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DeVry CEO holds down the for-profit fort

by Ashley Devick
April 25, 2013


Courtesy of DeVry Inc.

DeVry CEO Daniel Hamburger has helped the company weather the fury of legislators who want to cut funding for for-profit institutions like his.


Ashley Devick/MEDILL

DeVry is one of the largest for-profit education companies in the world and DeVry CEO Daniel Hamburger received far less in compensation than his peers.


Ashley Devick/MEDILL

DeVry CEO Hamburger earned $6.1 million in 2012.


Ashley Devick/MEDILL

DeVry's stock price has been on a downward trajectory. So has its CEO's compensation but Hamburger's pay hasn't declined at the same rate.



Ashley Devick/MEDILL

DeVry's CEO receives much of his compensation in stock options.   

It’s no secret among the investment community that the for-profit education sector has been struggling due to low enrollment and stringent government regulations related to high student loan default rates. Of the big companies, DeVry Inc. has managed to keep its head above water and stay out of the way of regulators and creditors.

And one man is responsible.

Chief Executive Officer Daniel Hamburger, 49, has been leading the charge by diversifying DeVry’s business and allocating the firm’s capital in ways that have attracted investors and earned DeVry a reputation as the sector’s golden child.

“He’s become more and more visible in the industry as time has gone by,” said William Blair analyst Brandon Dobry, who covers the for-profit education sector and has followed Hamburger’s career.

While DeVry and Hamburger were slower to react to some of market pressures than he would have liked, Dobry says Hamburger’s steady leadership has earned him visibility in the market.

“Because they haven’t gotten in trouble, he’s looked at from the industry as one of the good guys and is becoming one of the valuable spokesmen because no one can really poke holes in their regulatory or accreditation track record. That’s important,” Dobry said.

DeVry is one of the top three for-profit educators, operating under such names as the Keller Graduate School of Management, DeVry University, Chamberlain College of Nursing and Carrington College. The schools provide vocational degrees that are accessible to people with a wide range of income and skill levels.

Like most of the for-profit sector, the majority of DeVry’s revenues derive from federal financial aid for tuition. According to a U.S. Senate report, 77.5 percent of DeVry’s 2010 revenue came from Title IV programs.

When student loan default rates reached alarming levels, the government began to heavily regulate its funding of the for-profit education sector. Hamburger protested before a Senate committee hearing in 2011, arguing that funding should directly correlate to an institution’s ability to place people in jobs and improve the economy. Even so, DeVry adhered to the regulations.

Compared with its competitors, DeVry has a higher rate of student retention. About 59 percent of its online students withdrew from DeVry in 2008-2009. During that same time period, more than 66 percent of Apollo Global students had withdrawn.

But the lagging labor market and reduced enrollment continues to affect the entire for-profit segment, including DeVry. One reason is that tuition costs have risen faster than inflation.

On April 24 DeVry released its fiscal third-quarter results, which showed that for the 16th consecutive quarter, DeVry reported a decline in new undergraduate student enrollment at DeVry University, the company’s largest and most profitable segment. But enrollment at DeVry's Carrington College and Chamberlain College of Nursing were up, a sign that interest in vocational jobs are increasing.

“While DeVry is a very high-quality company with limited regulatory risk and a strong debt-free balance sheet, we can’t make the case for a quick rebound, given internal challenges at DeVry undergrad and the obvious uncertainty in the sector,” said Barrington Research analyst Alexander Paris.

Despite the woes of his industry, Hamburger seems to be focused on investing in growing segments while improving job placement rates for graduates.

As the father of three, his reputation and commitment to education extends beyond his day job.

Hamburger and his wife Denise recently donated hundreds of books to set up a library in the Johnson College Prep charter school in Englewood in conjunction with their affiliation with the Glencoe Family Partnership.

“It’s been through leading DeVry that I’ve truly understood how integral education is to our nation’s and our world’s future,” Hamburger said to attendees at the Dec. 3 award dinner.

“I see the impact all the time in the work we do. Students’ lives are transformed not just by the new skills they learn, but by the opportunities education gives them to grow and to become a productive part of our nation’s civic life,” Hamburger said.

He also was recently presented with the Anti-Defamation League’s prestigious Torch of Liberty award, which acknowledges individuals or organizations especially dedicated to promoting equality.

Hamburger is on the boards of America’s Promise Alliance and World Business Chicago. He also is personally involved with New Schools for Chicago.

“He gives both his time and resources to organizations that are related to education whether it’s his commitment to America’s Promise Alliance and their efforts to increase high school graduation rates or his support of the Anti-Defamation League and their efforts to combat bigotry,” said Ernest Gibble, vice president of the DeVry Foundation. He is focused on organizations that empower people to learn and to grow.”