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Parents advocate for furloughed teachers; Bright Horizons executives take pay cuts

At Bright Horizons in Hingham, children tried out a new tablet computer in 2018.
At Bright Horizons in Hingham, children tried out a new tablet computer in 2018.John Tlumacki/Globe Staff/file

After their children’s preschool was closed to the threat of coronavirus, a group of Boston mothers began doing what mothers do: volunteering to help the teachers. One proposed launching a GoFundMe page to raise money for the staff whose already meager salaries — $18 or $20 an hour — would be cut off by furloughs.

Then one of them challenged the premise: Why did this job, too, fall to working mothers? Why not push the school to take care of its teachers?

Their school, after all, is not funded by taxpayers or charitable donations. It’s run by Bright Horizons Family Solutions Inc., a for-profit, publicly traded corporation founded in part by Bain Capital. Bright Horizons CEO Stephen H. Kramer received $3.4 million in compensation in 2018 — or 141 times the median employee pay, according to the company’s 2019 proxy statement, posted on its website. The compensation for its top executives and its board of directors alone topped $10 million in 2018, according to the proxy statement.

Katie Mayshak, the mother who first raised concerns, encouraged other parents to push back against Bright Horizons — a global employer that often cites its socially minded business practices. In a securities filing amid the coronavirus crisis last month, Bright Horizons reassured investors that it has a strong balance sheet, with $100 million in cash.

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“Companies with significant cash reserves, with a history and track record of executive compensation in the tens of millions of dollars, have a responsibility to their employees — who are both their most valuable and their most vulnerable assets,” Mayshak said.

Another Bright Horizons mother agreed, saying the highly compensated executives should make some sacrifices in solidarity with their lowest-paid workers.

“They should share the love — especially at a time like this,” said Rebecca Gillani, a Boston neurologist.

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And then a surprising thing happened: They did.

Bright Horizons’ CEO announced he will forgo his salary for the rest of the year, or until a majority of child care centers reopen.

The Watertown-based company, known as the world’s leading provider of high-quality child care, gave a nod to concerns of inequity raised by parents advocating for the company’s lowest-paid workers.

“The moment it was clear that we would have to start closing centers, our CEO, Stephen Kramer, knew the right thing to do would be to forgo 100% of his salary and to refocus the organization completely on a mission to provide care for the children of health care workers and first responders,” the company’s communications director, Ilene Serpa, said in a statement.

“The fact is, this is an incredibly challenging time for everyone, Bright Horizons included,” she said. “We are working to support our employees in the best way we can, and with heart, at a time that hurts so much.”

When its child-care centers closed, officials said that employees would be taken care of in the short term, and that some could be redeployed to the state-approved emergency child-care centers now serving essential workers. But that would accommodate only a sliver of Bright Horizons’ 2,300 Massachusetts employees.

Parents began worrying that the teachers would be laid off and making plans to raise money for them. Serpa told the Globe that teachers would be paid for the two weeks following their center’s closing, then furloughed until the centers reopen. They could continue to receive health benefits at a reduced rate through April, and then at the regular rate through June, she said.

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In the meantime, Bright Horizons’ child care center workers are expected to seek unemployment benefits, which were made more generous under the bill Congress passed last week.

Still, some parents viewed the teachers’ treatment as a vivid illustration of societal inequity: The low-wage, front-line workers would bear the brunt of the crisis for a global corporation protecting its generously compensated executives — and shareholders.

The publicly traded company is a rare moneymaker in the child care market.

Most of those on Bright Horizons’ 13-member board of directors receive a $50,000 retainer for attending four meetings a year, according to the company’s 2019 proxy statement, plus stipends for committee work. The $25,000 stipend for one committee chairmanship is more generous than the median Bright Horizons employee’s salary for a year’s worth of workdays changing diapers and patiently articulating the ABCs: $23,969.

“The teachers are grossly underpaid, given how much Bright Horizons is charging each individual parent,” said Gauri Dixit, a Stoneham mother who works in biotech and whose daughter attends Bright Horizons.

Unlike some smaller child-care centers, which initially angered parents by continuing to charge tuition after they were forced to close March 23, Bright Horizons offered parents relief by temporarily halting billing for child-care costs, which are some of the most expensive in the region. Mayshak, for instance, pays $4,500 a month for a preschooler and a toddler to attend the Harborview Bright Horizons at the federal courthouse in the Seaport.

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But parents like Gillani expressed concern that the company was putting teachers “in economic harm, at a time of great uncertainty.”

“As a parent, I would much rather continue paying tuition during this time, than to make our teachers go without,” Gillani wrote to the regional manager.

Even if the teachers qualify for unemployment benefits, she said in an interview, Bright Horizons should not deflect responsibility to social safety nets.

“I think saying, ‘Oh, unemployment will take care of them’ is not enough,” Gillani said.

Bright Horizons executives apparently got the message. On Monday, Mayshak got an e-mail from the CEO himself, offering to talk with her to address her concerns.

Then Bright Horizons announced compensation cuts in a filing this week with the Securities and Exchange Commission.

That filing did not state the CEO’s current pay that he was agreeing to forego. But in 2018, his salary was $408,500 as a portion of his $3.4 million compensation that included bonuses, stock, and options. (That year’s compensation was inflated by a bonus for his first year as CEO, the 2019 proxy statement noted; his salary would typically be more like 79 times the compensation of the median employee.)

Several other top executives will take a 25 percent pay cut for the rest of the year or until the majority of centers reopen, according to the SEC filing. David H. Lissy, chairman of the board, will forgo his compensation of $225,000.

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No figures were provided for the cost savings, but based on 2018 figures, the cuts would shave about $862,000 from the executive team’s $8.2 million compensation. Additionally, an unspecified number of members of the board will forgo their annual cash retainers of $50,000 to $85,000.

The parents viewed that as an encouraging gesture, except for one factor: Bright Horizons did not mention whether teachers would see any relief from the cost-cutting. Serpa said that cuts are being made for the “sustainability of the organization, including our ongoing supports of furloughed employees.”

“The audience that they’re speaking to is clearly investors,” Mayshak said. “That doesn’t make employees feel better. It doesn’t help them to pay bills.”

Parents are still going to donate to teachers during the shutdown, she said.

“Our group of parents have understood that because of the decisions the company has made, there is a need to help these teachers and staff through both advocacy and financial support, and we intend to do both,” Mayshak said.

Bright Horizons is also now furloughing many other employees at the company headquarters, Serpa said.

The company’s tax-exempt charitable foundation also has a relief fund that helps employees manage living expenses when they’re facing “events beyond their control," including natural disasters and domestic violence. Serpa said Bright Horizons hopes to make that fund more broadly available to employees.

“Supporting the communities in which we work and live is at our core," said its 2019 proxy statement.


Stephanie Ebbert can be reached at Stephanie.Ebbert@globe.com. Follow her on Twitter @StephanieEbbert.