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Topic: Stock Options for Teachers in Their Schools
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Jerry P. Becker

Posts: 16,576
Registered: 12/3/04
Stock Options for Teachers in Their Schools
Posted: Nov 6, 1998 11:16 PM
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USA Today; Arlington; October 22, 1998; Section D, p. 10

Taking stock in schools appeals to many

by Tamara Henry


The education community is cautiously watching what some see as a bold move
by the for-profit Edison Project to offer a stock options plan for teachers
at the 51 schools it manages.

The Miami-Dade County Public Schools and the United Teachers of Dade
support the plan, which makes its first offer to the 90 teachers and staff
at the Henry S. Reeves Elementary School in Miami.

Pat Tornillo, vice president of the Miami union, an affiliate of the
American Federation of Teachers (AFT), says history is made when teachers
become "direct economic stakeholders in the public schools where they work."

Michael Moe , a managing director at Merrill Lynch, says the program "has
the potential to be the most significant increase in educator compensation

Edison's CEO Benno C. Schmidt Jr. says the plan creates a "constructive
partnership with local unions, school districts and charter boards that we
are committed to. Since the success of Edison depends to a great extent on
our partners, we want to make sure to share our success with them."

However, AFT President Sandra Feldman is withholding judgment: "This is
such a brand-new thing. We are going to wait and see."

Bob Chase, president of the National Education Association, the nation's
largest teachers union, is concerned that the principal would have nearly
twice the level of potential return as lead teachers, with regular
teachers' level of return close to half that of lead teachers. Chase says
the differentiation could weaken the "real collaboration and joint
ownership" of schools.

Also, Chase says that while the program is "an unusual step, it is a
limited step."

Christopher Cross, president of the Council of Basic Education, admits "we
need to look at new ways to compensate teachers in schools. If it results
in better teaching and learning, I'm all for it."

But, he adds, the "evaluation must be based on student achievement, not on
factors that relate to how much money is saved." For-profit companies often
boost profits by cutting costs, he says. "There needs to be a balance with
the quality of the product."

Edison CEO Chris Whittle says increased compensation will simply be tied to
the performance of the company's stock, which will go up only if teachers
prove they can boost academic achievement.

"Until now, education has been one of the few sectors in the U.S. economy
where the people doing the front-line work were not in a position to reap
rewards from the enterprise's success, which in the case of schools is
improved student performance," Whittle says. "We want to help change that."

Edison invested nearly $40 million in research and development before it
opened its first four schools in 1991 with the goal of blending capitalism
with a quality, cost-effective education. Since then, the company has
raised $161 million in private capital.

To date, efforts by states and school districts to use financial rewards to
boost public school achievement have been limited. Among them:

* The Baltimore mayor's office tries to lure good teachers and other city
employees by offering low-interest loans to buy homes.

* The Georgia Board of Education offers teachers in a record 155 schools
$2,000 merit bonuses for helping their students meet academic goals.

* Columbus, Ohio, offers a "gains-sharing program" in which teachers and
staff at each school building work to meet both academic and non-academic
goals. All the efforts are evaluated against prescribed standards, with
successful teachers getting up to a $500 bonus.

Reeves principal Diane Paschal describes the "incredible ownership in this
program already" and stressed the entire school community benefits. "We're
motivated. We've been working day and night to make a difference for
children. We're already seeing results in the classroom. This adds a
financial reward to the people who are most responsible for raising student
performance -- our teachers and staff."

In the two years since it has opened, Reeves Elementary has grown from a
little more than 1,000 to nearly 1,200 students, with most of them
low-income blacks or Hispanics.

Paschal attributes the enrollment growth to a transfer of students from
private schools to Edison's "ambitious and wide-ranging curriculum,
pervasive use of technology -- including a computer on every teacher's desk
and in the home of every student in grades three and up, an extended school
day and school year, and an organization that allows teams of teachers to
work with the same students over several years."

The staff recently voted on whether to participate in the program after
months of intense negotiations.

Barbara Raeburn, a reading coordinator who played a key role in the
negotiations, says the biggest hurdle was "educating the teachers about
what stock options were all about."

"I was terribly excited at the prospect of the entire field of education
going into this realm," Raeburn says. "It really professionalizes Edison's
pursuit for the teachers. It's really something very, very special that's
being offered to us."

"The key benefit would be a better product," she adds.

"None of it's going to matter unless you succeed in getting students to
achieve at a higher level."
PHOTO, B/W, Alan Diaz, AP; Caption: Exercising her options: Barbara Raeburn
reads a
story to second-grade pupils at Reeves Elementary School in Miami, where
teachers have
been reading the fine print about stock options.
Jerry P. Becker
Dept. of Curriculum & Instruction
Southern Illinois University
Carbondale, IL 62901-4610 USA
Fax: (618)453-4244
Phone: (618)453-4241 (office)

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