Laureate Education, Inc. (NASDAQ:LAUR), currently trading at $18.93 and showing strong momentum with a 40% return over the past year, has disclosed an updated employment agreement with its President and Chief Executive Officer, Eilif Serck-Hanssen, on Thursday.
The revised terms include an annual base salary of $1 million starting January 1, 2025, and a target bonus of 130% of this base salary for fiscal year 2024 and beyond. According to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment, with multiple positive indicators suggesting strong financial health.
The Miami-based educational services provider, which generated revenue of $1.55 billion in the last twelve months with a healthy gross profit margin of 36.5%, detailed a one-time equity grant valued at $5 million in the form of restricted stock units (RSUs), vesting half on December 12, 2025, and the other half on December 12, 2026.
These RSUs will fully vest upon Serck-Hanssen's termination without cause or due to death or disability. Additionally, starting fiscal 2025, he will receive an annual long-term incentive equity grant worth 350% of his base salary.
InvestingPro data reveals the company maintains strong cash flows and operates with a moderate level of debt, with 6 more key insights available to subscribers.
The new agreement, effective as of December 12, 2024, amends and restates the previous terms from November 8, 2023. It also outlines severance benefits in line with the company's Severance Policy for Executives, which stipulate full vesting of the one-time RSU award if Serck-Hanssen is terminated without cause or due to death or disability.
The grant date for the RSUs is set for January 2, 2025, and the number of units will be based on the volume-weighted average price of Laureate Education's common stock on NASDAQ over the 30 trading days prior to and including the grant date.
With an impressive return on equity of 27% and earnings per share of $1.62, the company demonstrates strong financial performance, as detailed in the comprehensive Pro Research Report available on InvestingPro.
The agreement requires a six-month written notice from the company to terminate Serck-Hanssen without cause and a similar notice period from him should he choose to resign for any reason, barring death or disability. This information is based on a press release statement.
In other recent news, Laureate Education, Inc. reported a robust Q3 2024 financial performance, exceeding its early August guidance with a Q3 revenue of $369 million and adjusted EBITDA of $91 million.
This strong performance was primarily driven by a 12% increase in new enrollments in Peru and a 4% growth in Mexico. Following these results, Laureate Education raised its 2024 revenue and adjusted EBITDA outlook by $50 million and $6 million, respectively, and announced a new $100 million stock repurchase program.
The company expects total enrollments to reach around 470,000 for the year, with revenue projected between $1.551 billion and $1.556 billion, and adjusted EBITDA ranging from $447 million to $451 million. Despite currency headwinds from a weaker Mexican peso and potential new competition from public university capacity expansion in Mexico, the company remains bullish due to favorable GDP growth in Peru and consistent growth in new enrollments.
In addition, Laureate Education projects a 5% growth in revenue on an as-reported basis for 2024, with adjusted EBITDA expected to increase by 7% to 8%.
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