No "Pay for Performance" at Testing Companies

University Testing

Their flagship products, such as the SAT and PRAXIS, are under increasing criticism in the media and the courtroom (see stories, this issue) for poor quality control. But top managers at the College Board and the Educational Testing Service (ETS) continue to reap ever-higher salaries, according to the most recent annual reports filed by the firms with the Internal Revenue Service.


For the tax year ending June 30, 2004, College Board president Gaston Caperton received $547,654 in salary plus benefits and deferred compensation valued at $35,611. In addition, he had access to an expense account worth $110,000. Though very high for a "non-profit" organization, Caperton's pay package paled in comparison with his ETS counterpart, president Kurt Landgraf, who posted a base salary of $868,750, benefits of $54,496 and an expense account of $144,569.


Other executives at both organizations also were paid very well. Twenty-eight College Board employees held the title of vice president. Seven had compensation packages in excess of $300,000 for the year, and 13 more went over the $200,000 annual level. Again, ETS paid even better. Total compensation for Senior Vice President & Chief Financial Officer Frank Gatti and Chief Information & Strategy Office Arthur Chisholm each topped $500,000. Twenty-two vice presidents are listed, all with annual pay of topping $200,000. All told, more than 1650 ETS employees were paid over $50,000 for the year.


These generous salaries are largely drawn from test-takers fees. For the 2003-2004 tax year the College Board took in $426 million and spent $392 million, leaving a tidy "un-profit" of more than $33 million. As of June 30, 2004 the Board held net assets of $230 million. During the same period ETS had revenues of $747 million and expenses of $732 million, adding to an existing surplus to produce a fund balance of $204 million.