With Revenue Down, ACT’s CEO Exits

On May 28, 2020, ACT announced a “leadership change” involving the departure of CEO Marten Roorda, who will be replaced by ACT’s chief operating officer (COO), Janet Godwin:

IOWA CITY, Iowa—ACT, the nonprofit organization that develops and delivers the ACT test, announced today a change in leadership and a series of cost-cutting measures to enable it to continue to serve students into the future, despite the current negative business impact of COVID-19.

CEO Marten Roorda is leaving ACT, with Chief Operating Officer Janet Godwin selected to serve as interim chief executive officer. Godwin is a 30-year veteran of ACT, with a distinguished record of personal and professional dedication to helping students achieve education success.

Leadership Change

Janet Godwin will succeed Marten Roorda, who arrived at ACT in 2015 after serving as CEO of Cito, a major testing organization in the Netherlands. During Roorda’s ACT tenure he broadened the nonprofit’s scope to include learning, measurement and navigation, increasing the impact of ACT’s mission of “Helping people achieve education and workplace success.”

Godwin, who was appointed interim CEO, began her ACT career in 1990. Over the past three decades she has held progressively responsible positions in test development, information technology, and client engagement, as well as senior-level positions including vice president of operations, chief of staff, and chief operating officer, her current post that she has held for nearly six years. She has also served on a number of volunteer boards, including the Iowa City school board, which she currently leads as president.

“Janet has made tremendous contributions to ACT,” said Chad Wick, chair of the ACT Board of Directors. “The ACT Board of Directors knows Janet very well, appreciates her deep and abiding commitment to the many organizations and millions of people ACT serves each year, and has high confidence in her ability to step in and provide outstanding leadership in this role.”

In the same annoncement, ACT notes that it is cutting costs in the face of revenue losses related to COVID-19:

Cost-Cutting Measures

ACT postponed its April 2020 national test date out of concern for the safety of students and those administering the test, and also saw a significant decline in its state and district testing programs. While ACT will continue to offer testing in June and July, it will do so with fewer open test centers and social distancing practices reducing test centers’ capacities.

Furthering its commitment and mission to serve learners, ACT is working with open test centers to offer summer testing opportunities. For registered students who are unable or choose not to test, it is providing free test date changes to future test dates or refunds of registration fees.

ACT’s cost-cutting measures include voluntary options for its team members to reduce their work hours, take leaves of absence, or voluntarily resign and receive severance pay. In addition, the organization announced there would be no raises next year and some fringe benefits would be reduced. Beyond the steps announced Thursday, further cost reductions are expected.

According to ACT’s 2017-18 tax filing, CEO Roorda was paid $1.1M in total compensation, up from $847K the previous year.

Also under Roorda, based on ACT’s latest tax filings, ACT’s total revenue dropped for two consecutive years, pre-COVID:

ACT’s Total Revenue (2009-10 to 2017-18):

• 2009-10:  $274M
• 2010-11:  $293M
• 2011-12:  $303M
• 2012-13:  $317M
• 2013-14:  $329M
• 2014-15:  $349M
• 2015-16:  $357M
• 2016-17:  $353M
• 2017-18:  $349M

Most of ACT’s revenue derives from educational assessment– and in 2017-18, that revenue landed below what they were in 2014-15:

ACT’s Total Revenue Generated from Educational Assessment (2010-11 to 2017-18):

• 2010-11:  $228M
• 2011-12:  $242M
• 2012-13:  $258M
• 2013-14:  $284M
• 2014-15:  $311M
• 2015-16:  $315M
• 2016-17:  $306M
• 2017-18:  $286M

Sooo, prior to revenue losses due to COVID, revenue for nonprofit ACT was already down under Roorda’s leadership. However, ACT pays numerous executives salaries ranging from $300K to $500K, including Roorda’s replacement, Janet Godwin, whose total compensation in 2017-18 was $421K.

And then there are the board members.

Chad Wick, who chairs nonprofit ACT’s board of directors, made $59K in 2017-18 for working six hours a week. However, Wick apparently did take a pay cut: In 2016-17, he was paid $61K for working three hours a week.

And Wick is far from alone. Many of ACT’s directors work 2 to 4 hours a week and easily clear a teacher’s salary ($45K, $48K, $52K, $57K….).

Not feeling at all sorry for testing nonprofit ACT.

_________________________________________________________________

My latest book, A Practical Guide to Digital Research: Getting the Facts and Rejecting the Lies, is now available for purchase on Amazon and via Garn Press!

Follow me on Twitter @deutsch29blog