Jeff Noordhoek became the CEO of Nelnet, Inc. (NYSE:NNI) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Jeff Noordhoek's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Nelnet, Inc. has a market cap of US$2.3b, and reported total annual CEO compensation of US$1.8m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$716k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.8m.
A first glance this seems like a real positive for shareholders, since Jeff Noordhoek is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Nelnet, below.
Is Nelnet, Inc. Growing?
On average over the last three years, Nelnet, Inc. has shrunk earnings per share by 16% each year (measured with a line of best fit). Revenue was pretty flat on last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Nelnet, Inc. Been A Good Investment?
Nelnet, Inc. has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
It looks like Nelnet, Inc. pays its CEO less than similar sized companies.
Shareholders should note that compensation for Jeff Noordhoek is under the median of a group of similar sized companies. But the business isn't growing earnings per share, and the returns to shareholders haven't been wonderful. There is room for improved company performance, but we don't see the CEO pay as a big issue here. So you may want to check if insiders are buying Nelnet shares with their own money (free access).
Important note: Nelnet may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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