Kathleen Farrell
NELNETAbout Kathleen A. Farrell
Independent Class III director at Nelnet since October 2007; age 61. Dean and Professor of Finance at the University of Nebraska–Lincoln College of Business, with expertise in corporate finance, executive turnover, and executive compensation; prior auditor at a national public accounting firm; CPA (inactive). Tenure on NNI’s board spans more than 17 years, with independence affirmed under NYSE/SEC rules.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| University of Nebraska–Lincoln, College of Business | Dean | Dec 2017 – present | Academic and administrative leadership |
| University of Nebraska–Lincoln, College of Business | Interim Dean | Jan 2017 – Dec 2017 | Transition leadership |
| University of Nebraska–Lincoln, Finance Dept. | Chair | Aug 2014 – Dec 2016 | Department leadership |
| University of Nebraska–Lincoln, College of Business | Senior Associate Dean of Academic Programs | Aug 2011 – Jul 2014 | Academic programs oversight |
| University of Nebraska–Lincoln, College of Business | Associate Dean of Academic Programs | Aug 2010 – Aug 2011 | Academic programs support |
| University of Nebraska–Lincoln, College of Business | Professor of Finance | Aug 2009 – present | Teaching/research in corporate finance |
| University of Nebraska–Lincoln, College of Business | Associate Professor of Finance | 2001 – Jul 2009 | Teaching/research |
| University of Nebraska–Lincoln, College of Business | Assistant Professor of Finance | Aug 1993 – 2001 | Teaching/research |
| National public accounting firm | Auditor | Not disclosed | Prior audit experience (CPA, inactive) |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| University of Nebraska–Lincoln, College of Business | Dean and Professor of Finance | Dec 2017 – present (Dean); Professor since 2009 | Finance expert; CPA (inactive) |
Board Governance
- Independence: Board determined all directors are independent except Michael S. Dunlap and Matthew W. Dunlap; Dr. Farrell is independent.
- Meetings/attendance: Full board met 5 times in 2024; all directors attended at least 75% of board and committee meetings; all directors attended the prior annual meeting.
- Board leadership: Executive Chairman (Michael S. Dunlap) with an independent Lead Director (Thomas E. Henning). Non‑employee directors meet in executive session led by the Lead Director.
| Committee | Role | 2024 Meetings | Notes |
|---|---|---|---|
| Nominating & Corporate Governance | Member | 4 | Oversees director nominations and related‑party transaction review. |
| Risk & Finance | Member | 4 | Oversees ERM, capital management, and cybersecurity oversight. |
| Executive Committee | Member | 0 | Exercises board powers between meetings; no formal meetings in 2024. |
Fixed Compensation
| Component (Director, FY2024) | Amount ($) |
|---|---|
| Fees paid in cash | 14,000 |
| Stock awards (annual retainer taken in stock) | 211,856 |
| Matching gift program | 24,900 |
| Total | 250,756 |
- Director compensation elements: Base annual retainer $150,000; $10,000 per committee membership; $1,000 per board/committee meeting; Audit Chair receives extra $12,500; Directors may elect to receive retainers in Class A stock via Directors Stock Compensation Plan (shares calculated at 85% of market price on grant date).
- Hedging/short sales prohibited; directors must trade only via Rule 10b5‑1 plans; pledge use limited and subject to pre‑approval.
Performance Compensation
| Performance Metric Tied to Director Pay | Details |
|---|---|
| None disclosed | Director pay consists of retainers, committee fees, meeting fees, and elective equity; no performance metrics specified for directors. |
Note: The performance metrics in the proxy apply to Named Executive Officers (e.g., net income ex‑derivative MV adjustments, ROE/ROA, operating efficiency, etc.), not to non‑employee director compensation.
Other Directorships & Interlocks
| Company | Role | Tenure | Committee Roles |
|---|---|---|---|
| None disclosed | — | — | — |
- The biographical disclosure lists no other public company directorships for Dr. Farrell in the past five years.
Expertise & Qualifications
- Core expertise: Corporate finance, executive turnover, and executive compensation; prior auditor; CPA (inactive).
- Board qualifications: Financial expertise applicable to risk, compensation, and governance oversight.
Equity Ownership
| Item | Amount |
|---|---|
| Beneficial ownership – Class A shares | 51,096 (includes deferred shares) |
| Deferred shares under Director Stock Compensation Plan | 32,036 |
| Ownership guideline compliance | As of Feb 28, 2025, all directors exceeded guideline thresholds. |
| Pledged shares | No pledging footnote indicated for Dr. Farrell. |
- Ownership guidelines: Encouraged to own value equal to 50% of base retainer multiplied by years of board service; all directors exceed guideline levels.
Governance Assessment
-
Positives
- Independent director with deep finance and compensation expertise; long tenure since 2007 supports institutional knowledge.
- Active on key oversight committees (Nominating & Corporate Governance; Risk & Finance) that supervise director selection, related‑party transaction review, ERM, and cybersecurity.
- Strong alignment: elected to take most compensation in stock; holds 51,096 shares and defers a significant portion, exceeding ownership guidelines; hedging prohibited and pledging restricted.
- Board has an independent Lead Director and conducts regular executive sessions of non‑employee directors.
- Shareholders strongly supported say‑on‑pay in 2024 (99.7% approval), signaling confidence in compensation governance.
-
Risk indicators and red flags
- Controlling shareholder: Executive Chairman Michael S. Dunlap beneficially controls 80.6% of combined voting power, enabling effective control over board composition and decisions.
- Extensive related‑party ecosystem (Union Bank & Trust/F&M, Hudl, WRCM/trusts), with material transactions and acknowledgments that terms may not be equivalent to unrelated‑party market terms—persistent structural conflict risk; these transactions fall under oversight of the Nominating & Corporate Governance Committee (of which Dr. Farrell is a member).
- Concentration of operational banking relationships at Union Bank (e.g., $511.1m deposits/STFIT; $2.7m 529‑plan administration fees; net pre‑tax income effect of Union Bank transactions ≈ $12.3m in 2024), reinforcing related‑party exposure.
- Executive Committee held no formal meetings in 2024; effectiveness relies on full board and other committees for interim oversight.
-
Context on related‑party exposures (illustrative 2024 figures)
- Loan purchases from Union Bank: $104.2m par; servicing revenue $0.2m; participation interests on loans $687.1m outstanding; operating cash at Union Bank/STFIT $511.1m; 529‑plan admin fees $2.7m; WRCM advisory fees from Union Bank $3.8m (securities trusts) + ~$257k (trust advisory); net pre‑tax income effect from Union Bank relationships $12.3m.
- Payments to Hudl for cafeteria/common areas: ~$594k; NNI/Michael Dunlap family collectively hold ~25% of Hudl equity; Union Bank participates in Hudl credit facility.
Overall: Dr. Farrell’s independence, financial acumen, and equity-heavy compensation support investor alignment; however, the controlling shareholder structure and volume of related‑party transactions present ongoing governance risk that the Nominating & Corporate Governance Committee (including Dr. Farrell) must continue to mitigate through rigorous review and disclosure.