Tim Tewes
NELNETAbout Tim Tewes
Timothy A. Tewes, 66, serves as President of Nelnet, Inc. (since January 2014) and Chief Executive Officer of Nelnet Business Services, Inc. (since May 2007), a core operating segment that delivered strong earnings in 2024 . Company-level performance context: 2024 net income was $184.0 million, and net income excluding derivative market value adjustments was $176.4 million; the Company’s 5-year pay-versus-performance TSR index value reached 194.61 vs. 173.90 for the peer group (S&P 500 Financials) . Nelnet emphasizes pay-for-performance, with incentives tied to metrics including net income, ROE/ROA, cash flow, fee-based revenue diversification, operating efficiency, customer satisfaction, employee engagement, and strategic contract execution (e.g., U.S. Department of Education servicing) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Nelnet, Inc. | President | Jan 2014–present | Executive leadership across diversified businesses |
| Nelnet Business Services, Inc. | Chief Executive Officer | May 2007–present | Segment delivered strong earnings in 2024; continued diversification of fee-based revenues |
| Nelnet Business Services, Inc. | President | May 2007–Dec 2013 | Led growth and maturation of education technology and payments operations |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed in latest proxy | — | — | — |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 813,810 | 854,501 | 870,000 |
| All Other Compensation ($) | 64,155 | 64,712 | 201,387 |
| Total Compensation ($) | 2,191,791 | 1,869,226 | 1,721,387 |
Breakdown of “All Other Compensation” for FY 2024:
- 401(k) match $13,800; life insurance premiums $211; matching gifts $62,800; dividends on restricted stock $16,402; earned time off buy-back $107,874; other $300 .
Performance Compensation
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Annual Performance-Based Incentive Bonus ($) | 813,810 | 450,000 | 650,000 |
| Payout Form | Cash or stock (officer-elected); stock fully vested under Restricted Stock Plan | Cash or stock (elected); stock fully vested | Cash or stock (elected); stock fully vested |
| Long-Term Equity Awards (Restricted Stock) – Grant Date Fair Value ($) | 500,016 | 500,013 | — (no new time-based grant in 2024; see ETB buy-back shares below) |
Executive Officers Incentive Compensation Plan metrics and payout detail (company-wide framework):
| Metric Category | Specific Measures | Weighting | Target | Actual | Payout/Vesting |
|---|---|---|---|---|---|
| Profitability & EPS | Net income; EPS; net income/EPS excluding derivative MV adjustments | Not disclosed | Not disclosed | 2024 net income $184.0m; non-GAAP net income $176.4m | 2024 annual incentive $650,000; cash or stock; stock fully vested |
| Capital & Returns | ROE/ROA; equity-to-assets | Not disclosed | Not disclosed | Not disclosed | As above |
| Fee-Based Growth & Diversification | Segment fee revenues; diversification across asset types | Not disclosed | Not disclosed | NBS strong earnings in 2024 | As above |
| Operating & Customer Metrics | Efficiency ratios; servicing volumes; service ratings; satisfaction | Not disclosed | Not disclosed | New DOE servicing contract executed; platform enhancements; consolidation to one platform | As above |
| Cash Flow & Investments | Operating cash flow; securitized portfolio net cash flows | Not disclosed | Not disclosed | Sustained estimated future cash flow from loan portfolios | As above |
| Engagement & Talent | Employee engagement, productivity, retention | Not disclosed | Not disclosed | Considered by Committee | As above |
Notes:
- Committee did not set quantitative target formulas for 2024; awards reflected holistic assessment of the above measures and individual achievement .
- Most important performance measures linked to executive compensation: net income excluding derivative MV adjustments; annual growth in per share book value (dividends included) .
Equity Ownership & Alignment
| Ownership Metric | Value | Notes |
|---|---|---|
| Beneficial Ownership (Class A shares) | 82,546 shares (<1% of Class A outstanding) | As of Feb 28, 2025 |
| Unvested Restricted Shares (as of Dec 31, 2024) | 13,395 shares | Grants from 2021–2023 remain unvested per schedule |
| Options Outstanding | None (company does not grant stock options) | — |
| Shares Pledged as Collateral | Not disclosed for Tewes; company discourages pledging and limits any approved pledges to ≤25% of total holdings | Requires prior approval; margin/pledge discouraged |
| Hedging/Derivatives | Prohibited (short sales, options, equity swaps, collars, etc.) | Applies to officers and directors |
| Trading Policy | Officers must transact via Rule 10b5-1 plans | Designed to reduce perceptions of opportunistic selling |
Restricted stock vesting schedules (remaining tranches as of Dec 31, 2024):
| Grant Year | Remaining Unvested Shares | Vesting Schedule |
|---|---|---|
| 2023 | 4,378 total (for Tewes): 1,095 vested 3/10/2025; 1,094 vest 3/10/2026 & 3/10/2028; 1,095 vest 3/10/2027 | March 10 annually through 2028 |
| 2022 | 3,631 total (for Tewes): 1,211 vested 3/10/2025; 1,210 vest 3/10/2026 & 3/10/2027 | March 10 through 2027 |
| 2021 | 5,386 total (for Tewes): 2,693 vested 3/10/2025; 2,693 vest 3/10/2026 | March 10, 2026 |
Stock vested in FY 2024:
| Metric | FY 2024 |
|---|---|
| Shares Vested | 5,997 (includes 4,999 from scheduled vestings plus 998 ETB buy-back shares) |
| Value Realized ($) | 554,466 |
| Vesting Prices | $88.36 (3/10/2024 tranches), $112.98 (9/13/2024 ETB shares) |
Other 2024 share issuance:
- Accrued Earned Time Off buy-back: 998 shares issued 9/13/2024; immediately vested; grant-date fair value $107,874 based on $108.09 average closing price over 8/9–8/15/2024 .
Employment Terms
| Term | Disclosure |
|---|---|
| Executive Officer Term Length | One-year terms under bylaws; officers elected annually by Board |
| Employment Contract | Company states “No employment contracts” for Named Executive Officers |
| Severance / Change-in-Control | No individual severance or change-in-control arrangements; unvested restricted stock vests upon death, disability, or retirement at ≥65 |
| Clawback | Incentive Compensation Clawback Policy covering Section 16 officers; recovery triggered by restatements, misconduct, or restrictive covenant breaches; 2024 immaterial corrections required no recovery |
| Hedging / Short Sales | Prohibited; derivatives and hedging banned |
| Pledging | Discouraged; any pledge or margin use requires approval and is limited to ≤25% of total shares held |
| 10b5-1 Trading Plans | Mandatory for officers to buy/sell company stock |
Performance & Track Record
- 2024 achievements considered for incentives: strong NBS earnings; execution of new long-term U.S. Department of Education servicing contract; platform enhancements and consolidation; sustained future cash flows from loan portfolios; diversification of revenue and assets; new private student loan servicing contracts; customer satisfaction and employee engagement .
- Headwinds: negative earnings impact from Nelnet Renewable Energy; modest per-share book value growth (with dividends) of 6.4% in 2024 .
- Company pay-vs-performance indicators: 2024 net income $184.0m; non-GAAP net income $176.4m; TSR index value 194.61 vs. peer group 173.90 .
Compensation Structure Analysis
- Cash vs. equity mix: base salary rose modestly 2022→2024; long-term restricted stock grants of ~$500k occurred in 2022 and 2023, with no new time-based grant in 2024 (aside from ETB buy-back shares) .
- At-risk pay: annual incentive increased to $650k in 2024 (from $450k in 2023), reflecting committee assessment of segment and company performance against plan measures .
- Options: none—Company uses restricted stock rather than options; no long-term incentive or defined benefit plans .
- Targets/weights: committee did not disclose quantitative targets or weights for 2024; plan cap set at 150% of base salary .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval (%) |
|---|---|
| 2024 | 99.7% approval of NEO compensation |
Compensation Peer Group & Consultants
| Item | Disclosure |
|---|---|
| Pay vs Performance Peer Group | S&P 500 Financials index |
| Compensation Consultant (2022) | Towers Watson; benchmarked general industry, financial services, and high-tech markets; concluded Company’s executive compensation is conservative vs. benchmarks |
Equity Ownership & Alignment – Additional Governance
- Board/Officer stock policies: prohibitions on hedging/shorting; limits and approvals for any pledging; mandatory 10b5-1 trading plans for officers; insider trading policy filed as exhibit to 2024 Form 10-K .
- Director ownership guidelines (not applicable to executives): directors encouraged to own shares equal to 50% of base retainer times years served; all directors compliant as of Feb 28, 2025 .
Investment Implications
- Alignment: Significant unvested restricted stock through 2026–2028 supports retention and long-term value alignment; mandatory 10b5-1 trading plans and anti-hedging policies reduce discretionary selling pressure .
- Pay-for-performance: Incentives reflect NBS’s strong 2024 results and strategic contract execution; however, lack of disclosed quantitative targets/weights limits external modelability of payout sensitivity to metrics .
- Risk/Protection: No employment contracts or CIC/severance; clawback policy covering restatements/misconduct; accelerated vesting only on death/disability/retirement at 65—a conservative structure mitigating windfall risks .
- Execution watchpoints: Continued delivery on DOE servicing migration/platform performance, and isolating/turning around renewable energy headwinds will be important for sustaining incentive payout justification and segment-level value creation .