Stephen Neeleman
HEALTHEQUITYAbout Stephen Neeleman
Stephen Neeleman, M.D., 57, is HealthEquity’s Founder and Vice Chairman (director since 2002; CEO from 2002–2014; Vice Chairman since Feb 2014). He is a board-certified general surgeon, with a B.A. from Utah State, M.D. from University of Utah, and a surgical residency at the University of Arizona . Under his long tenure and continuing leadership, HQY’s FY25 performance was strong: revenue $1,199.8M (+20% YoY), net income $96.7M (+74% YoY), diluted EPS $1.09 (+70% YoY), and Adjusted EBITDA $471.8M (+28% YoY); HSA assets reached $32.1B (+27% YoY) . Long-term equity performance has been robust: FY23 PRSUs (granted in 2022) vested at 197% based on 89th percentile relative TSR vs the Russell 2000, indicating strong multi-year shareholder returns .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| HealthEquity, Inc. | Founder & CEO | 2002–2014 | Built HSA category leader; foundational product and market development |
| HealthEquity, Inc. | Vice Chairman | 2014–present | Ongoing strategic oversight; continuity in HSA domain |
| Intermountain Healthcare & University of Arizona | Board-certified General Surgeon | 2003–2014 | Clinical credibility; policy engagement on HSAs |
| Morris Air (acquired by Southwest Airlines) | Senior Manager | Pre-medical school (years not disclosed) | Operations/management experience prior to medical career |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| America’s Health Insurance Plans (AHIP) | HSA Leadership Council Member | N/A | Industry policy and product advocacy for HSAs |
| American Bankers’ Association | HSA Council Member | N/A | Banking/custodian perspectives for HSA growth |
| State of Utah | Health Data Committee Member | N/A | Governance of health data; policy influence |
| Utah Governor’s Office of Economic Development | Board of Directors | N/A | Economic development perspective; ecosystem ties |
| Publications | Co-author: The Complete HSA Guidebook; contributor: The Innovator’s Prescription | N/A | Thought leadership in consumer-directed healthcare |
| Public Company Boards | None | — | No external public-director interlocks |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary ($) | $400,000 | $441,918 | $450,000 |
| Target Bonus (% of Salary) | 90% (derived from bonus $360,000 / salary $400,000) | 86% (derived from $381,154 / $441,918) | 75% |
| Actual Bonus Paid ($) | $360,000 | $381,154 | $438,750 |
| Total Compensation ($) | $2,790,191 | $3,035,500 | $2,888,827 |
- FY26 base salary increased to $500,000 effective April 1, 2025 (reflecting increased responsibilities) .
Performance Compensation
FY25 Annual Bonus Mechanics and Results
| Metric | Weight | Target | Actual | Funding % | Vesting/Payment |
|---|---|---|---|---|---|
| Revenue ($ ‘000s) | 33.33% | 1,171,186 | 1,199,774 | 139% | Cash bonus paid at 130% of target for Dr. Neeleman |
| Adjusted EBITDA ($ ‘000s) | 33.33% | 469,806 | 471,751 | 104% | Cash bonus paid at 130% of target for Dr. Neeleman |
| New HSA Sales (#) | 33.34% | 950,000 | 1,040,000 | 163% | Cash bonus paid at 130% of target for Dr. Neeleman |
- Committee applied discretion to exclude a portion of BenefitWallet-acquisition-driven HSA sales from actuals when calculating payouts .
- FY26 plan continues with equal weights on revenue, Adjusted EBITDA, and new HSA sales; threshold/target/max grid identical to FY25 .
FY25 Equity Grants and Vesting Terms (Granted March 27, 2024)
| Award Type | Shares (Target) | Grant-Date FV ($) | Vesting Terms | Performance Period / Metrics |
|---|---|---|---|---|
| PRSUs | 10,976 | $1,107,588 | Cliff vest at 3 years based on performance | 75% on relative TSR vs Russell 2000; 25% on cumulative non-GAAP EPS ($10.44=50%, $12.28=100%, ≥$15.35=200%); period 3/27/2024–1/31/2027; linear interpolation |
| RSUs | 10,976 | $875,007 | 25% on 4/1/2025; remaining vests ratably over next 12 calendar quarters | Time-based only |
Outstanding/Unvested Equity as of Jan 31, 2025
| Grant Year | Unvested RSUs (#) | Market Value ($) | Unearned PRSUs (#) | Market/Payout Value ($) |
|---|---|---|---|---|
| 2021 | 1,865 | $205,933 | — | — |
| 2022 | 3,485 | $384,814 | 21,969 | $2,425,817 |
| 2023 | 8,440 | $931,945 | 30,012 | $3,313,925 |
| 2024 | 10,976 | $1,211,970 | 19,208 | $2,120,947 |
- RSU market values based on $110.42 closing price on 1/31/2025 .
- FY23 PRSUs (granted 2022) ultimately vested at 197% in March 2025 based on 89th percentile relative TSR .
Option Activity (Liquidity/Pressure Signal)
| Activity (FY25) | Shares | Value |
|---|---|---|
| Options exercised | 70,000 | $4,791,886 |
| Stock vested | 29,249 | $2,419,429 |
Equity Ownership & Alignment
| Category | Amount |
|---|---|
| Total beneficial ownership (shares) | 889,052 (1.0% of shares outstanding) |
| Ownership breakdown | 553,235 shares via The Stephen and Christine Neeleman Trust; 203,000 via Neeleman Family Holdings, LLC; 49,462 options exercisable within 60 days |
| Additional performance RSUs (not in beneficial tally) | 40,068 shares subject to performance conditions (may be forfeited) |
| Pledging/hedging | Prohibited by policy; no pledging allowed |
| Insider trading controls | Trading windows and 10b5-1 plan controls; MNPI prohibitions |
| Stock ownership guidelines | Executives subject to robust guidelines (specific multiples not disclosed); CEO minimum 12-month post-vest holding for net shares |
Employment Terms
| Term | Key Provisions |
|---|---|
| Severance (without cause / good reason) | Cash severance $450,000; pro-rated annual bonus ($438,750 for FY25 actual); COBRA premium reimbursement estimate $26,835 |
| Change-in-control (double-trigger) | Same cash/bonus/COBRA as above; accelerated equity value estimate $6,834,998 assuming PRSUs at target; awards under 2014 Plan accelerate if terminated within 12 months post-CIC; under 2024 Plan accelerate if terminated within 24 months post-CIC when awards are assumed/substituted |
| Equity vesting policy | Double-trigger acceleration framework; PRSUs treatment at greater of target vs measured performance at CIC; continued service requirements unless termination qualifies |
| Non-compete | While employed; generally 12 months post-employment; for Dr. Neeleman, 24 months post-termination if for cause/disability or voluntary without good reason; non-solicit 24 months post-employment |
| Clawback | Board-adopted clawback policy for recouping certain executive compensation |
| Tax gross-ups | None (no severance or perquisite tax reimbursements) |
Board Governance
- Board service: Director since 2002; Vice Chairman; not independent (board lists seven independent directors excluding management) .
- Committees: None; HQY committees are comprised solely of independent directors; Stephen does not serve on committees .
- Leadership and independence: Independent Chairman (Robert Selander); CEO is separate from Chair; quarterly executive sessions without management .
- Attendance: Each director attended ≥75% of board and committee meetings in FY25 .
- Director compensation: Non-employee director retainers and RSU grants disclosed; Stephen is an executive officer and not a recipient of non-employee director retainers .
Compensation Structure Analysis
- Mix and design: Majority at-risk via annual bonus and long-term equity (PRSUs/RSUs); performance metrics emphasize revenue, Adjusted EBITDA, and new HSA growth .
- Equity shift: Current long-term awards are RSUs and PRSUs with multi-year vesting; options exist from legacy grants, but new grants are RSUs/PRSUs (lower risk, stronger retention) .
- Performance rigor: FY25 bonus used objective operating targets and committee discretion to normalize acquisition-related contributions; PRSUs use relative TSR and cumulative non-GAAP EPS with explicit thresholds .
- Governance strength: Double-trigger CIC vesting; hedging/pledging prohibited; no tax gross-ups; independent comp consultant (Semler Brossy) .
- Shareholder support: Prior say-on-pay approval ~98% in 2024, indicating strong external validation .
Investment Implications
- Alignment and retention: Significant ongoing RSU vesting (quarterly through three years) and PRSU performance gates align Dr. Neeleman’s incentives with sustained growth and TSR; double-trigger CIC terms reduce windfall risk and favor retention through change events .
- Potential selling pressure: FY25 option exercises (70,000 shares, $4.79M value realized) and regular RSU settlements indicate periodic supply; however, insider-trading windows, anti-hedging/pledging, and CEO holding rules temper short-term selling dynamics .
- Pay-for-performance credibility: FY25 payouts at 130% reflect outperformance on revenue, EBITDA, and HSA growth; multi-year PRSU structure (prior vest at 197%) signals strong execution and disciplined incentive calibration .
- Governance quality: Independent committees, no gross-ups, robust clawback, and external comp benchmarking reduce compensation risk; non-compete and extended non-solicit (up to 24 months in certain cases) lower transition/retention risk .