WHEATON, Ill. (CN) - For-profit chain college DeVry gave its CEO 160,000 more stock options than its shareholders agreed to, a shareholder claims in a derivative complaint.
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Milton Pfeiffer sued CEO Daniel Hamburger and 12 other directors on behalf of DeVry Inc., in DuPage County Court.
DeVry has been sued in several other shareholder derivative complaints, accused of propping up its share price by concealing illegal student recruitment practices and deceptive financial aid packages.
The chain college is one of many that came under public scrutiny after a congressional investigation found that virtually every profit-seeking chain college investigated used deceptive and/or illegal tactics to recruit students, in pursuit of their government-backed financial aid.
DeVry's market cap dropped almost 50 percent after the government investigated its operations, according to a previous class action.
DeVry has more than 95 outlets nationwide, and "almost all of (its) degree programs are also offered online so you can study from anywhere at anytime," according to the company website.
In the new complaint, Pfeiffer claims DeVry's of Directors "exceed(ed) its authority under the company's shareholder-approved Incentive Plan of 2005 by granting Daniel Hamburger, the Company's Chief Executive Officer and a director, stock options in excess of the 150,000 stock options permitted to be granted to any individual participant in one calendar year under the Incentive Plan."
Pfeiffer adds, "in 2010, 2011, and 2012, the Board granted Hamburger 184,100, 170,200, and 255,425 stock options, respectively, pursuant to the Incentive Plan, thereby exceeding the 150,000 per-year limit each year."
Pfeiffer seeks rescission of the 159,725 excess options given to Hamburger, and damages for breach of fiduciary duty, waste of corporate assets, and unjust enrichment.
He is represented by Vincent DiTommaso, with DiTommaso & Lubin, of Oakbrook Terrance.
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