Grand Canyon Education, a Delaware corporation with its principal executive offices located in Phoenix, AZ, provides online post-secondary education services in the United States. Grand Canyon is currently under investigation by the Department of Education and is named in a qui tam action for improperly paying enrollment counselors incentive compensation based on the number of students they sign up. The company recently announced a tentative settlement of the qui tam case, but the Department of Education has objected to the settlement.
There are eight directors, including two brothers who founded the Company. The Company’s proxy describes a contract with a company owned by the brothers’ father pursuant to which the father’s company “identifies qualified applicants for admission to Grand Canyon University in return for which it is a paid a stated percentage of the net revenue derived by [us] from those identified applicants that matriculate at Grand Canyon University.” The contract with the father's company appears, on its face, to be illegal under a statute that bans incentive compensation for enrollment counselors.
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