John Kline
PERDOCEO EDUCATIONAbout John Kline
John R. Kline is Senior Vice President—American InterContinental University System (AIUS) at Perdoceo Education Corporation, serving in this role since October 19, 2015; he also serves as Chancellor of the AIU System (2025 proxy) and previously as President of AIU System (2024 proxy) . He is 61 years old (as of March 28, 2024) and holds a Bachelor of Science in accounting from Arizona State University . Company operating performance used for incentive pay has been strong: 2023 revenue increased 2.1% ($14.8 million) and operating income rose to $150.4 million from $129.6 million, and 2024 Adjusted Operating Income (AIP AOI) outperformed target ($194.6 million vs. $166.0 million), driving maximum AIP payouts (200%) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Education Management Corporation (EDMC) | SVP Operations; President, Online Higher Education Division; SVP Student Acquisition & Retention | 2009–2013 (President: Jul 2009–Jan 2013; SVP Ops: Jul 2011–Dec 2013; SVP SAR: Apr 2009–Jul 2009) | Led online division and operations; focused on acquisition, retention and operating execution in large U.S. education company |
| Nelnet Enrollment Solutions | Chief Executive Officer | Oct 2007–Apr 2009 | Provided marketing, recruiting and retention solutions to higher education institutions |
| University of Phoenix / Apollo Group | Chief Administrative Officer; prior roles of increasing responsibility | 1996–2007 (CAO: Feb 2006–Oct 2007) | Enterprise operations and administration across a scaled online education leader |
External Roles
No public-company directorships or external board roles disclosed in the proxy for Kline .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $370,260 | $385,688 | $390,717; increased to $400,436 effective Nov 1, 2024 |
| Target Bonus (% of Salary, AIP) | 65% | 65% | 65% |
| Actual Bonus Paid ($) | — (none disclosed) | $77,755 (broad-based one-time retention payment) | $120,335 (includes 50% of $240,670 retention award paid Mar 14, 2024; remaining 50% paid Mar 14, 2025) |
Performance Compensation
Annual Incentive Plan (AIP) – Structure and Results
| Component | Weighting | FY 2023 Target | FY 2023 Actual | FY 2023 Payout | FY 2024 Target | FY 2024 Actual | FY 2024 Payout |
|---|---|---|---|---|---|---|---|
| Adjusted Operating Income (AOI) | 80% | $163.0 million | $199.2 million | 200% | $166.0 million | $194.6 million | 200% |
| Individual Goals | 20% | Defined by role | Achieved (CEO-set, capped at financial) | 200% | Defined by role | Achieved (aligned to student outcomes, compliance, efficiency) | 200% |
| Kline AIP Target Value ($000s) | $252.7 | — | — | $252.7 | — | — | $252.7 |
| Kline AIP Payout ($000s) | — | — | $501.4 | — | — | $507.9 | — |
Notes: AIP AOI excludes depreciation, amortization, certain legal expenses, and approved plan adjustments .
Long-Term Incentive (LTI) – RSUs and PSUs
| Award Type | Grant Date | FY 2023 Grant (#) | FY 2023 Grant-Date Fair Value ($) | FY 2024 Grant (#) | FY 2024 Grant-Date Fair Value ($) | Vesting / Performance |
|---|---|---|---|---|---|---|
| Time-based RSUs | 03/07/23 | 16,924 | $231,859 | 13,635 | $238,067 | 25% annually over 4 years, stock-settled |
| Performance-based RSUs (PSUs) | 03/07/23 | 16,926 | $231,886 | 13,635 | $238,067 | Cliff vest after 3 years; AOI-based: 0%–200% with two-year AOI hurdle and third-year threshold |
Dividend equivalents accrue on unvested RSUs/PSUs beginning Q3 2023; Kline received $13,141 in 2024 dividend equivalents upon vesting .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 74,454 shares as of March 28, 2025; less than 1% of outstanding |
| Stock Options | 24,148 exercisable (grant 03/06/18, strike $13.80, expire 03/06/2028) |
| Unvested Time-based RSUs (12/31/2024) | 13,635 (03/07/24), 12,693 (03/07/23), 10,814 (03/08/22), 3,255 (03/08/21) |
| Unearned PSUs (12/31/2024) | 13,635 (2024 grant), 33,852 (2023 grant), 43,256 (2022 grant) |
| Market Value of Unvested RSUs/PSUs | Time-based RSUs: $360,918 (2024 grant), $335,984 (2023), $286,247 (2022), $86,160 (2021); PSUs: $360,918 (2024 grant), $896,062 (2023), $1,144,986 (2022); values at $26.47 close on 12/31/2024 |
| Ownership Guidelines | SVPs: 1.5× base salary; retain 50% of net shares until compliance; all designated officers in compliance at last measurement |
| Hedging/Pledging | Prohibited (short-term trading, margin, short sales, pledging, derivatives), with limited Board discretion for certain entities |
| Clawback | “No-fault” SEC/Nasdaq-compliant clawback adopted Dec 1, 2023; covers incentive comp tied to financial reporting metrics upon restatement |
Employment Terms
| Scenario (as of 12/31/2024) | Lump-Sum Severance | RSU Vesting Value | COBRA | Outplacement | Total |
|---|---|---|---|---|---|
| Voluntary Termination | $0 | $0 | $0 | $0 | $0 |
| Normal Retirement | $0 | $0 | $0 | $0 | $0 |
| Involuntary Not for Cause | $654,402 | $0 | $22,592 | $7,500 | $684,494 |
| Death or Disability | $0 | $2,450,751 | $0 | $0 | $2,450,751 |
| For Cause Termination | $0 | $0 | $0 | $0 | $0 |
| Change in Control + Involuntary Termination | $654,402; PSUs deemed at target | $2,450,751 | $22,592 | $7,500 | $3,135,245 |
- Severance Plan: Lump sum equals annual salary plus target AIP bonus; requires release and a non-compete/non-solicit/confidentiality agreement lasting at least one year; partially subsidized COBRA for one year; outplacement support; intended to be Section 409A-compliant/exempt .
- Equity acceleration under the 2016 Plan is “double-trigger” (change-in-control plus involuntary termination); PSUs vest at target-level .
- LTI awards include one- or two-year post-termination covenants (non-solicit, non-disclosure, non-compete) .
Performance & Track Record
- Incentive alignment to AOI has produced maximum AIP payouts for NEOs in 2023 and 2024 on overachievement vs operating plan (AIP AOI 2023: $199.2m; 2024: $194.6m) .
- Company-level 2023 revenue and operating income improved (revenue +2.1%; operating income $150.4m), supported by retention and engagement improvements, though AIUS saw enrollment declines during regulatory changes in 2023 .
Compensation Structure Analysis
- Mix emphasizes at-risk pay: capped AIP with 80% AOI/20% individual goals and 50/50 RSU–PSU LTI, with PSUs cliff-vesting and range 0%–200% .
- Retention incentives: 2023 additional retention bonus for Kline ($240,670; paid 50% on Mar 14, 2024 and 50% on Mar 14, 2025) .
- No option repricings; options priced at grant; minimum one-year vesting for equity; dividends accrue as equivalents on unvested RSUs/PSUs since Q3 2023 .
Compensation Peer Group & Say‑on‑Pay
- Peer group used for 2023 decisions includes sector and comparable services firms; pay positioned around market median ranges with size-adjusted survey blending .
- Say-on-Pay approval ~98% at 2023 annual meeting; ongoing investor outreach reflected broad support for program design .
Expertise & Qualifications
- 25+ years of leadership across scaled online education (Apollo/University of Phoenix, EDMC), student acquisition/retention, operations, and education services; BS in accounting, Arizona State University .
Equity Vesting Schedule Snapshot (Kline)
| Award | Next Vest Dates |
|---|---|
| 2024 RSUs | 25% on each Mar 14, 2025–2027 (plus 2028; per 4-year schedule) |
| 2023 RSUs | 25% each Mar 14, 2024–2027 |
| 2022 RSUs | 33% each Mar 14, 2024–2026 |
| 2021 RSUs | 50% each Mar 14, 2024–2025 |
| 2023 PSUs | Cliff vest Mar 14, 2026 at 0%–200% subject to AOI goals |
| 2024 PSUs | Cliff vest after 3 years at 0%–200% subject to AOI goals |
Investment Implications
- Strong pay-for-performance alignment: AOI-driven AIP and AOI-based PSUs have paid/vested at or above target on sustained operating outperformance; expect sensitivity of cash/equity payouts to AOI trends .
- Retention risk mitigated by layered RSU/PSU schedules and severance protections; double-trigger equity acceleration limits windfall risk absent termination with change-in-control .
- Alignment safeguards: ownership guidelines (SVP 1.5× salary, retention of net shares), clawback, and prohibition on hedging/pledging support shareholder-friendly governance and reduce misalignment risk .
- Potential selling pressure windows include annual RSU vesting dates (Mar 14) and legacy in-the-money options expiring 2028; subject to insider trading policy windows and ownership retention ratios .