Todd Nelson
PERDOCEO EDUCATIONAbout Todd Nelson
Todd S. Nelson, age 66, is President and Chief Executive Officer of Perdoceo Education Corporation and has served on the Board since August 2015; he was Executive Chairman from January 2022 to November 2023 and returned to the CEO role in November 2023. He holds a B.S. in Marketing from Brigham Young University and an MBA from the University of Nevada, and previously led Apollo Group and Education Management Corporation (EDMC) in senior roles. In 2024, Perdoceo’s operating income rose to $174.3 million (from $150.4 million), student enrollments grew 20.0%, and the Company completed the acquisition of the University of St. Augustine for Health Sciences (USAHS); revenue fell 4.0% or $28.7 million in the year. These results drove maximum annual incentive payouts and reflected execution on retention and enrollment initiatives.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Education Management Corporation (EDMC) | Director; Chairman | Director: Feb 2007–Nov 2013; Chairman: Aug 2012–Nov 2013 | Led governance and oversight during for‑profit education industry turbulence. |
| Education Management Corporation (EDMC) | Chief Executive Officer; President | CEO: Feb 2007–Aug 2012; President: Feb 2007–Dec 2008 | Ran large private postsecondary operator through regulatory and market shifts. |
| Apollo Group (Apollo Education Group) | President; Chief Executive Officer; Chairman | President: Feb 1998–Jan 2006; CEO: Aug 2001–Jan 2006; Chairman: Jun 2004–Jan 2006 | Drove strategy, marketing, compliance and operations at an industry leader. |
| University of Nevada–Las Vegas | Faculty | 1983–1984 | Early academic experience supporting sector expertise. |
| Independent Consultant | Consultant | Jan 2006–Jan 2007 | Advised on education business and transitions. |
External Roles
| Organization | Role | Years |
|---|---|---|
| Education Management Corporation | Director; Chairman of the Board | Director: Feb 2007–Nov 2013; Chairman: Aug 2012–Nov 2013 |
| University of Nevada–Las Vegas | Faculty | 1983–1984 |
Fixed Compensation
Multi-year CEO compensation (as reported):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $703,712 | $712,500 | $800,000 |
| Bonus ($) | $0 | $0 | $1,500,000 (one-time acquisition bonus) |
| Stock Awards ($) | $2,043,087 | $2,004,036 | $2,351,513 |
| Non-Equity Incentive ($) | $1,759,280 | $1,781,250 | $2,000,000 |
| All Other Compensation ($) | $6,100 | $6,600 | $74,247 |
| Total ($) | $4,512,179 | $4,504,386 | $6,725,760 |
Additional changes: Base salary increased 6.25% to $850,000 effective March 1, 2025.
Performance Compensation
Annual Incentive Plan (AIP) structure and 2024 outcome:
| Item | 2024 Details |
|---|---|
| AIP Target as % of Base | 125% of base salary |
| Financial Metric | Adjusted Operating Income (AOI), 80% weighting |
| Individual Goals | Qualitative strategic goals, 20% weighting; capped by AOI payout |
| AOI Target vs Actual | Target $166.0 million; Actual $194.6 million |
| Payout Percent | 200% for both AOI and individual goals (subject to cap) |
| CEO AIP Paid | $2,000,000 |
Long-Term Incentive (LTI) awards (2024 grant mix and vesting):
- 2024 LTI target value: 300% of base salary, split 50% time-based RSUs and 50% performance-based RSUs (PSUs).
- 2024 grants: 67,340 time-based RSUs (vest 25% annually over 4 years) and 67,340 PSUs (cliff vest after 3 years based on 2-year AOI measure plus year-3 threshold; 0–200% payout).
Performance-based award settlement (2022 grant):
| Metric | Target | Actual | Payout | Vesting |
|---|---|---|---|---|
| LTI EBITDA (2022–2023) | $270.0 million | $360.5 million | Max (200%) | 3/14/2025 |
| LTI EBITDA (2024) | $65.0 million | $197.9 million | Supports 200% outcome | 3/14/2025 |
| CEO PSUs vested (2022 grant) | — | — | 196,260 units | 3/14/2025 |
Dividend equivalents paid on unvested RSUs/PSUs upon vesting in 2024: CEO $67,347.
Equity Ownership & Alignment
Beneficial ownership and alignment:
| Item | Value |
|---|---|
| Common shares beneficially owned | 300,199 shares |
| Shares outstanding (record date) | 65,533,553 |
| Ownership % of outstanding | ~0.46% (300,199 / 65,533,553) |
| CEO stock ownership guideline | 5x base salary; retain 75% net shares until met |
| Compliance status | All current designated officers have attained guidelines |
| Pledging/Hedging policy | Prohibits pledging, hedging, short sales, derivatives |
Outstanding equity awards at FY2024:
| Award | Units | Key Vesting Dates/Terms |
|---|---|---|
| 2024 Time-based RSUs | 67,340 | 25% on 3/14/2025; 25% on 3/14/2026; 25% on 3/14/2027; 25% on 3/14/2028 |
| 2024 PSUs (AOI) | 67,340 | Cliff vest 3/14/2027 subject to AOI performance (0–200%) |
| 2023 Time-based RSUs | 54,855 | 1/3 on 3/14/2025; 1/3 on 3/14/2026; 1/3 on 3/14/2027 |
| 2023 PSUs (AOI) | 146,280 | Cliff vest 3/14/2026 subject to AOI performance |
| 2022 Time-based RSUs | 49,066 | 1/2 on 3/14/2025; 1/2 on 3/14/2026 |
| 2022 PSUs (EBITDA) | 196,260 | Vested 3/14/2025 at 200% (max) |
| 2021 Time-based RSUs | 14,580 | Vested 3/14/2025 |
| Stock Options | 12,472 exercisable at $13.80; exp. 3/06/2028 | Fully vested |
Option exercises and RSU vesting in 2024:
| Item | CEO |
|---|---|
| Shares acquired on option exercise | 105,500 |
| Value realized on exercise | $495,853 |
| RSUs vested (shares) | 204,081 |
| Value realized on RSU vesting | $3,612,234 |
Stock ownership guidelines and enforcement:
- CEO must hold stock equal to 5x base salary; retain 75% of net shares until guideline met; committee can adjust awards or pay to enforce compliance; all designated officers currently in compliance.
Employment Terms
Key employment, severance, and change-of-control economics:
- Employment status: At-will; no fixed term employment contract.
- Executive Severance Plan: Lump sum equal to 1x salary + 1x target AIP bonus; subsidized COBRA at employee rate for one year; outplacement support.
- CEO (Nelson) Letter Agreement enhancements: 2x base salary + 2x target AIP bonus; pro rata AIP bonus based on actual performance; 18 months subsidized COBRA; accelerated vesting of LTI awards with performance treatment (target if termination within first year of performance period, actual performance if after first year). Non-compete and non-solicit covenants for two years post-termination.
- Change-in-control: Plan uses double-trigger for any change-in-control payments.
- Clawback: No-fault recoupment for incentive compensation upon financial restatement under SEC/Nasdaq rules (effective Dec 1, 2023).
- Insider Trading Policy: Blackout windows; prohibits hedging, pledging, short sales, margin, and derivatives on Company stock.
Board Governance and Service
- Board service: Director since August 2015; served as Executive Chairman Jan 2022–Nov 2023; currently CEO and director.
- Independence and dual-role implications: Nelson is an employee director and does not receive additional director compensation; PRDO separates Chairman and CEO roles with an independent Chairman (Gregory Jackson since Nov 16, 2023), mitigating CEO/Chairman concentration concerns.
- Committee roles: Audit, Compensation, Compliance & Risk, and Nominating & Governance Committees are fully independent; CEO is not a committee member.
- Board activity/attendance: Board met six times in 2024; all incumbent directors attended at least 75% of Board and committee meetings.
- Director compensation (context): Employee directors (including Nelson) receive no additional board pay.
Compensation Structure Analysis
- Pay mix and governance: CEO total direct compensation is heavily performance-based, with AIP tied 80% to AOI and LTI split 50% RSUs/50% PSUs; compensation best practices include no individual change-in-control agreements, no tax gross-ups on severance/CoC, clawback policy, and prohibition on hedging/pledging.
- Benchmarking: Compensation set against a 16-company peer group with size-adjusted market data; 2U, Inc. later removed due to bankruptcy.
- Say-on-Pay: 2024 say-on-pay approved by ~97% of votes; the Company engaged investors representing over 50% of outstanding shares with no structural concerns raised.
Risk Indicators & Red Flags
- No tax gross-ups on severance/change-in-control; no option repricing without stockholder approval.
- Clawback in place; hedging and pledging prohibited; insider trading policy enforced with windows.
- Related-party transactions: None requiring disclosure; Board sees no relationships impairing independence.
- One-time acquisition bonus ($1.5 million) for USAHS transaction increased 2024 cash pay; consistent with Board-approved recognition for extraordinary efforts.
Investment Implications
- Alignment and incentives: Strong alignment via ownership guidelines (5x salary) and PSUs tied to AOI/EBITDA; recent outperformance led to maximum AIP and 200% PSU vesting, signaling robust operational execution. Upcoming vesting dates in mid-March across 2026–2028 could create predictable liquidity events and potential selling pressure.
- Retention vs risk: Significant unvested equity across RSUs/PSUs supports retention; severance terms (2x salary+bonus, accelerated equity) indicate competitive but not excessive protection. Governance safeguards (independent Chair, clawbacks, no hedging/pledging, no gross-ups) reduce governance risk.
- Performance lens: 2024 operating income growth (+$23.9 million YoY) and enrollment gains (+20%) underpin incentive payouts and confidence in strategy, though revenue decline (−4.0%, −$28.7 million) warrants monitoring of program mix and USAHS integration progress.