Amid struggles, top fiscal executive to leave EDMC

Career College Central Summary:

  • A top fiscal officer hired by Education Management Corp. a year ago has resigned as the beleaguered operator of for-profit colleges continues to fight a swell of financial and legal problems that threaten its business.
  • EDMC disclosed late Monday that Robert Hrivnak, controller and chief accounting officer, will step down Friday. He is the first executive to depart since EDMC reached a deal with creditors to convert $1.1 billion in debt into a majority ownership stake.
  • Hrivnak had a broad range of financial responsibilities. His resignation was announced days after the company filed a month-overdue financial statement with regulators that showed a $664 million loss for the 2014 fiscal year amid a continued decline in enrollments. The Nasdaq Stock Market had threatened to delist the company's stock because of the filing delay.
  • The stock plunged to $1.18 from $16.94 a share in the past year amid its struggles. EDMC spokesman Chris Hardman said the late filing had nothing to do with Hrivnak's departure.
  • “(Hrivnak's resignation) was unexpected to us, but he found another job in a different part of the country,” Hardman said, declining to say where Hrivnak would be working. “We certainly appreciate all his efforts during his time at EDMC, and we wish him well.”
  • Hrivnak, 54, submitted his resignation Oct. 15, almost a year to the day since his hiring was announced.
  • He had an annual salary of $287,000, and his employment contract made him eligible for a performance bonus equal to 40 percent of his base salary, or $114,800, according to regulatory filings. The contract said he would get his full bonus for fiscal year 2014.

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