and acquisitions operation of Goldman Sachs from 1986 to 1988, and at McKinsey and Company from 1989 to 1993.[13] After leaving McKinsey, Packard went to Chile to work on getting government permits for some investors who had "bought title to a large forest."[12] He was then picked up by Milken’s education investment holding firm, Knowledge Universe Learning Group, which appointed him partner, vice president and chief executive (1997-2000);[14] and then by Knowledge Schools, a chain of preschools.[15] Packard also served as a director at LearnNow Inc. (which was bought out by Edison in 2001), and Academy 123 Inc. (2004-2006; now owned by Discovery Communications).[16]

Packard was a defendant in a 2012-2013 securities class action suit over his alleged misstatements to investors on student achievement at K12 schools.[17] The suit claimed that Packard and the company boosted K12's enrollment and revenues through "fraudulent devices, schemes, artifices and deceptive acts, practices, and course of business includ[ing] the knowing and/or reckless suppression and concealment of information regarding K12's excessive churn rates, the poor academic performance of its schools compared with brick and mortar schools, improper practices at several of its schools nation-wide, and enrollment inflation."[18] In March 2013, the parties agreed to settle the suit in return for a payment of $6.75 million by K12's insurance carriers, and the lead plaintiff agreed to withdraw his accusations.[19] The settlement was approved by the court on July 25, 2013.[20]

Packard has agitated for the adoption of online schools for over a decade, including by addressing a "standing room only crowd" of the American Legislative Exchange Council's Education Task Force in December 2002.[21] Packard was flanked at the talk by Jeanne Allen from the Center for Education Reform, who has continued to defend K12 from evidence that it lags behind traditional public schools.[22]

Packard is also a member of Digital Learning Council,[23] a project of Jeb Bush's Foundation for Excellence in Education, which is funded by leading pro-school privatization interests such as the Broad, Gates and Walton Foundations.[24] Bush has said that promoting digital learning, Packard's bread and butter, is at the top of his education reform list because of its capacity "to disrupt the public education system."[25]

According to The Wall Street Journal, "a large part of Mr. Packard's job is dealing with political issues."[26] "We understand the politics of education pretty well," Packard has told investors.[27] He has called lobbying a "core competency" at K12 Inc.,[28] and was himself listed as a registered lobbyist to the New York City government from 2007 to 2010.[29] The New York Times has called for-profit education companies "a lobbying juggernaut in state capitals."[28]

Packard has also dabbled in electoral politics, serving in 2004 on the finance committee for Illinois Senate candidate Jack Ryan (along with William Bennett and then-Goldman Sachs CEO Henry Paulson),[30] a former Goldman Sachs banker who ran against Barack Obama before withdrawing his candidacy after damaging allegations surfaced.[31] Packard and K12's public affairs director Bryan W. Flood also donated to the 2006 campaign of Wisconsin state assembly education chair Rep. Brett Davis (R), who authored a bill benefitting Wisconsin virtual schools, including K12.[32]

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References

  1. Morningstar, “K12 Inc., 2013 Executive Compensation, Ronald J. Packard/Chief Executive Officer,” figures for 2009-2013, accessed November 19, 2013.
  2. K12 Inc., 2013 DEF 14A Proxy Statement, SEC filing, October 28, 2013, p. 16.
  3. K12 Inc. Overview, Market Cap," Wall Street Journal MarketWatch, accessed September 23, 2013.
  4. "Ronald Packard: At a Glance," Forbes, accessed September 17, 2013
  5. Daniel Golden, "Former Secretary of Education Plans School on Internet," The Wall Street Journal, December 28, 2000, accessed September 17, 2013.
  6. "In Brief," The Washington Post, April 4, 2003, accessed September 4, 2013.
  7. Ty McMahan, "Constellation Ventures Stays Course After Bear Stearns Meltdown," The Wall Street Journal, May 4, 2009, accessed September 4, 2013.
  8. Kate Kelly, Liam Pleven and James R. Hagerty, "Wall Street, Bear Stearns Hit Again By Investors Fleeing Mortgage Sector," The Wall Street Journal, August 1, 2007, accessed September 12, 2013.
  9. William D. Cohan, House of Cards: A Tale of Hubris and Wretched Excess on Wall Street (New York: Doubleday, 2009).
  10. John Hechinger, "Education According to Mike Milken,” Bloomberg BusinessWeek, June 2, 2011, accessed September 19, 2013.
  11. Lee Fang, "How Online Learning Companies Bought America's Schools," The Nation, November 16, 2011, accessed September 9, 2013.
  12. 12.0 12.1 Srana Mitra, “A Scalable K-12 Education Solution: K12 CEO Ron Packard (Part 1)," interview with Ron Packard, November 18, 2009, accessed September 12, 2013.
  13. Marquis Biographies Online, "Profile Detail: Ronald J. Packard," accessed September 10, 2013.
  14. Daniel Golden, "Former Secretary of Education Plans School on Internet," The Wall Street Journal, December 28, 2000, accessed September 17, 2013.
  15. "Ronald Packard," bio at the Chicago Booth School's “Distinguished Alumni Awards” website, accessed September 12, 2013.
  16. "Executive Profile: Ronald J. Packard CFA," Bloomberg BusinessWeek, accessed September 12, 2013.
  17. Emma Brown, "Shareholder Lawsuit Accuses K12 Inc. of Misleading Investors," The Washington Post, January 31, 2012, accessed September 19, 2013.
  18. United States District Court for the Eastern District of Virginia, Hoppaugh v. K12, Inc., Case No. 1:12-CV-103-CMH-IDD, pp. 104-105., accessed September 17, 2013.
  19. Kristin Jones, "[1] K12 Agrees to $6.75 Million Payment to Settle Disclosure Suit]," The Wall Street Journal, March 4, 2013, accessed September 11, 2013.
  20. Labaton Sucharow, "[2] In re K12 Inc. Securities Litigation]," accessed September 11, 2013.
  21. American Legislative Exchange Council, "Education Task Force," organizational web page, archived by the "WayBack Machine" September 28, 2006.
  22. Jeanne Allen, "Here They Go Again…," Center for Education Reform website, accessed September 6, 2013.
  23. Digital Learning Now (a project of the Foundation for Excellence in Education), "Digital Learning Council," organizational website, accessed September 9, 2013.
  24. Foundation For Excellence in Education, "Meet Our Donors," organizational website, accessed September 9, 2013.
  25. Nick Gillespie, “Jeb Bush on Disrupting the Educational Status Quo," Reason magazine, May 2011, accessed September 9, 2013.
  26. Veronica Dagher, "Virtual School Chalks Up Gains," The Wall Street Journal, November 5, 2008, accessed September 10, 2013.
  27. Lyndsey Layton and Emma Brown, "Virtual Schools Are Multiplying, But Some Question Their Educational Value," The Washington Post, November 26, 2011, accessed September 10, 2013.
  28. 28.0 28.1 Stephanie Saul, "Profits and Questions at Online Charter Schools," The New York Times, December 12, 2011, accessed September 10, 2013.
  29. New York City, "NYC Lobbyist Search: Information for Ronald Packard," accessed September 20, 2013.
  30. Jack Ryan for U.S. Senate, Inc., "Jack Ryan Announces Finance Committee," press release, July 15, 2004.
  31. Liam Ford and Rudolph Bush, "Ryan Quits Race: State GOP Scrambles to Find Replacement to Face Obama -- Republican Senate Nominee Cites Fixation On Divorce Files," Chicago Tribune, June 26, 2004, accessed September 12, 2013.
  32. One Wisconsin Now, "K12, Inc. Support for Davis Paying Off," press release, January 15, 2008.