Can stock options work in puglic schools?

Yes
Peggy Green:
Educators are stakeholders

Until quite recently, stock options were unheard of as compensation for educators. To me, stocks and the stock market were subjects for the nightly news, not something I paid much attention to. As an educator with two children, I have never managed to have excess dollars at the end of each month. I left stock investments to those who did have money to invest. This changed for me when, in October 1998, full-time staff at our school began to receive stock options as compensation.

Henry E. S. Reeves is a Miami public elementary school managed by the for-profit Edison Project in cooperation with the district and local union. Soon after joining the Edison school, I began serving on a committee composed of people from the United Teachers of Dade/AFT, Miami Dade County Public Schools, the Edison Project, and two teachers from Reeves whose job was to find ways to compensate staff for their hard work and dedication to students. The committee was formed to meet a part of the agreement among UTD, MDCPS and Edison.

Everyone was to come to the table with ideas of ways to compensate staff for their untiring efforts to improve student performance. My thoughts were directed toward gift certificates for a teacher and spouse for dinner, a workout room in the building, or maybe mini-grants that teachers could apply for. I was hoping not to be too bold with these ideas.

I needn't have worried! After everyone was seated, Pat Tornillo, executive vice president of UTD, stated early on that he wanted the committee to consider a stock option plan for teachers--making it clear right from the start that the plan would have to be approved by staff at the school. The idea was presented to the staff at Reeves, and they agreed.

At first, however, it seemed like Reeves' staff had difficulty thinking that what they did to help their students could be, or would be, connected to a financial reward. While talking about the idea of stock options, we understood that we were going to be given a piece of paper that might, or might not, be worth something someday. We understood that, once Edison went public with a stock offering, this compensation would be directly related to Edison's success--and also to our success as educators.

As a staff, we now have a financial stake in the success of Edison Schools. That is as it should be. If Edison is a for-profit company, certainly those people who contribute to its success should have a stake in it. And I can tell you that staff at Reeves are of one mind when it comes to our strategy for Edison success. Give each and every student in this building the highest-quality education possible. As I began to think about this even further, I realized that teachers may have a "victim" mentality. We are so used to being handed scraps; that is all we expect. Why else would I have thought only of gift certificates, dinners or a wellness room? If we are going to attract the best and the brightest into teaching, we must begin to think like professionals. Our students deserve no less.

No
Frank Wanner:
Good profits don't guarantee good schools

Perhaps we have heard for so long that education should be more like business that many of us are starting to believe it. Perhaps we have seen so many instances where employees starting out in the mailroom were able to become millionaires through the purchase of stock options, that we are coming to believe that teachers should have the same opportunity. I am sorry, but I just cannot agree.

To accept the idea of teachers in for-profit education systems purchasing stock options and profiting along with the corporation, one must first accept the idea of for-profit education--something that I cannot accept. I may be old-fashioned, but I still believe that, if there is to be a surplus in education, then that surplus should be returned to the system to improve the education of children, not taken as profit by investors, whether the investors be Wall Street venture capitalists or teachers from Duluth.

Although there are many instances in our economic system where profit plays a valuable role, there are other instances in which it really has no place. And there is little evidence to believe that there will ever be any profit in for-profit education.

When we talk about the purchase of stock options, what we are really talking about is compensation for teachers. It is most important that we first increase actual compensation for teachers to a level offered to other professionals.

Stock options are one way of bypassing what is, in fact, a basic issue. What perhaps we are actually looking at is a form of alternative compensation. Perhaps it is little more than yet-another merit pay scheme. Some may try to justify low teacher salaries on the basis of a promised profit through the exercise of stock options. The teacher would seem to be told: if you do well, the company will profit and you will share in those profits.

As yet there is little reason to believe that such a scheme would work and less reason to believe that it would be beneficial to students.

Earlier I stated that we have often been told that education should be more like big business. This is both impractical and undesirable.

Although there is a relationship between the needs of the consumer and the desires of business, they are not always congruent. If better education equals better profits, perhaps all the better. Yet the annals of business venture are full of instances where good profit did not equal good product. Didn't Ford Motor Company make a profit by selling its Pintos?

If teacher compensation is to be supplemented or exceeded by the exercise of stock options, then it may become all too easy for teachers to follow the lead of the education profiteers in doing whatever is necessary to enhance the corporation's bottom line even if it is at the expense of the educational bottom line.

Public education is special. It is a big business, but it isn't big business. If we are to represent teachers working in for-profit public education enterprises, let us represent them in the negotiation of good union contracts rather than the acceptance of possible profit from stock options.

American Federation of Teachers, AFL•CIO - 555 New Jersey Avenue, NW - Washington, DC 20001