Terry Heimes
NELNETAbout Terry Heimes
Terry J. Heimes (age 60) is Nelnet’s Chief Operating Officer (COO) since January 2014 and previously served as Chief Financial Officer from October 1998 to December 2013, reflecting deep tenure across finance and operations . Company performance context: 2024 net income was $184.0 million and non‑GAAP net income excluding derivative market value adjustments was $176.4 million; cumulative TSR since 12/31/2019 measured by a $100 initial investment reached $194.61 in 2024 vs. $173.90 for the S&P 500 Financials peer group . Nelnet’s shareholders strongly supported pay practices, with 99.7% approval on the 2024 say‑on‑pay vote; the most important compensation performance measures disclosed are non‑GAAP net income excluding derivative valuation adjustments and annual growth in per‑share book value (with dividends) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Nelnet, Inc. | Chief Financial Officer | 1998–2013 | Senior finance leadership across public-company reporting and capital allocation (company discloses CFO tenure; specific impact not otherwise detailed) |
External Roles
None disclosed for Mr. Heimes in the proxy .
Fixed Compensation
| Metric (USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | $813,810 | $854,501 | $870,000 |
| All Other Compensation | $55,885 | $74,873 | $70,294 |
| Total Cash (Salary + All Other) | $869,695 | $929,374 | $940,294 |
Notes:
- FY 2024 base salaries (incl. Heimes) were generally increased by ~1.81% given softer prior-year operating results and book value growth, per Committee policy context .
Performance Compensation
Annual Incentive Outcomes
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Annual Incentive Bonus (Paid subsequent year) | $874,851 | $450,000 | $650,000 |
| Payment Form & Vesting | Cash or stock; stock fully vested; 2022 stock elections received +15% additional shares and 3-year transfer restriction | Cash or stock; stock fully vested | Cash or stock; stock fully vested |
Performance Framework (Plan metrics; targets not formulaic)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Net income excluding derivative MV adjustments; book value per share growth; segment profitability (incl. Education Technology Services & Payments), DoE servicing execution, cash flow, diversification, customer satisfaction, engagement | Not disclosed | Not disclosed (Committee did not set specific quantitative/objective targets) | Committee assessed qualitative and quantitative progress (e.g., new DoE servicing contract; revenue diversification; private loan servicing; noted negative impact from Renewable Energy; 2024 book value growth 6.4% with dividends) | $650,000 bonus for Heimes in 2024 under the Plan | Annual incentives paid in cash or fully vested stock (no further vesting) |
Compensation design features:
- No stock options; restricted stock used for longer‑term equity alignment .
- No individual employment contracts or change‑in‑control severance; only accelerated vesting for death, disability, or retirement after age 65 per restricted stock agreements .
- Clawback policy covers incentive-based comp and equity/severance in cases of restatement due to misconduct, misconduct, or material covenant breach; 2024 immaterial corrections required no recovery .
Long‑Term Equity Awards (Restricted Stock Grants)
| Grant | Grant Date | Shares | Grant Value Basis | Vesting Schedule |
|---|---|---|---|---|
| 5-year RS grant | Mar 10, 2022 | 6,052 shares (computed as $500,000 / $82.62 avg price for 5 trading days ended Mar 7, 2022) | $500,016 grant-date fair value (ASC 718) | 1,211 vested Mar 10, 2025; 1,210 vest Mar 10, 2026; 1,210 vest Mar 10, 2027 |
| 5-year RS grant | Mar 10, 2023 | 5,473 shares (computed as $500,000 / $91.36 avg price for 5 trading days ended Mar 7, 2023) | $500,013 grant-date fair value (ASC 718) | 1,095 vested Mar 10, 2025; 1,094 vest Mar 10, 2026; 1,095 vest Mar 10, 2027; 1,094 vest Mar 10, 2028 |
Stock vested in 2024: 4,999 shares; value realized $441,712 (vesting price $88.36 on Mar 11, 2024) .
Equity Ownership & Alignment
| Ownership Detail | Amount | Notes |
|---|---|---|
| Total Beneficial Ownership (Class A) | 242,950 shares | Includes revocable and irrevocable trusts; less than 1% of Class A outstanding |
| Ownership % of Class A | <1% | Based on 25,633,159 Class A shares outstanding |
| Unvested Restricted Shares (12/31/2024) | 13,395 shares | From 2021–2023 RS grants; see schedule below |
| Shares Pledged as Collateral | 50,000 shares | Pledged for a line of credit; no amount drawn as of Feb 28, 2025 |
| Rule 10b5-1 Trading Requirement | Required for officers | Reduces insider trading risk signal |
| Hedging/Short Sales | Prohibited for officers | No derivatives or monetization transactions |
| Pledging Policy Limit | ≤25% of total personal holdings, prior approval required | Heimes’ pledged shares ≈20.6% of his reported holdings; within policy limit |
Vesting Schedule (Scheduled as disclosed; shares)
| Year | Shares Scheduled to Vest |
|---|---|
| 2025 | 4,999 (2021: 2,693; 2022: 1,211; 2023: 1,095) |
| 2026 | 4,997 (2021: 2,693; 2022: 1,210; 2023: 1,094) |
| 2027 | 2,305 (2022: 1,210; 2023: 1,095) |
| 2028 | 1,094 (2023: 1,094) |
Employment Terms
- Role and tenure: COO since January 2014; executive officers serve one‑year terms until successors are elected/qualified .
- Contracts/severance/CoC: No employment contracts; no individual severance or change‑in‑control arrangements; RS agreements provide accelerated vesting upon death, disability, or retirement at age 65+ .
- Clawbacks: Incentive compensation clawback covering Section 16 officers; Board may seek recovery of equity, severance, cash incentives for restatements due to misconduct, misconduct, or material covenant breach; 2024 recovery analysis required no repayment .
- Insider trading: Officers must trade solely via Rule 10b5‑1 plans .
- Hedging/pledging: Hedging/short sales prohibited; pledging discouraged and capped at 25% with prior approval and financial capacity criteria .
Investment Implications
- Pay-for-performance alignment is mixed: bonuses are determined without disclosed quantitative targets and rely on Committee discretion across broad metrics; however, company highlights non‑GAAP net income and per‑share book value growth as key drivers, and bonuses adjusted year‑to‑year with business performance (2023 vs. 2024) .
- Equity alignment is solid with meaningful unvested RS over 2025–2028, creating multi‑year retention hooks; insider selling pressure is moderate given fully vested annual stock bonus elections and a visible RS vesting calendar totaling 13,395 shares through 2028 .
- Pledging risk exists (50,000 shares pledged), but appears controlled: undrawn line of credit and within the company’s 25% pledging cap with 10b5‑1 trading discipline and hedging prohibitions mitigating adverse signals .
- Governance risk from severance/CoC economics is limited—no golden parachutes, no option repricing, and robust clawback policy; strong shareholder support (99.7% say‑on‑pay) lowers controversy risk despite discretionary metrics .
- Execution track record for 2024 includes government servicing platform consolidation and revenue diversification, offset by renewable energy headwinds and modest book value growth; investors should monitor continued progress on fee-based growth and segment profitability given their role in incentive outcomes .