This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.
Throughout its history, Edison Schools Inc., the company that took over management of 20 Philadelphia schools last fall, has boasted about its rapid growth. But for the first time this September, Edison opens a school year with a marked decline in the number of students and schools under its management.
While the company retained its contract in Philadelphia, contract cancellations nationally have resulted in a decline in Edison’s student enrollment from 80,000 to "approximately 70,000," according to an Edison spokesperson. The company now reports that it manages 102 schools nationally, about 10 fewer than last year.
Hit by public criticism, heavy losses, and a sagging stock price, the company detailed its plans in August for taking the company private. Edison shareholders would receive $1.76 per share in a deal financed by Liberty Partners, a private equity firm. Edison’s top executives would retain their posts after the proposed buyout.
The company’s stated reasons for the deal refer to fallout from a low stock price, which hindered its ability to raise money, and "the perception of school districts, charter schools and others that Edison’s stock price was indicative of its ability to perform its obligations." As a company traded on the stock market, Edison’s finances are now open to public scrutiny because regular quarterly filings are required by law. The same disclosures are not required of private companies.
Despite the company’s troubles, Edison CEO Chris Whittle did well for himself in the buyout agreement, which promises him an annual salary "not less than $600,000" – a raise of more than a quarter of a million dollars. Bonuses could further boost his earnings by as much as 275 percent.