An e-Literate reader comments on my post about Blackboard owing Desire2Learn money:
The amount [that Blackboard will have to pay Desire2Learn, including the original award plus interest] will probably be over $3.8M USD from my rough estimates which is higher than the expected writedown Blackboard took. This should result in additional expenses that will have to be recorded by BBBB.
What’s also interesting is that Blackboard’s top execs made record bonuses before this writedown, at the same time they took away any salary increases and the 401K plans for the regular staff. I think that is the bigger story.
Blackboard reported a $2.8 million net profit in 2008. The $3.3 million write down brings them to a $500,000 loss. An additional estimated write-down of another half a million would bring them to a $1 million loss for 2008. In the same year, Michael Chasen received $545,833 in salary, $663,039 in bonus, $1,833,560 in stock options, $80,466 in shares of restricted stock, and $14,911 in “other compensation”, for total compensation that was valued at $3,137,809. Matt Small received $370,833 in salary, $166,544 in bonus, $722,966 in stock options, $40,233 in shares of restricted stock, and $17,372 in “other compensation”, for a total compensation of $1,317,958. Coincidentally, if you add up the 2008 bonuses for the five Blackboard executives listed in the company’s proxy statement, the total is $1,074,127—almost exactly what the company’s final adjusted net loss for 2008 may turn out to be.
Moving forward, Blackboard is apparently going to incur the additional expense of an attempt to appeal their failed patent suit to the Supreme Court, even though Matt Small is on record saying that it is highly unlikely they will succeed.
Michael Feldstein is the founder of e-Literate who currently works as the Senior Program Manager for MindTap at Cengage Learning. For more information, see his profile page.
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My thanks to Michael for his continued tracking of and reporting on this important issue. It is great that someone is shinning a light on this type of business practice.
I suppose the appeal allows them to delay booking the lost revenue.
So, essentially, Blackboard’s executive team is the source of the company’s loss last year. My OCD side is strangely pleased with the symmetry of that.
I really wish that the attitudes of the “rank and file” employees of Blackboard would somehow trickle up to senior management; it would be a whole different company.