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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant x Filed by a party other than the Registrant ¨
Check the appropriate box:
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| x | Definitive Proxy Statement | |
| ¨ | Definitive Additional Materials | |
| ¨ | Soliciting Material Pursuant to Section 240.14a-12 | |
SLM Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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300 Continental Drive
Newark, Delaware 19713
May 5, 2016
Dear Fellow Stockholders:
Please join us for the SLM Corporation (“Sallie Mae”) 2016 Annual Meeting of Stockholders (the “Annual Meeting”) on Thursday, June 23, 2016, at 11:00 a.m. Eastern Daylight Time in our corporate headquarters located at 300 Continental Drive, Newark, Del. 19713.
In 2015, our first full year of operation, we met or exceeded all of our goals. We helped 333,000 students make college happen, invested in our infrastructure and put service enhancements in place to improve our customers’ experience. Loan origination volume exceeded expectations, the private loan portfolio increased, and credit quality remained excellent. As we head into 2016, Sallie Mae is better positioned than ever to serve families as they save, plan, and pay for college, and remains on an upward growth trajectory.
Details of the business to be conducted at the Annual Meeting are provided in the attached Notice of Annual Meeting and proxy statement. You are being asked to vote on a number of important matters. Your vote is important, regardless of the number of shares you own, and all holders of our Common Stock are cordially invited to attend the Annual Meeting in person. Whether or not you plan to attend the Annual Meeting, please vote at your earliest convenience by following the instructions in the Notice of Availability of Proxy Materials or the proxy card you received in the mail.
Thank you for your continued support of Sallie Mae.
| Sincerely, |
| /s/ Raymond J. Quinlan |
| Raymond J. Quinlan |
| Chairman of the Board of Directors and Chief Executive Officer |
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300 Continental Drive
Newark, Delaware 19713
May 5, 2016
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
To our Stockholders:
SLM Corporation (“Sallie Mae” or the “Company”) will hold its 2016 Annual Meeting of Stockholders (the “Annual Meeting”) as follows:
| Date and Time: |
Thursday, June 23, 2016, 11:00 a.m., Eastern Daylight Time | |
| Place: |
Sallie Mae’s Corporate Headquarters 300 Continental Drive Newark, Delaware 19713 | |
| Items of Business: |
(1) Elect 12 directors nominated by the Sallie Mae Board of Directors (“Board of Directors”), each for a one-year term, to serve until their successors have been duly elected and qualified; | |
| (2) Approve, on an advisory basis, Sallie Mae’s executive compensation; | ||
| (3) Ratify the appointment of KPMG LLP as Sallie Mae’s independent registered public accounting firm for the year ending December 31, 2016; and | ||
| (4) Transact such other business as may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting. | ||
| Record Date: |
Stockholders of record of the Company’s Common Stock, par value $.20 per share (“Common Stock”), as of the close of business on April 25, 2016, will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement of the Annual Meeting. On April 25, 2016, 427,929,949 shares of Common Stock were outstanding and eligible to be voted. | |
Your participation in the Annual Meeting is important. Sallie Mae urges you to take the time to read carefully the proposals described in the proxy statement and vote your proxy at your earliest convenience. You may vote by telephone, Internet or, if you request that proxy materials be mailed to you, by completing and signing the proxy card enclosed with those materials and returning it in the envelope provided. If you wish to attend the meeting in person, you must bring evidence of your ownership as of April 25, 2016, or a valid proxy showing that you are representing a stockholder.
| /s/ Laurent C. Lutz |
| Laurent C. Lutz |
| Executive Vice President, General Counsel and Corporate Secretary |
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300 Continental Drive
Newark, Delaware 19713
The Board of Directors of SLM Corporation (“Sallie Mae,” the “Company,” “we,” “our” or “us”) is furnishing this proxy statement to solicit proxies for use at Sallie Mae’s 2016 Annual Meeting of Stockholders (the “Annual Meeting”). A copy of the Notice of the Annual Meeting accompanies this proxy statement. This proxy statement is being sent or made available, as applicable, to our stockholders beginning on or about May 5, 2016. For more information regarding the Annual Meeting process, please review the section entitled “Questions and Answers About the Annual Meeting and Voting” contained at the end of this proxy statement.
The proxy statement and Sallie Mae’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”) are available at http://www.salliemae.com/Investors/AnnualReports and http://materials.proxyvote.com. You may also obtain these materials at the Securities and Exchange Commission website at www.sec.gov or by contacting the Office of the Corporate Secretary at the Company’s principal executive offices, located at 300 Continental Drive, Newark, Delaware 19713. Sallie Mae will provide a copy of the 2015 Form 10-K without charge to any stockholder upon written request.
This proxy statement contains three proposals requiring stockholder action, each of which is discussed in more detail below. Proposal 1 seeks the election of 12 directors nominated by the Board of Directors. Proposal 2 seeks approval, on an advisory basis, of Sallie Mae’s executive compensation. Proposal 3 seeks ratification of the appointment of KPMG LLP as Sallie Mae’s independent registered public accounting firm for the fiscal year ending December 31, 2016. Each share of Common Stock is entitled to one vote on each proposal or, in the case of the election of directors, on each nominee.
PROPOSAL 1—ELECTION OF DIRECTORS
The Sallie Mae Board of Directors has nominated and recommends 12 individuals for election to our Board of Directors at the Annual Meeting. These individuals are as follows:
| Paul G. Child |
Jed H. Pitcher | |
| Carter Warren Franke |
Frank C. Puleo | |
| Earl A. Goode |
Raymond J. Quinlan | |
| Ronald F. Hunt |
Vivian C. Schneck-Last | |
| Marianne M. Keler |
William N. Shiebler | |
| Jim Matheson |
Robert S. Strong |
Under our Certificate of Incorporation, the size of our Board of Directors may not be less than 11 nor more than 16 members. Under the By-Laws, the Board of Directors has the authority to determine the size of the Board of Directors within that range and to fill any vacancies that may arise prior to the next annual meeting of stockholders. Currently, the Board of Directors has set the number of members at 12.
Biographical information, qualifications, and experience with respect to each nominee appears below. In addition to fulfilling the general criteria for director nominees described in the section titled “Nominations Process,” each nominee possesses experience, skills, attributes and other qualifications the Board of Directors has determined support its oversight and management of Sallie Mae’s business, operations and structure. These qualifications are discussed below, along with biographical information regarding each member of the Board of Directors, including each individual’s age, principal occupation and business experience during the past five years. Information concerning each director is based in part on information received from the respective directors and in part from Sallie Mae’s records.
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All nominees appearing below have consented to being named in this proxy statement and to serve if elected. Should any nominee subsequently decline or be unable to accept such nomination to serve as a director, the Board of Directors may designate a substitute nominee or the persons voting the shares represented by proxies solicited hereby may vote such shares for a reduced number of nominees. If the Board of Directors designates a substitute nominee, persons named as proxies will vote “FOR” that substitute nominee.
Our By-Laws provide the election of a director in an uncontested election will be by a majority of the votes cast with respect to a nominee at a meeting for the election of directors at which a quorum is present. Each share of Common Stock is entitled to one vote for each nominee. A director nominee will be elected to the Board of Directors if the number of shares voted “FOR” the nominee exceeds the number of votes cast “AGAINST” the nominee’s election. Abstentions and shares not voted on the proposal, including broker non-votes, are of no effect.
If any director nominee fails to receive a majority of the votes cast “FOR” his or her election, such nominee will automatically tender his or her resignation upon certification of the election results. Sallie Mae’s Nominations, Governance and Compensation Committee (the “NGC Committee”) will make a recommendation to the Sallie Mae Board of Directors on whether to accept or reject such nominee’s resignation. The Sallie Mae Board of Directors will act on the NGC Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of certification of the election results.
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NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
| Name and Age Service as a Director |
Position, Principal Occupation, Business Experience and Directorships | |
| Paul G. Child | Former Office Managing Partner, Salt Lake City, Deloitte LLP | |
| 67
Director since April 30, 2014 |
Professional Highlights:
• Office Managing Partner, Salt Lake City, Deloitte LLP—1995 to 2008; Professional Practice Director, Salt Lake City—1989 to 1995; Audit Partner—1983 to 2008; various positions—1971 to 1983
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2009 to present • Member, Board of Governors, Salt Lake Chamber of Commerce—2002 to 2008 • Director, Mountainwest Capital Network—2002 to 2008 • Director, United Way of Greater Salt Lake—2001 to 2008
Mr. Child’s leadership roles and experience in the accounting field enable him to bring to the Board of Directors experience in the areas of finance, accounting, financial services and capital markets. | |
| Carter Warren Franke | Former Managing Director, Head of Corporate Marketing, JPMorgan Chase & Co. | |
| 59
Director since April 30, 2014 |
Professional Highlights:
• Managing Director, Head of Corporate Marketing, JPMorgan Chase & Co.—2007 to 2013 • Executive Vice President and Chief Marketing Officer, Chase Card Services—1995 to 2007
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2014 to present • Director, The Warfield Fund—2007 to present • Director, Saint Mary’s School—2014 to present • Director, Paul’s Place—2014 to present
Ms. Warren Franke’s leadership roles and experience in marketing and the banking industry enable her to contribute to the Board of Directors experience in the areas of marketing, business development, and financial services. |
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| Name and Age Service as a Director |
Position, Principal Occupation, Business Experience and Directorships | |
| Earl A. Goode | Former Chief of Staff to the Governor of Indiana | |
| 75
Director since July 31, 2000 |
Professional Highlights:
• President, Indianapolis Capital Improvement Board of Managers—2015 to 2016 • Chief of Staff to the Governor of Indiana—2006 to 2013 • Deputy Chief of Staff to the Governor of Indiana—2006 • Commissioner, Department of Administration, State of Indiana—2005 to 2006 • Chairman, Indiana Sports Corporation—2001 to 2006
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2013 to present • Chairman, Georgetown College Board of Trustees—2006 to present • Director, Mitch Daniels Leadership Foundation—2012 to present • Member, Executive Committee and Host Committee, 2012 Super Bowl—2009 to 2014 • Vice Chairman, Indiana Motorsports Commission—2015 to present
Mr. Goode has held several leadership positions in business services and operations. This experience, combined with his involvement in the state political process, enables him to contribute to the Board of Directors in the areas of marketing and product development, business operations and political/government affairs. | |
| Ronald F. Hunt | Attorney and Private Investor | |
| 73
Director since July 5, 1995 |
Professional Highlights:
• Attorney and Private Investor—1990 to present • Founding Chairman, National Student Clearinghouse—1994 to 1996; 1997 to 2004 • Executive Vice President and General Counsel, Student Loan Marketing Association—1984 to 1990; various officer positions—1973 to 1984 • Secretary, United States Securities and Exchange Commission—1971 to 1973
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2013 to present • Trustee, Warren Wilson College Board of Trustees—2003 to present • Member, Riverside Theater Board of Trustees—2012 to present
Mr. Hunt’s extensive and deep involvement with the student loan industry and his legal background enable him to bring to the Board of Directors a valuable perspective in the areas of corporate governance, academia, financial services, student/consumer lending and legal and regulatory matters. |
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| Name and Age Service as a Director |
Position, Principal Occupation, Business Experience and Directorships | |
| Marianne M. Keler | Attorney, Keler & Kershow, PLLC | |
| 61
Director since April 30, 2014 |
Professional Highlights:
• Attorney, Keler & Kershow, PLLC—2006 to present • Executive Vice President, Consumer Finance, Corporate Strategy & Administration, Sallie Mae—2004 to 2006 • Senior Vice President & General Counsel, Sallie Mae; President, Student Loan Marketing Association—1997 to 2004 • Vice President & Associate General Counsel—1990 to 1997; various other positions—1985 to 1997
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2010 to present • Board Chair, Building Hope (Charter school lender) 2004 to present • American University in Bulgaria, Board Chair—2006 to 2014 • Member, Georgetown University Board of Regents—2009 to 2015 • Founding Director, National Student Clearinghouse—1993 to 2009
Directorship of other public companies:
• CubeSmart (NYSE: CUBE)—2007 to present
Ms. Keler’s legal background and experience in the student loan industry and with Sallie Mae bring valuable perspective to the Board of Directors in the areas of student/consumer lending, legal and corporate governance and higher education. | |
| Jim Matheson | Principal, Squire Patton Boggs | |
| 56
Director since March 26, 2015 |
Professional Highlights:
• Principal in the Public Policy Practice, Squire Patton Boggs—2015 to present • Member of the United States House of Representatives—2001 to 2015 • Founder of The Matheson Group—1999 to 2000 • Consultant, Energy Strategies, Inc.—1991 to 1998
Other Professional and Leadership Experience:
• Service on the United States House of Representatives Energy and Commerce Committee—2007 to 2015; Science Committee—2001 to 2011; Financial Services Committee—2003 to 2007; and Transportation and Infrastructure Committee—2001 to 2007 • Chief Deputy Whip for the Democratic Caucus of the United States House of Representatives—2011 to 2015
Mr. Matheson’s extensive experience in public policy and financial services enable him to bring to the Board of Directors a valuable perspective in development of business strategies and on public policy and regulatory matters. |
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| Name and Age Service as a Director |
Position, Principal Occupation, Business Experience and Directorships | |
| Jed H. Pitcher | Former President and Chief Operating Officer at the Regence Group | |
| 75
Director since April 30, 2014 |
Professional Highlights:
• President and Chief Operating Officer of Regence Group, a healthcare insurance provider—2000 to 2004 • Chairman, President and Chief Executive Officer of Regence Blue Cross Blue Shield of Utah Group—1981 to 2000
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2005 to present • Member and Chair, Utah State Board of Regents—2001 to present • Honorary Doctorate, Utah State University—2016 • Director and Chair, Workers Compensation Fund of Utah—1988 to 1997 • Trustee and Chair, Utah State University Board of Trustees—1991 to 1999 • Member and Vice Chair, Salt Lake Area Chamber of Commerce Board of Governors—1992 to 1995 • Director, Westminster College—1987 to 1991
Mr. Pitcher’s extensive leadership experience in the insurance industry and higher education governance and policy-making enables him to bring valuable insight to the Board of Directors in the areas of finance, business operations and corporate governance. | |
| Frank C. Puleo | Attorney | |
| 70
Director since March 20, 2008 |
Professional Highlights:
• Attorney—2006 to present • Co-Chair, Global Finance Group, Milbank, Tweed, Hadley & McCloy LLP, a law firm—1995 to 2006; Partner—1978 to 2006
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2013 to present • Director, South Street Securities (f/k/a CMET Finance) LLC—2008 to present • Director, Syncora Capital Assurance Inc.—2009 to present
Directorships of other public companies:
• Apollo Investment Corporation—2007 to present
Mr. Puleo’s background as a corporate and finance lawyer enables him to bring analytical, legal and financial insight to the Board of Directors in the areas of financial services, capital markets transactions and corporate governance. | |
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| Name and Age Service as a Director |
Position, Principal Occupation, Business Experience and Directorships | |
| Raymond J. Quinlan | Chairman and Chief Executive Officer, Sallie Mae | |
| 64
Director since January 16, 2014 |
Professional Highlights:
• Chairman and Chief Executive Officer, Sallie Mae—April 30, 2014 to present • Vice Chairman, Sallie Mae—January, 2014 to April 30, 2014 • Executive Vice President—Banking, CIT Group—2010 to 2013 • Executive Chairman, Coastal South Bancshares, Inc.—2010 • Business Manager at Goldman Sachs—2007 to 2008 • Chief Executive Officer, Retail Division North America, for Citigroup—2005 to 2007
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2014 to present
Directorships of other public companies:
• Islandsbanki, based in Reykjavik, Iceland—2009 to 2010 • Doral Financial Company—2008 to 2010
Mr. Quinlan’s extensive background and significant leadership experience in the banking industry allow him to provide business and leadership insight to the Board of Directors in the areas of banking, financial services, business operations and capital markets. | |
| Vivian C. Schneck-Last | Former Managing Director, Global Head of Technology Governance, Goldman Sachs & Company | |
| 55
Director since March 26, 2015 |
Professional Highlights:
• Managing Director, Global Head of Technology Governance, Goldman Sachs & Company—2009 to 2014 • Managing Director, Global Head of Technology Business Development, Goldman Sachs & Company—2000 to 2014 • Managing Director, Global Head of Technology Vendor Management, Goldman Sachs & Company—2003 to 2014
Other Professional and Leadership Experience:
• Director, CyberCanary—2015 to present • Director, Bikur Cholim of Manhattan—2014 to present • Committee Member, Jewish Theological Seminary—2012 to 2013
Ms. Schneck-Last’s strategic technology experience and background in technology governance in the financial services field bring valuable perspective to the Board of Directors in risk management and on a broad range of enterprise technology matters. |
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| Name and Age Service as a Director |
Position, Principal Occupation, Business Experience and Directorships | |
| William N. Shiebler | Private Investor | |
| 74
Director since April 30, 2014 |
Professional Highlights:
• Private Investor—2007 to present • Chief Executive Officer of the Americas, Deutsche Asset Management (Deutsche Bank)—2002 to 2007 • President and Chief Executive Officer, Putnam Mutual Funds, Senior Managing Director, Putnam Investments—1990 to 1999
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2010 to present • Trustee, United States Ski and Snowboard Team—2002 to present
Directorships of other public companies:
• Calamos Asset Management, Inc.—2012 to present • OXiGENE, Inc.—2002 to 2012 • MasTec Inc.—2001 to 2004
Mr. Shiebler’s extensive experience in the financial services industry and with other public companies allows him to provide valuable insight to the Board of Directors in the areas of finance, portfolio management and business operations. | |
| Robert S. Strong | Former Managing Director, Chairman, Capital Commitments Committee, Bank of America Securities | |
| 67
Director since April 30, 2014 |
Professional Highlights:
• Managing Director, Chairman, Capital Commitments Committee, Bank of America Securities—2006 to 2007 • Managing Director, Portfolio Management, Bank of America Securities—2001 to 2006 • Executive Vice President, Chief Credit Officer, JP Morgan Chase Bank – 1996 to 2001
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2014 to present • Member, Financial Policy Review Board for the State of New Jersey—2013 to present • Director, CamberLink Inc.—2013 to present • Director, Syncora Capital Assurance Inc.—2009 to present
Mr. Strong’s extensive experience in the banking and financial services industries allows him to provide valuable insight to the Board of Directors in the areas of finance, risk management, portfolio management and business operations. |
Board of Directors Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE TWELVE NOMINEES NAMED ABOVE.
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PROPOSAL 2—ADVISORY VOTE ON EXECUTIVE COMPENSATION
Sallie Mae is asking stockholders to approve an advisory resolution (commonly referred to as a “say-on-pay” resolution) on its executive compensation as reported in this proxy statement. Sallie Mae urges stockholders to read the “Compensation Discussion and Analysis” section (“CD&A”) of this proxy statement, which describes how its executive compensation policies and procedures operate and are designed to achieve its compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, which provide detailed information on the compensation of Sallie Mae’s named executive officers.
The Board of Directors has adopted a policy providing for annual “say-on-pay” advisory votes. In accordance with this policy and Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as a matter of good corporate governance, Sallie Mae is asking stockholders to approve the following advisory resolution at the Annual Meeting:
“Resolved, that Sallie Mae’s stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis and the related compensation tables and narrative disclosure in this proxy statement.”
This proposal to approve the resolution regarding the compensation of Sallie Mae’s named executive officers requires the affirmative vote of the holders of a majority of the Common Stock present, represented and entitled to vote at the Annual Meeting. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including broker non-votes, have no direct effect on the matter. This proposal is advisory in nature and, therefore, is not binding upon the NGC Committee or the Board of Directors. However, the NGC Committee will, as it has done in the past, carefully evaluate the outcome of the vote when considering future executive compensation decisions.
Board of Directors Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THE COMPENSATION DISCUSSION AND ANALYSIS AND THE RELATED COMPENSATION TABLES AND NARRATIVE DISCLOSURE IN THIS PROXY STATEMENT.
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PROPOSAL 3—RATIFICATION OF THE APPOINTMENT OF THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Sallie Mae’s independent registered public accounting firm, KPMG LLP (“KPMG”), is selected by the Audit Committee. The Audit Committee has engaged KPMG as Sallie Mae’s independent registered public accounting firm for the fiscal year ending December 31, 2016. Representatives of KPMG are expected to be present at the Annual Meeting and they will have the opportunity to respond to appropriate questions from stockholders and to make a statement if they desire to do so.
This proposal is put before the stockholders because the Board of Directors believes it is a good corporate governance practice to provide stockholders a vote on ratification of the selection of the independent registered public accounting firm.
For ratification, this proposal will require the affirmative vote of the holders of a majority of the shares of Common Stock present, represented and entitled to vote at the Annual Meeting. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including broker non-votes, have no direct effect on the matter. If the appointment of KPMG is not ratified, the Audit Committee will evaluate the basis for the stockholders’ vote when determining whether to continue the firm’s engagement. Even if the selection of Sallie Mae’s independent registered public accounting firm is ratified, the Audit Committee may direct the appointment of a different independent registered public accounting firm at any time during 2016 if, in its discretion, it determines such a change would be in the Company’s best interests.
Board of Directors Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF KPMG AS SALLIE MAE’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016.
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The following table sets forth the membership and number of meetings held for each committee of the Board of Directors during 2015.
| Audit Committee(1) |
Nominations, Governance and Compensation Committee |
Risk Committee(2) |
Executive and Strategic Planning Committee |
Preferred Stock Committee | ||||||
| Paul G. Child |
* | * | ||||||||
| Carter Warren Franke+ |
* | *** | * | |||||||
| Earl A. Goode |
* | * | X Co-Chair | |||||||
| Ronald F. Hunt+ |
* | ** | ||||||||
| Marianne M. Keler++ |
* | |||||||||
| Jim Matheson |
* | * | ||||||||
| Jed H. Pitcher |
X | * | * | |||||||
| Frank C. Puleo+ |
X | * | ||||||||
| Raymond J. Quinlan+ |
X Co-Chair | |||||||||
| Vivian Schneck-Last |
* | * | * | |||||||
| William N. Shiebler+ |
X | * | * | |||||||
| Robert S. Strong |
* | * | X | |||||||
| Number of Meetings in 2015 |
12 | 11 | 7 | 1 | 1 |
| X | Chair |
| * | Committee Member |
| ** | On September 22, 2015, Mr. Hunt ceased to be a member of the Nominations, Governance and Compensation Committee. |
| *** | On September 22, 2015, Ms. Franke ceased to be a member of the Risk Committee. |
| + | Also serves as a member of the Sallie Mae Bank Compliance Committee. |
| ++ | Also serves as Chair of the Sallie Mae Bank Compliance Committee. |
| (1) | The Board of Directors determined Mr. Child, Mr. Pitcher, and Mr. Strong each qualified as an “Audit Committee Financial Expert” as set forth in Item 407 of Regulation S-K. During 2015, none of the Audit Committee members served on the audit committee of more than three public companies. |
| (2) | The Board of Directors determined Mr. Child, Ms. Warren Franke, Mr. Pitcher, Ms. Schneck-Last, and Mr. Strong each qualified as a “Risk Management Expert” as such term is defined by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and the rules and regulations promulgated thereunder. |
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The Board of Directors and its committees oversee Sallie Mae’s overall strategic direction, including setting risk management philosophy, tolerance and parameters, and establishing procedures for assessing the risks of each business line as well as the risk management practices the management team develops and utilizes. Management escalates to the Board of Directors and its committees any significant departures from established tolerances and parameters and reviews new and emerging risks. The primary risk oversight responsibilities of each of the standing committees of our Board of Directors are as follows:
| Board Committee | Primary Oversight Responsibilities | |
| Audit Committee | • development of financial statements and periodic public reports; • sufficiency of internal controls over financial reporting and disclosure controls; • engagement of, and communications with, our independent registered accounting firm; and • operation of internal audit function, staffing and work plan. | |
| Nominations, Governance and Compensation (“NGC”) Committee | • approve all compensation and benefits for our Chief Executive Officer, Executive Vice Presidents, and independent directors; • approve equity-based compensation plans; • management’s administration of employee benefit plans; • management succession planning; • confirm our compensation practices properly balance risk and reward and do not promote excessive risk-taking; • implement good governance policies and measures for Sallie Mae and our Board of Directors; • recommend nominees for election to the Board of Directors; • conduct assessments of the performance of our Board of Directors and its committees; and • review related party transactions. | |
| Risk Committee | • monitor our major risk categories, including Credit, Funding and Liquidity, Market, Compliance, Legal, Operational, and Reputational; • review our risk management framework and supporting governance structure, roles and responsibilities established by management; and • creation of our risk appetite and regular reviews of key risk measures. | |
| Executive and Strategic Planning Committee | • engage the Chief Executive Officer and senior management in the strategic planning process and recommend proposals regarding the Company’s long-term strategic initiatives. | |
| Preferred Stock Committee | • monitor and evaluate our business activities in light of the rights of holders of the Company’s preferred stock. | |
| Sallie Mae Bank Committees | • All members of the Board of Directors also serve as members of the board of directors of our wholly-owned subsidiary, Sallie Mae Bank (the “Bank”) and its committees. Our Audit, NGC and Risk committees perform similar oversight roles for the Bank. Separately, a Compliance Committee of the Bank Board of Directors has oversight over the establishment of standards related to our monitoring and control of legal and regulatory compliance risks and the qualification of employees overseeing these functions. The chair of the Compliance Committee is Ms. Keler. Other members of the Compliance Committee are: Mr. Hunt; Ms. Franke; Mr. Puleo; Mr. Shiebler; Mr. Quinlan; and Mr. James Truitt, our Chief Compliance Officer. | |
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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee hereby reports as follows:
| 1. | Management has the primary responsibility for the financial statements and the reporting process, including the system of internal accounting controls. The Audit Committee, in its oversight role, has reviewed and discussed the audited financial statements with the Company’s management. |
| 2. | The Audit Committee has discussed with the Company’s internal auditors and the Company’s independent registered public accounting firm the overall scope of, and plans for, their respective audits. The Audit Committee has met with the internal auditors and independent registered public accounting firm, separately and together, with and without management present, to discuss the Company’s financial reporting process and internal accounting controls in addition to any other matters required to be discussed by the statement on Auditing Standards No. 16, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (“PCAOB”), as may be modified or supplemented. |
| 3. | The Audit Committee has received the written disclosures and the letter from KPMG LLP required by applicable requirements of the PCAOB regarding KPMG LLP’s communications with the Audit Committee concerning independence, and has discussed with KPMG LLP its independence. |
| 4. | The Audit Committee has an established charter outlining the practices it follows. The charter is available on the Company’s website at www.salliemae.com under “Investors, Corporate Governance.” |
| 5. | The Company’s Audit Committee has policies and procedures that require the pre-approval by the Audit Committee of all fees paid to, and all services performed by, the Company’s independent registered public accounting firm. At the beginning of each year, the Audit Committee approves the proposed services, including the nature, type and scope of service contemplated and the related fees, to be rendered by the firm during the year. In addition, engagements may arise during the course of the year that are outside the scope of the initial services and fees approved by the Audit Committee. Any such additional engagements are approved by the Audit Committee or by the Audit Committee chair pursuant to authority delegated by the Audit Committee. For each category of proposed service, the independent registered public accounting firm is required to confirm that the provision of such services does not impair its independence. Pursuant to the Sarbanes-Oxley Act of 2002, the fees and services provided as noted in the table below were authorized and approved by the Audit Committee in compliance with the pre-approval policies and procedures described herein. |
| 6. | Based on the review and discussions referred to in paragraphs (1) through (5) above, the Audit Committee recommended to the Board of Directors of the Company, and the Board has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 for filing with the Securities and Exchange Commission. |
Audit Committee
Jed H. Pitcher (Chair)
Paul G. Child
Ronald F. Hunt
Marianne M. Keler
Vivian C. Schneck-Last
Robert S. Strong
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
18
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The following table provides information about each stockholder known to Sallie Mae to beneficially own more than five percent of the outstanding shares of our Common Stock, based solely on the information filed by each such stockholder in 2016 for the year ended December 31, 2015, on Schedule 13G, as amended, as applicable under the Exchange Act. As of February 29, 2016, the Company had 427,557,044 outstanding shares of Common Stock.
| Name and Address of Beneficial Owner |
Shares(1) | Percent(1) | ||||||
| BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10022 |
48,902,329 | 11.5 | % | |||||
| Goldman Sachs Asset Management(3) 200 West Street New York, NY 10282 |
46,799,134 | 11.0 | % | |||||
| FMR LLC(4) 245 Summer Street, Boston, Massachusetts 02210 |
38,307,001 | 8.989 | % | |||||
| Barrow, Hanley, Mewhinney & Strauss, LLC(5) 2200 Ross Avenue 31st Floor Dallas, TX 75201-2761 |
35,918,545 | 8.43 | % | |||||
| Prudential Financial, Inc.(6) 751 Broad Street Newark, New Jersey 07102-3777 |
34,605,945 | 8.1 | % | |||||
| Jennison Associates LLC(7) 466 Lexington Avenue New York, NY 10017 |
34,141,682 | 8.0 | % | |||||
| The Bank of New York Mellon Corporation(8) 225 Liberty Street New York, New York 10286 |
33,112,058 | 7.77 | % | |||||
| (1) | Based on information in the most recent Schedule 13G or Schedule 13G amendment, as the case may be, filed with the Securities and Exchange Commission pursuant to the Exchange Act with respect to holdings of the Company’s Common Stock as of December 31, 2015. Percentages are based on computations contained in the Schedule 13G or Schedule 13G amendment of the reporting entity. |
| (2) | Information is as of December 31, 2015 and is based upon a Schedule 13G/A, filed with the SEC on January 8, 2016, by BlackRock, Inc., a Delaware corporation. The reporting entity reported the sole power to vote or direct the voting for 46,619,932 shares of Common Stock and the sole power to dispose of or direct the disposition of 48,902,329 shares of Common Stock. |
| (3) | Information is as of December 31, 2015 and is based upon a Schedule 13G/A, filed with the SEC on February 10, 2016, by Goldman Sachs Asset Management (Goldman Sachs Asset Management, L.P., together with GS Investment Strategies, LLC, “Goldman Sachs Asset Management”), a Delaware limited partnership. The reporting entity reported shared power to vote or to direct the vote for 40,841,305 shares of Common Stock and shared power to dispose of or direct the disposition of 46,799,134 shares of Common Stock. |
| (4) | Information is as of December 31, 2015 and is based upon a Schedule 13G/A, filed with the SEC on February 12, 2016 by FMR LLC, a Delaware limited liability company, and Abigail P. Johnson, through her control of the subsidiaries of FMR LLC. The reporting entity reported the sole power to direct the voting of 182,422 shares of Common Stock and the sole power to dispose of or direct the disposition of 38,307,001 shares of Common Stock. |
| (5) | Information is as of December 31, 2015 and is based upon a Schedule 13G, filed with the SEC on February 3, 2016, by Barrow, Hanley, Mewhinney & Strauss, LLC, a Delaware limited liability company. The reporting entity reported sole power to vote or direct the vote for 12,803,449 shares of Common Stock, shared power to vote or to direct the vote for 23,115,096 shares of Common Stock and sole power to dispose or to direct the disposition of 35,918,545 shares of Common Stock. |
| (6) | Information is as of December 31, 2015 and is based upon a Schedule 13G/A, filed with the SEC on January 28, 2016, by Prudential Financial, Inc., a New Jersey corporation, and its direct or indirect subsidiaries. The reporting entity reported the sole power to vote or direct the voting for 1,752,950 shares of Common Stock, shared power to vote or direct the voting for 32,420,555 shares of Common Stock, the sole power to dispose of or direct the disposition of 1,752,950 shares of Common Stock, and shared power to dispose of or direct the disposition of 32,852,995 shares of Common Stock. |
| (7) | Information is as of December 31, 2015 and is based upon a Schedule 13G/A, filed with the SEC on February 5, 2016, by Jennison Associates LLC, a Delaware limited liability company. The reporting entity reported the sole power to vote or direct the voting for 33,709,242 shares of Common Stock and shared power to dispose of or direct the disposition of 34,141,682 shares of Common Stock. |
| (8) | Information is as of December 31, 2015 and is based upon a Schedule 13G/A, filed with the SEC on February 2, 2016, by The Bank of New York Mellon Corporation, a New York corporation, and its direct or indirect subsidiaries. The reporting entity reported the sole power to vote or direct the voting for 28,924,014 shares of Common Stock, the sole power to dispose of or direct the disposition of 32,901,777 shares of Common Stock, and shared power to dispose of or direct the disposition of 209,317 shares of Common Stock. |
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OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning the beneficial ownership of Sallie Mae’s Common Stock by: (i) our current directors and nominees; (ii) the NEOs listed in the Summary Compensation Table; and (iii) all of the Company’s current directors and executive officers as a group. Under SEC rules, beneficial ownership for purposes of this table takes into account shares as to which the individual has or shares voting and/or investment power as well as shares that may be acquired within 60 days (such as by exercising vested stock options). Information is provided as of March 31, 2016, unless noted otherwise. The beneficial owners listed have sole voting and investment power with respect to shares beneficially owned, except as to the interests of spouses or as otherwise indicated.
| Shares(1) | Vested Options(2) |
Total Beneficial Ownership |
Percent of Class | |||||||||||
| Director Nominees |
||||||||||||||
| Paul G. Child |
15,540 | 106 | 15,646 | * | ||||||||||
| Carter Warren Franke |
13,887 | — | 13,887 | * | ||||||||||
| Earl A. Goode |
52,095 | 47,748 | 99,843 | * | ||||||||||
| Ronald F. Hunt(3) |
250,809 | 41,748 | 292,557 | * | ||||||||||
| Marianne M. Keler |
38,912 | 871 | 39,783 | * | ||||||||||
| Jim Matheson |
7,834 | — | 7,834 | * | ||||||||||
| Jed H. Pitcher(4) |
20,435 | 1,496 | 21,931 | * | ||||||||||
| Frank C. Puleo |
56,095 | 31,748 | 87,843 | * | ||||||||||
| Raymond J. Quinlan |
1,285,135 | — | 1,285,135 | * | ||||||||||
| Vivian C. Schneck-Last |
7,834 | — | 7,834 | * | ||||||||||
| William N. Shiebler(5) |
16,875 | 801 | 17,676 | * | ||||||||||
| Robert S. Strong |
25,887 | — | 25,887 | * | ||||||||||
| Named Executive Officers |
||||||||||||||
| Laurent C. Lutz |
1,073,650 | 66,139 | 1,139,789 | * | ||||||||||
| Steven J. McGarry(6) |
303,542 | 8,246 | 311,788 | * | ||||||||||
| Charles P. Rocha |
228,372 | 32,792 | 261,164 | * | ||||||||||
| Jeffrey F. Dale |
150,520 | — | 150,520 | * | ||||||||||
| Current Directors and Executive Officers as a Group (18 Persons) |
3,950,405 | 240,281 | 4,190,686 | 0.98% | ||||||||||
| (1) | Includes RSUs that will vest within 60 days of March 31, 2016 as follows: Lutz—22,087; McGarry—5,543; Quinlan—27,963; Rocha—4,927. |
| (2) | Shares that may be acquired within 60 days of March 31, 2016, through exercise of vested stock options. Net settled options are shown on a “spread basis” and if not in-the-money shown as 0. Traditional stock options are included in this column on a one-to-one basis, the majority of which are currently underwater. The number of traditional stock options for each individual are as follows: Mr. Goode—22,600; Mr. Hunt—16,600; Mr. Pitcher—500; and Mr. Puleo—6,600. |
| (3) | Share total includes 48,067 shares credited as phantom stock units to a deferred compensation plan account. |
| (4) | Includes 2,633 shares held in trust. |
| (5) | Includes 1,027 shares held in trust. |
| (6) | Includes 110 shares credited as phantom stock units due to a deferred compensation plan account, and 2,141 shares held in a 401(k) account. |
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Our executive officers are appointed annually by the Board of Directors. The following sets forth biographical information concerning Sallie Mae’s executive officers who are not directors. Biographical information for Mr. Quinlan is included in Proposal 1—Election of Directors.
| Name and Age | Position and Business Experience | |
| Laurent C. Lutz 56 |
• Executive Vice President, General Counsel and Corporate Secretary, SLM Corporation—May 2012 to present; Executive Vice President and General Counsel, SLM Corporation—January 2011 to May 2012 • Chief Legal Officer and Corporate Secretary, BearingPoint, Inc., a global management and technology consulting firm—March 2006 to December 2008. On February 27, 2009, BearingPoint, Inc. filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code | |
| Steven J. McGarry 58 |
• Executive Vice President and Chief Financial Officer, SLM Corporation—May 2014 to present; Senior Vice President—Corporate Finance and Investor Relations, SLM Corporation—June 2013 to April 2014; Senior Vice President—Investor Relations, SLM Corporation—June 2008 to June 2013 | |
| Charles P. Rocha 54 |
• Executive Vice President and Chief Marketing Officer, SLM Corporation—February 2015 to present; Senior Vice President and Chief Marketing Officer, SLM Corporation—February 2013 to February 2015; Senior Vice President—Student Lending Sales & Marketing, SLM Corporation—September 2009 to January 2013 • Senior Vice President—Strategic Integration Executive, Bank of America—2008 to 2009 | |
| Paul F. Thome 65 |
• Executive Vice President and Chief Administrative Officer, SLM Corporation and President of Sallie Mae Bank, February 2016 to present; Senior Vice President SLM Corporation and President of Sallie Mae Bank, January 2011 to February 2016; Senior Vice President—Business Finance, March 2009 to January 2011 • Chief Financial Officer and Co-Founder, Credit One Financial Services LLC, October 2006 to March 2009 • Executive Vice President, MBNA Corporation 1996 to 2006 | |
| Jeffrey F. Dale 54 |
• Senior Vice President and Chief Risk Officer, SLM Corporation—July 2014 to present • North American Group Risk Director, Citigroup—February 2009 to July 2014; Divisional Risk Officer, Lloyds TSB—July 2006 to February 2009 | |
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NOMINATIONS, GOVERNANCE AND COMPENSATION COMMITTEE REPORT
The year ended December 31, 2015 marked another successful year for Sallie Mae. 2015 was our first full year of operations post separation from Navient Corporation (“Navient”). We remain the leader in the Private Education Loan marketplace. Excluding those members of our compensation peer group engaged in significant mergers and acquisitions in 2015(1), for the year we exceeded our compensation peers in earnings per share growth, return on equity, and return on assets.
In 2015, we completed the final steps of our operational separation from Navient, most notably with the implementation of a new originations platform. Our company had a terrific performance year, all the while having made meaningful and deliberate investments to improve the experience of our customers. These investments in our online servicing platform, mobile applications, on-shoring of customer operations, and people development have resulted in a significant improvement in our customer satisfaction metrics. These improvements coupled with our 40% increase in year-over-year earnings per share and gains in market share made 2015 an exceptional year by all measures.
We have worked carefully and deliberately with our management and independent compensation consultant to recognize our employees for their 2015 performance in a manner that reflects the strength of our results. For 2016, we are introducing a new performance stock unit component as part of our long-term incentive compensation program for Named Executive Officers. This program provides yet another tool to align executive compensation with the long-term performance of the Company and our shareholder interests.
These changes in our compensation program have been put in place by our Committee as a way to promote prudent management decision-making and to profitably drive the evolution of our consumer banking business, all while ensuring we motivate, reward, and retain employees.
In conclusion, we have reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based on this review and discussion, we have recommended to the Board of Directors its inclusion herein and its incorporation by reference in the Company’s Annual Report on Form 10-K for the year ending December 31, 2015.
Nominations, Governance and Compensation Committee
William N. Shiebler, Chair
Carter Warren Franke
Earl A. Goode
Jim Matheson
Jed H. Pitcher
| (1) | Bank of the Ozarks, PacWest Bancorp, MB Financial, Inc. and SVB Financial Group. |
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COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
In this Compensation Discussion and Analysis (“CD&A”) we describe our compensation practices and programs in the context of our five most highly compensated executive officers (hereinafter “Named Executive Officers” or “NEOs”). It is worth noting our compensation practices and programs applicable to our NEOs in many cases also apply to senior executive employees beyond our NEOs.
Named Executive Officers
For the fiscal year ended December 31, 2015, our Named Executive Officers were:
| • | Raymond J. Quinlan, Chairman of the Board of Directors and Chief Executive Officer; |
| • | Steven J. McGarry, Executive Vice President and Chief Financial Officer; |
| • | Laurent C. Lutz, Executive Vice President, General Counsel and Corporate Secretary; |
| • | Charles P. Rocha, Executive Vice President and Chief Marketing Officer; and |
| • | Jeffrey F. Dale, Senior Vice President and Chief Risk Officer. |
Achievement of 2015 Management Objectives
The Company met or exceeded most of its financial and operational goals for 2015 and was in the top quartile of its compensation peer group with respect to earnings per share and asset growth, operating efficiency improvements, and returns on equity and assets.
| Management Objective | Highlights | |
| Prudently Grow Private Education Loan Assets and Revenues | • Originated $4.3 billion in new Private Education Loans in 2015, up 6 percent from 2014. • Maintained our average FICO scores and cosigner rates on 2015 originations at levels basically unchanged from year-end 2014 levels. • Sold $1.5 billion of Private Education Loans to third parties, recording gains on sale of $135 million. • Provision expense on our Private Education Loans was $87 million for the year ended December 31, 2015, compared with $84 million in 2014. |
| Actual | Well | |||||||||||
| 2014 Ratio |
2015 Ratio |
2015 Minimum | ||||||||||
| Maintain Our Strong Capital Position |
Tier I Capital (to Average Assets) |
11.5 | % | 12.3 | % ³ | 5.0 percent | ||||||
| Tier 1 Capital (to Risk-Weighted Assets) |
15.0 | % | 14.4 | % ³ | 8.0 percent | |||||||
| Total Capital (to Risk-Weighted Assets) |
15.9 | % | 15.4 | % ³ | 10.0 percent | |||||||
| Common Equity Tier 1 Capital (to Risk-Weighted Assets) |
14.4 | % ³ | 6.5 percent | |||||||||
| Complete Necessary Steps to Permit the Bank to Independently Originate and Service Private Education Loans | • Fully implemented the Bank’s new loan origination platform. • Transitioned all outsourced call center operations from the Philippines to United States locations. • Serviced all of our Private Education Loans with our own post-Spin-Off personnel and platforms. • In the latter half of 2015, developed the ability to retain and collect charged-off loans using our own personnel. | |
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| Management Objective | Highlights | |
| Continue to Expand the Bank’s Capabilities and Enhance Risk Oversight and Internal Controls | • Completed the adoption of the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) with respect to our internal controls over financial reporting. • Enterprise Risk Management program buildout continued and foundation for 2016 Dodd-Frank Act Stress Testing (“DFAST”) submission laid. • Strengthened our Internal Audit function by adding eight additional professional staff, implementing several new automated systems, and significantly increasing the professional certifications of Internal Audit’s staff members. • Redesigned Servicemembers Civil Relief Act process and procedures approved by Department of Justice. • In 2014, we engaged a third-party firm to conduct independent audits of consumer protection processes and procedures, including our own compliance management system. At this time, that engagement is ongoing and we are beginning our second full cycle of those audits. To-date, we have received no high-risk findings. | |
| Manage Operating Expenses While Improving Efficiency and Customer Experience | • Operating expenses, excluding restructuring and other reorganization expenses, were $351 million for the year ended December 31, 2015, as compared to $278 million for the prior year. • Restructuring and other reorganization expenses were $5 million for the year ended December 31, 2015, compared with $38 million for the year ended December 31, 2014. | |
For additional information with regard to each of these objectives and their achievement, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2016.
Compensation Practices Summary
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Chief Executive Officer Compensation Summary for 2015
| • | An annual base salary of $750,000. |
| • | An annual bonus of $1,355,000 paid 50% in cash, 50% in three-year, time-vesting Restricted Stock Units (“RSUs”). |
| • | A long-term equity-based incentive opportunity of $3,000,000 in three-year, time-vesting RSUs. |
| • | Other consideration and benefits valued at $48,250. |
Allocation of Compensation
The NEOs’ total compensation for 2015 consisted of annual base salaries, annual bonuses (determined and paid in cash and RSUs in early 2016), and LTIP awards of RSUs granted in 2015. Set forth below are the 2015 pay mix for these elements for Mr. Quinlan and for Messrs. McGarry, Rocha and Dale as a group.(1)
(1) Pursuant to his employment agreement, Mr. Lutz did not participate in incentive compensation plans in 2015 and has therefore been excluded.
Compensation Philosophy and Elements of Compensation
The pay-for-performance philosophy underlying our executive compensation program provides a competitive total compensation program tied to both Company and individual performance and aligned with the interests of our stockholders. We use the following principles to implement our compensation philosophy and achieve our executive compensation program objectives:
| • | A significant portion of the total compensation of our executives is earned based on achievement of enterprise-wide goals that impact shareholder value. |
| • | Base salaries and benefits that are competitive and permit us to attract, motivate, and retain those executives who drive our success. |
| • | Compensation of our executives is heavily weighted toward long-term equity-based incentives to reward long-term growth and focus management on sustained success and shareholder value creation. |
| • | The interests of our executives should be linked with those of our common stockholders. |
| • | We provide competitive employee benefits and limited perquisites. |
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The compensation program in 2015 for our NEOs consisted of seven elements. These elements, as well as the reasons why each was chosen and the ways in which each achieves our compensation objectives, are described below:
| Compensation Element |
Objective |
Type of Compensation | ||
| Base salary | To provide a base level of cash compensation for senior executives based on level and responsibility. |
Fixed cash compensation. Reviewed annually and adjusted as appropriate. | ||
| Annual incentive bonus | To encourage and reward senior executives for achieving annual corporate performance and individual goals. |
Variable compensation. Annual bonus amounts for 2015 have been determined based on corporate and individual performance components and payable in a combination of cash and RSUs. RSUs are subject to transfer restrictions that lapse in equal increments over a maximum of three years. | ||
| Long-term equity-based incentives | To motivate and retain senior executives by aligning their interests with that of stockholders through sustained performance and growth. |
Multi-year variable compensation. Generally granted annually. In 2015, these grants were made exclusively in RSUs vesting in equal increments over a three-year period. For 2016, these grants consist of 80% RSUs with similar vesting provisions and 20% Performance Stock Units (“PSUs”) vesting based upon cumulative charge-offs of our fourth-quarter 2015 full principal and interest repayment cohort over a three-year performance period further described below in “Changes to NEO Compensation for 2016.” | ||
| Health, Welfare and Retirement benefits | To promote employee health and protect financial security. |
Fixed compensation. Company subsidies and matching contributions, respectively. | ||
| Deferred Compensation Plan and Supplemental 401(k) Savings Plan | To provide retirement planning opportunities. |
Provided benefit. The Sallie Mae Deferred Compensation Plan (the “Deferred Compensation Plan”) and the Supplemental 401(k) Savings Plan provide our highly compensated executives with a vehicle into which they can opt to defer a portion of their compensation for retirement. These opportunities are provided in lieu of any pension benefit plans. | ||
| Severance benefits | To maintain continuity of management in light of major restructurings or after a change of control and provide temporary income following involuntary terminations of employment other than for cause. |
Fixed cash compensation-based severance payments. Equity awards generally continue to vest on their terms after changes of control or involuntary terminations other than for cause. For more information, see “Arrangements with Named Executive Officers below. | ||
| Perquisites | To provide business-related benefits to assist in attracting and retaining key executives. |
Fixed compensation. Consists primarily of reimbursement of ordinary and reasonable business expenses, executive physical examinations and, in limited instances, directed charitable giving made by an affiliate, The Sallie Mae Fund, upon request of our employees, for charities that align with our mission. | ||
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How Our Compensation Decisions Are Made
| Participant | Roles | |
| Board of Directors |
• Independent members establish Chief Executive Officer’s compensation based on findings and recommendations of NGC Committee and Lead Independent Director. • Receives report from NGC Committee with respect to annual Management Incentive Plan (“MIP”) target achievement and bonus pool funding. | |
| NGC Committee |
• Sets annual MIP targets and approves NEO individual performance goals at the beginning of each year. • Establishes annual long-term equity-based incentive plan awards for senior executives, including NEOs, and establishes related performance-based metrics. • Retains independent compensation consultant on annual basis. • Establishes peer group for comparative compensation data purposes. • Participates with Lead Independent Director in the annual performance and compensation review of Chief Executive Officer and recommendation to the Board of Directors. • Reviews and approves all aspects of NEO compensation. • Certifies annual achievement of MIP targets, aggregate MIP bonus pool, and NEO individual performance goals. | |
| Lead Independent Director |
• Participates in development and delivery of Chief Executive Officer’s performance and compensation review. | |
| NGC Committee Chair |
• Participates in development and delivery of Chief Executive Officer’s performance and compensation review. • Participates with Chief Executive Officer in final review and approval of all individual MIP and long-term incentive awards to all eligible senior executives other than NEOs. | |
| Chief Executive Officer |
• Reviews performance of all other NEOs with NGC Committee and makes recommendations with regard to their salaries, bonuses, and long-term incentive awards. • Participates with NGC Committee Chair in final review and approval of all individual MIP and long-term incentive awards to all eligible senior executives other than NEOs. | |
| Compensation Consultant |
• Assists the NGC Committee in the review and oversight of all aspects of our executive compensation programs, particularly as relates to the development and interpretation of peer group membership, compensation data, and the design and implementation of executive compensation programs in light of prevailing regulatory and market practices. | |
| Chief Risk Officer |
• The adoption of any proposed employee incentive compensation plan requires the Chief Risk Officer (“CRO”) to first conduct a risk assessment of the proposed incentive compensation plan to ascertain any potential material risks that may be created by the proposed plan. | |
In establishing compensation levels, policies, and performance for 2015, the NGC Committee also considered the results of the annual “say-on-pay” advisory vote of stockholders, which received the approval of approximately 87 percent of the shares present in person or represented by proxy and entitled to vote on the matter at our 2015 annual meeting of stockholders.
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Risk Assessment of Compensation Policies
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Changes to NEO Compensation for 2016
| Change | Summary | |
| Introducing New MIP Metrics for 2016 |
• We are adding an overall customer satisfaction component to our existing MIP metrics. • We are changing our existing Private Education Loan Default metric to be monitored on a gross default basis, rather than a net default basis to exclude the impact of defaulted loan collections from the performance of our portfolio. | |
| Performance Stock Units (“PSUs”) Introduced for NEO Long-Term Incentive Awards | • We are replacing approximately 20% of the three-year, time-vesting RSUs awarded to our NEOs with PSUs that: • vest over a range of 0%—150% based on the level of cumulative charge-offs from 2016-2018 on the fourth quarter 2015 cohort of Private Education Loans then entering full principal and interest repayment; and • have the NGC Committee approve the determination of actual performance relative to pre-established targets. | |
| Changes to Composition of Annual Bonuses | • We will continue to require our NEOs, Controller, Bank President, and Senior Vice President-Credit and Collections to receive a portion of their annual bonuses in vested RSUs with three-year, ratably lapsing transfer restrictions. • For our other MIP participant employees, annual bonuses will be paid currently in cash to better align with industry practices. | |
We believe that emphasis on maintaining the credit quality of our Private Education Loans over the next three years is the most important and consistent metric of our business model over this timeframe. We have selected cumulative charge-offs against our fourth-quarter 2015 full principal and interest repayment cohort as the relevant PSU credit quality metric, as loans in this cohort going into full principal and interest repayment during the fourth quarter 2015 are the first to do so since our complete operational separation from Navient in the Spin-Off.
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2015 Management Incentive Plan for Named Executive Officers (“2015 MIP”)
The 2015 MIP used Core Earnings Per Share (“Core EPS”) as the performance metric for establishing its funding pool. A combination of corporate metrics and individual performance goals were then used to guide the NGC Committee in its exercise of downward discretion for determining the final awards to the NEOs. For the NEOs, the corporate and individual performance components of their bonus targets were 80% and 20%, respectively.
For the corporate portion of the 2015 MIP, five corporate performance metrics were utilized. These metrics were derived from management’s 2015 objectives identified in Sallie Mae’s annual business plan. Those metrics were:
| • | “Core Earnings Per Share”(1) |
| • | Private Education Loan Originations; |
| • | Operating Expenses; |
| • | Net Private Education Loan Defaults as a Percentage of Average Loan Balances in Full Principal and Interest Repayment; and |
| • | Weighted Average Origination FICO Scores. |
Minimum, target, and maximum achievement levels were set for each performance metric and a weight assigned to each performance metric based on its relative importance to the Company’s overall operating plan. Unless otherwise limited by an employment agreement, our NEOs are each eligible to receive bonuses up to a stated maximum percentage of their base salary.
In January 2016, the NGC Committee and the Lead Independent Director reviewed our relative achievement of the previously identified bonus pool funding and approved corporate performance metrics and, after discussions with our Chief Executive Officer, determined that for the year ended December 31, 2015 (i) the bonus pool funding should be at the maximum level based on the achievement of Core EPS of $0.59 and (ii) the weighted achievement of the 2015 MIP corporate performance metrics was attained at a level of 113.3 percent of the targets set under the 2015 MIP.
To determine final awards, the NGC Committee exercised downward discretion from the bonus pool funding level to reduce the NEOs’ bonus payouts under the 2015 MIP funding pool to more precisely correlate the achievement of the relative percentages of both corporate and individual performance components applicable to each NEO. The following chart provides more information on the computation of the corporate performance score.
| Corporate Performance Goal |
Target | Actual Performance |
Award Factor |
Weighting | Corporate Performance Score |
|||||||||||||||
| Core Earnings Per Share |
$ | 0.49 | $ | 0.59 | 150.0 | % | 35 | % | 52.50 | % | ||||||||||
| Private Education Loan Originations |
$ | 4,300 | $ | 4,334.5 | 103.5 | % | 25 | % | 25.88 | % | ||||||||||
| Operating Expenses |
$ | 325 | $ | 350.4 | 68.7 | % | 25 | % | 17.18 | % | ||||||||||
| Net Private Education Loan Defaults (as % of Average Loan Balances in Full Repayment) |
1.10 | % | 0.82 | % | 128.0 | % | 10 | % | 12.80 | % | ||||||||||
| Weighted Average 2015 Originations FICO Scores |
745 | 748 | 100.0 | % | 5 | % | 5.00 | % | ||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Total |
113.3 | % | ||||||||||||||||||
|
|
|
|||||||||||||||||||
| (1) | For a description of how we calculate “Core Earnings” and for a reconciliation of “Core Earnings” to the nearest comparable GAAP measure, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Core Earnings” in the Company’s 2015 Form 10-K. |
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Applying the corporate performance score of 113.3 percent and the NGC Committee’s assessment of NEO individual achievement, the bonus payment to each NEO under the NEO MIP and their components are set forth below.
| Named Executive Officer |
Target Bonus as a % of Base Salary |
2015 Target Bonus $ Amount |
2015 Corporate Performance Bonus Component(1) |
2015 Individual Performance Bonus Component(1) |
2015 Total Bonus |
|||||||||||||||
| Raymond J. Quinlan |
150 | % | $ | 1,125,000 | $ | 1,019,700 | $ | 335,300 | $ | 1,355,000 | ||||||||||
| Steven J. McGarry |
150 | % | $ | 600,000 | $ | 543,840 | $ | 121,160 | $ | 665,000 | ||||||||||
| Laurent C. Lutz(2) |
— | $ | — | $ | — | $ | — | $ | — | |||||||||||
| Charles P. Rocha |
150 | % | $ | 600,000 | $ | 543,840 | $ | 121,160 | $ | 665,000 | ||||||||||
| Jeffrey F. Dale |
100 | % | $ | 400,000 | $ | 362,560 | $ | 82,440 | $ | 445,000 | ||||||||||
| (1) | For the NEOs, the corporate and individual performance components of their bonus targets were 80% and 20%, respectively. |
| (2) | Pursuant to his employment agreement, Mr. Lutz was not eligible for participation in the 2015 MIP. |
The NGC Committee’s assessment of NEO individual achievement considered the following:
NEO Long-Term Incentive Programs
As previously described, 2015 LTIP awards consisted of three-year, time-vesting RSUs granted in early 2015. For 2016, the NGC Committee utilized a combination of (i) 80% RSUs vesting in one-third increments over each anniversary of the grant dates of the RSUs, and (ii) 20% PSUs vesting in 2019 upon certification by the NGC Committee as to satisfaction of the performance factor.
LTIP awards are treated as compensation in the year granted. 2016 LTIP awards information is provided for context regarding NEO compensation decisions taken after year-end and unrelated to 2015 performance.
| Named Executive Officer |
2015 LTIP RSUs ($) |
2016 LTIP RSUs ($) |
2016 LTIP PSUs(1) ($) |
|||||||||
| Raymond J. Quinlan |
3,000,000 | 2,700,000 | 675,000 | |||||||||
| Steven J. McGarry |
480,000 | 400,000 | 100,000 | |||||||||
| Laurent C. Lutz(2) |
— | — | — | |||||||||
| Charles P. Rocha |
375,000 | 380,000 | 95,000 | |||||||||
| Jeffrey F. Dale |
300,000 | 300,000 | 75,000 | |||||||||
| (1) | PSUs granted in 2016 to NEOs are disclosed in this column at the target level. PSUs will vest over a range of 0%-150% based on the level of cumulative charge-offs for 2016 – 2018 from the fourth quarter 2015 cohort of Private Education Loans entering full principal and interest repayment. |
| (2) | Pursuant to the terms of his employment agreement, Mr. Lutz is ineligible for long-term incentive awards in 2015 and 2016. |
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The table below summarizes compensation paid or awarded to or earned by each of the NEOs for the fiscal years ended December 31, 2015, December 31, 2014 and December 31, 2013.
| Name and Principal Position |
Year | Salary ($) |
Bonus ($)(1) |
Stock Awards ($)(2) |
Option Awards ($)(3) |
Non-Equity Incentive Plan Compensation ($)(4) |
Change
in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) |
All Other Compensation ($)(6) |
Total ($) |
|||||||||||||||||||||||||||
| Raymond J. Quinlan |
2015 | 750,000 | — | 3,677,494 | — | 677,500 | — | 48,250 | 5,153,244 | |||||||||||||||||||||||||||
| Chairman and Chief Executive Officer |
2014 | 600,000 | 60,000 | 4,244,971 | — | 675,000 | — | 1,238 | 5,581,208 | |||||||||||||||||||||||||||
| 2013 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Steven J. McGarry |
2015 | 400,000 | — | 812,492 | — | 332,500 | — | 30,894 | 1,575,886 | |||||||||||||||||||||||||||
| Executive Vice President and Chief Financial Officer |
2014 | 375,000 | 27,500 | 732,484 | — | 282,500 | — | 47,877 | 1,465,361 | |||||||||||||||||||||||||||
| 2013 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Laurent C. Lutz |
2015 | 525,000 | — | — | — | — | — | 23,192 | 548,192 | |||||||||||||||||||||||||||
| Executive Vice President, |
2014 | 525,000 | 1,650,000 | 10,945,396 | — | 146,928 | — | 13,000 | 13,280,324 | |||||||||||||||||||||||||||
| General Counsel & Corporate Secretary |
2013 | 525,000 | — | 1,552,910 | 597,604 | 357,525 | — | 132,593 | 3,165,632 | |||||||||||||||||||||||||||
| Charles P. Rocha |
2015 | 400,000 | — | 707,493 | — | 332,500 | — | 38,250 | 1,478,243 | |||||||||||||||||||||||||||
| Executive Vice President and Chief Marketing Officer |
2014 | 375,000 | 32,500 | 599,009 | — | 385,983 | — | 32,437 | 1,424,928 | |||||||||||||||||||||||||||
| 2013 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Jeffrey F. Dale |
2015 | 400,000 | — | 477,994 | — | 267,000 | — | 12,635 | 1,157,629 | |||||||||||||||||||||||||||
| Senior Vice President and Chief Risk Officer |
2014 | 400,000 | 410,000 | 339,988 | — | — | — | 74,765 | 1,224,753 | |||||||||||||||||||||||||||
| 2013 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| (1) | Consists of (i) the pre-Spin-Off bonuses paid to Messrs. Quinlan and Lutz, for the account of Navient, and the post-Spin-Off bonuses paid to Messrs. McGarry and Rocha for the Company’s account, in recognition of their respective contributions to the successful completion of the Spin-Off; (ii) the retention bonus paid to Mr. Lutz in cash; (iii) special bonus paid to Mr. Lutz, for the account of Navient, in recognition of his additional responsibilities and contributions to the Company during 2014; and (iv) the portion of Mr. Dale’s signing bonus payable in cash, which vested in equal increments during the first quarters of 2015 and 2016. In addition Mr. Dale’s 2014 MIP award had a guaranteed minimum payment of $350,000, of which 60 percent was paid in cash and 40 percent was deferred in the form of vested RSUs. |
| (2) | Consists of (i) the portions of the MIP awards that were deferred in the form of vested RSUs with respect to performance for 2015, 2014 and 2013; (ii) the PSUs granted to NEOs under the 2012 Plan in 2013 and 2012, which were converted to RSUs during 2014; (iii) the RSUs granted to Mr. Lutz in 2014 to replace the aforementioned PSUs; (iv) the NEOs’ 2014 long-term incentive awards of RSUs; (v) in Mr. Lutz’s case, a three-year cliff-vesting grant of RSUs; (vi) in Mr. Quinlan’s and Mr. Dale’s case, the RSUs granted pursuant to their respective offer letters; and (vii) the NEOs’ 2015 long-term incentive awards of RSUs. The vested RSU portions of the MIP awards carry transfer restrictions that lapse in equal increments over the next three years following the grant date. The amounts shown are the grant date fair values of the RSUs granted during 2015 and 2014 and the PSUs and RSUs granted during 2013, in each case computed in accordance with the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 718. Additional details on accounting for stock-based compensation can be found in “Note 2—Significant Accounting Policies” and “Note 14—Stock-Based Compensation Plans and Arrangements” to the audited consolidated financial statements included in the Company’s 2015 Form 10-K. In general, equity awards held by the NEOs at the time of the Spin-Off have been adjusted, depending on the date of the original grant, either by increasing the number of shares of Sallie Mae Common Stock covered by the award or by issuing a corresponding, additional Navient equity award, in each case in an effort to preserve the value of the original equity awards. These anti-dilution adjustments have no impact on the amounts set forth in the table. |
| (3) | The Company did not grant stock options during 2015 and 2014, and the amounts shown in the table are the grant date fair values of stock options granted during 2013. As discussed above, the NEOs’ outstanding stock option awards were adjusted in connection with the Spin-Off. Because these anti-dilution adjustments are meant to maintain the intrinsic value of the existing pre-Spin-Off awards pursuant to the terms of the 2012 Plan, they have no impact on the amounts set forth in the table. |
| (4) | Represents the cash portions of the MIP awards paid to the NEOs with respect to performance in 2015, 2014 and 2013. Messrs. Quinlan, McGarry, and Rocha’s 2015 MIP awards were paid 50 percent in cash and 50 percent in vested RSUs. Mr. Dale’s 2015 MIP award was paid 60 percent in cash and 40 percent in vested RSUs. The grant date fair values of the RSU portions of the annual incentive awards that were granted in February 2015, 2014 and 2013 are reflected in the Stock Awards column. |
| (5) | The Company terminated its tax-qualified pension plan and non-qualified supplemental pension plan in 2011. The Company does not pay any above-market earnings on non-qualified deferred compensation plans. |
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| (6) | For 2015, the components of “All Other Compensation” are as follows: |
| Name |
Employer Contributions to Defined Contribution Plans ($)(a) |
Severance ($) |
Relocation Allowance ($) |
Perquisites ($)(b) |
Total ($) |
|||||||||||||||
| Raymond J. Quinlan |
13,250 | — | — | 35,000 | 48,250 | |||||||||||||||
| Steve J. McGarry |
30,894 | — | — | — | 30,894 | |||||||||||||||
| Laurent C. Lutz |
13,192 | — | — | 10,000 | 23,192 | |||||||||||||||
| Charles P. Rocha |
38,250 | — | — | — | 38,250 | |||||||||||||||
| Jeffrey F. Dale |
12,635 | — | — | — | 12,635 | |||||||||||||||
| (a) | Amounts credited to the Company’s tax-qualified and non-qualified defined contribution plans. The combination of both plans provides participants with an employer contribution of up to five percent of the sum of base salary plus annual performance bonus up to $750,000 of total eligible plan compensation. |
| (b) | The Sallie Mae Fund, an affiliate of the Company, made a charitable donation at the request of Mr. Quinlan in the amount of $35,000; and at the request of Mr. Lutz in the amount of $10,000. |
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2015 GRANTS OF PLAN-BASED AWARDS TABLE
The following table provides information regarding all plan-based awards attributable to 2015 performance, including all annual performance bonuses under the 2015 MIP (which were determined in early 2016) and three-year, time-vested RSU awards granted February 10, 2015 with respect to the 2015 LTIP awards. The awards listed in the table were granted under the 2012 Plan and are described in more detail in “Compensation Discussion and Analysis.”
| Name |
Grant Date |
Estimated Future Payouts Under |
Estimated Future Payouts under Equity Incentive Plan Awards |
All Other Stock Awards: Number of Shares of Stock or Units (#) |
All Other Option Awards: Number of Securities Underlying Options (#) |
Exercise or Base Price of Option Awards ($/Share) |
Grant Date Fair Value of Stock and Option Awards ($)(2) |
|||||||||||||||||||||||||||||||||||
| Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
|||||||||||||||||||||||||||||||||||||
| Raymond J. Quinlan |
2015 LTIP | — | — | — | — | — | 317,460 | — | — | 2,999,997 | ||||||||||||||||||||||||||||||||
| 2015 MIP(1) | 0 | 562,500 | 677,500 | — | — | — | 113,865 | — | — | 677,497 | ||||||||||||||||||||||||||||||||
| Steven J. McGarry |
2015 LTIP | — | — | — | — | — | — | 50,793 | — | — | 479,994 | |||||||||||||||||||||||||||||||
| 2015 MIP(1) | 0 | 300,000 | 332,500 | — | — | — | 55,882 | — | — | 332,498 | ||||||||||||||||||||||||||||||||
| Laurent C. Lutz |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Charles P. Rocha |
2015 LTIP | — | — | — | — | — | — | 39,682 | — | — | 374,995 | |||||||||||||||||||||||||||||||
| 2015 MIP(1) | 0 | 300,000 | 332,500 | — | — | — | 55,882 | — | — | 332,498 | ||||||||||||||||||||||||||||||||
| Jeffrey F. Dale |
2015 LTIP | — | — | — | — | — | — | 31,746 | — | — | 300,000 | |||||||||||||||||||||||||||||||
| 2015 MIP(1) | 0 | 240,000 | 267,000 | — | — | — | 29,915 | — | — | 177,994 | ||||||||||||||||||||||||||||||||
| (1) | This row represents the actual payouts for each NEO under the 2015 MIP awards granted on February 26, 2016 and partially paid in cash and partially deferred in the form of fully vested RSUs with transfer restrictions incrementally lapsing over three years. The “Target” set forth in the “Estimated Future Payouts under Non-Equity Incentive Plan Awards” constitutes that portion of each NEO’s target bonus potentially payable in cash. The “Maximum” amounts shown in the “Estimated Future Payouts under Non-Equity Incentive Plan Awards” column represent the portions of the 2015 MIP that was paid in cash to each of the NEOs. The number of shares shown in the “All Other Stock Awards: Number of Shares of Stock or Units” column represents the portions of the 2015 MIP deferred in the form of previously described, fully-vested RSUs. For additional information regarding the computation and determination of cash and RSU portions of these awards, see footnote 4 to the Summary Compensation Table. |
| All determinations under the 2015 MIP and all associated payments, have been made prior to the distribution of this proxy statement. While the NGC Committee certifies the funding, corporate and individual performance levels, it also retains and applies discretion, particularly as to the individual performance levels. Consequently, the sum of the dollar amounts contained in the 2015 MIP row under “Estimated Future Payouts under Non-Equity Incentive Plan Awards” and “Grant Date Fair Value of Stock and Options Awards” constitute the final, total dollar amount of the 2015 MIP awards. |
| (2) | The grant date fair value of the RSU awards is determined by multiplying the original number of RSUs granted by the closing price of the Company’s Common Stock on the grant date. The Company did not issue fractional RSUs to account for the number between the grant date fair value and the amount approved by the NGC Committee. No discounts have been applied to reflect the delayed vesting of these awards. |
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OUTSTANDING EQUITY AWARDS AT 2015 FISCAL YEAR-END TABLE
The table below sets forth information regarding Company options and stock awards of the NEOs that were outstanding as of December 31, 2015.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||
| Name | Grant Date | Number
of (#) |
Number
of (#)(1) |
Option Exercise ($) |
Option Expiration Date |
Number of (#)(2) |
Market Value of Shares or Units of Stock That Have Not Vested ($)(3) |
|||||||||||||||||||||
| Raymond J. Quinlan |
— | — | — | — | 551,637 | 3,596,673 | ||||||||||||||||||||||
| Steven J. McGarry |
01/27/2011 | 30,000 | — | 5.2430 | 1/27/2021 | |||||||||||||||||||||||
| 02/03/2012 | 30,272 | — | 5.7343 | 2/3/2017 | ||||||||||||||||||||||||
| 02/07/2013 | 29,837 | 14,918 | 6.4228 | 2/7/2018 | ||||||||||||||||||||||||
| — | — | — | — | 92,421 | 602,585 | |||||||||||||||||||||||
| Laurent C. Lutz |
01/27/2011 | 200,000 | — | 4.5939 | 1/5/2021 | |||||||||||||||||||||||
| 02/03/2012 | 107,775 | — | 5.7343 | 2/3/2017 | ||||||||||||||||||||||||
| 02/07/2013 | 120,973 | 60,486 | 6.4228 | 2/7/2018 | ||||||||||||||||||||||||
| — | — | — | — | 828,950 | 5,404,754 | |||||||||||||||||||||||
| Charles P. Rocha |
09/28/2009 | 46,500 | — | 3.1558 | 9/28/2019 | |||||||||||||||||||||||
| 01/27/2010 | 35,000 | — | 5.2430 | 1/27/2021 | ||||||||||||||||||||||||
| 02/03/2012 | 32,727 | — | 5.7343 | 2/3/2017 | ||||||||||||||||||||||||
| 02/07/2013 | 28,382 | 14,191 | 6.4228 | 2/7/2018 | ||||||||||||||||||||||||
| — | — | — | — | 77,002 | 502,055 | |||||||||||||||||||||||
| Jeffrey F. Dale |
— | — | — | — | 47,618 | 310,469 | ||||||||||||||||||||||
| (1) | Options granted in 2011 to Messrs. McGarry, Lutz, and Rocha were fully vested as of January 27, 2014. Options granted in 2012 to Messrs. McGarry, Lutz, and Rocha were fully vested as of February 3, 2015. The remaining options reported in this column were granted in 2013 to Messrs. McGarry, Lutz, and Rocha and have vested as follows: one-third of the options vest on each of the first, second and third anniversaries of the grant date, subject in all respects to the following additional vesting conditions: (1) the first one-third of the options will have no additional vesting target other than the passage of the one-year period from the grant date; (2) the second one-third of the options will vest if the closing price of the Company’s Common Stock on the NASDAQ meets or exceeds $19 per share for any five consecutive days at any time after the grant date; and (3) the third one-third of the options will vest if the closing price of the Company’s Common Stock on the NASDAQ meets or exceeds $21 per share for any five consecutive days at any time after the grant date. The stock price targets relating to these 2013 option awards were achieved prior to the Spin-Off and the 2013 option awards were fully vested as of February 7, 2016. |
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Table of Contents
| (2) | The vesting dates of the NEOs’ unvested RSU awards that were outstanding as of December 31, 2015 are: |
| Name | Grant Date | # of RSUs Underlying |
# of RSUs Vesting - Vesting Date 2016 |
# of RSUs Vesting - Vesting |
# of RSUs Vesting - Vesting Date 2018 | |||||||||
| Raymond J. Quinlan |
01/21/2014 | 149,549 | 49,850 - 12/31 | — | — | |||||||||
| 02/04/2014 | 192,604 | 64,201 - 2/4 | 64,202 - 2/4 | — | ||||||||||
| 05/01/2014 | 83,887 | 27,962 - 5/1 | 27,963 - 5/1 | — | ||||||||||
| 02/10/2015 | 317,460 | 105,820 - 2/10 | 105,820 - 2/10 | 105,820 - 2/10 | ||||||||||
| Steven J. McGarry |
02/07/2013 | 15,262 | 5,087 - 2/7 | — | — | |||||||||
| 02/04/2014 | 38,181 | 12,727 - 2/4 | 12,727 - 2/4 | — | ||||||||||
| 05/01/2014 | 16,629 | 5,543 - 5/1 | 5,543 - 5/1 | — | ||||||||||
| 02/10/2015 | 50,793 | 16,931 - 2/10 | 16,931 - 2/10 | 16,931 - 2/10 | ||||||||||
| Laurent C. Lutz |
02/04/2014 | 152,131 | 50,710 - 2/4 | 50,711 - 2/4 | — | |||||||||
| 04/21/2014 | 63,804 | 63,804(a) | — | — | ||||||||||
| 04/21/2014 | 619,551 | — | 619,551 - 11/30 | — | ||||||||||
| 05/01/2014 | 66,260 | 22,087 - 5/1 | 22,087 - 5/1 | — | ||||||||||
| Charles P. Rocha |
02/07/2013 | 14,517 | 4,839 - 2/7 | — | — | |||||||||
| 02/04/2014 | 33,940 | 11,313 - 2/4 | 11,314 - 2/4 | — | ||||||||||
| 05/01/2014 | 14,781 | 4,927 - 5/1 | 4,927 - 5/1 | — | ||||||||||
| 02/10/2015 | 39,682 | 13,227 - 2/10 | 13,227 - 2/10 | 13,228 - 2/10 | ||||||||||
| Jeffrey F. Dale |
07/10/2014 | 23,809 | 7,936 - 7/10 | 7,936 - 7/10 | — | |||||||||
| 02/10/2015 | 31,746 | 10,582 - 2/10 | 10,582 - 2/10 | 10,582 - 2/10 | ||||||||||
| (a) | These RSUs were issued to replace the PSUs granted in 2013 that were terminated in connection with the Spin-Off. These RSUs vested on the second business day following the date on which the Company’s Annual Report on Form 10-K for fiscal year 2015 was filed. |
| (3) | Market value of shares or units is calculated based on the closing price of the Company’s Common Stock on December 31, 2015 of $6.52. |
OPTION EXERCISES AND STOCK VESTED IN 2015
| Option Awards | Stock Awards | |||||||||||||||
| Name | Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($) |
Number of Shares Acquired on Vesting (#)(1) |
Value Realized on Vesting ($)(2) |
||||||||||||
| Raymond J. Quinlan |
— | — | 256,543 | 1,909,762 | ||||||||||||
| Steven J. McGarry |
— | — | 84,978 | 612,915 | ||||||||||||
| Laurent C. Lutz |
— | — | 186,086 | 1,610,351 | ||||||||||||
| Charles P. Rocha |
— | — | 83,130 | 594,718 | ||||||||||||
| Jeffrey F. Dale |
— | — | 37,851 | 256,481 | ||||||||||||
| (1) | Includes vested RSUs received as a portion of 2015 MIP Payout in February 2016 for 2015 performance. These vested RSUs carry transfer restrictions detailed in the Summary Compensation Table footnotes of this proxy statement. |
| (2) | The value realized on vesting is the number of shares vested multiplied by the closing market price of the Company’s Common Stock on the vesting date. |
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EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information as of December 31, 2015, relating to equity compensation plans or arrangements of the Company pursuant to which options, restricted stock, RSUs, stock units or other rights to acquire shares may be granted from time to time.
| Name |
Number of securities to be issued upon exercise of outstanding options and rights(1) |
Weighted average exercise price of outstanding options and rights |
Average remaining life (years) of options outstanding |
Number of securities remaining available for future issuance under equity compensation plans |
Types of awards issuable(2) | |||||||||||||
| Equity compensation plans approved by security holders: |
||||||||||||||||||
| SLM Corporation 2012 Omnibus Incentive Plan |
NQ, ISO, PSU, SAR, RES, RSU, ST | |||||||||||||||||
| Traditional options |
— | — | — | |||||||||||||||
| Net-settled options |
40,474 | $ | 6.44 | 2.1 | ||||||||||||||
| RSUs/RES |
5,926,562 | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
5,967,036 | 6.44 | 2.1 | 29,448,023 | ||||||||||||||
|
|
||||||||||||||||||
| Employee Stock Purchase Plan(3) |
— | — | — | 15,163,078 | NQ, RES | |||||||||||||
|
|
||||||||||||||||||
| Expired Plans(4) |
NQ, ISO, RES, RSU, SU | |||||||||||||||||
| Traditional options |
— | 15.63 | 1.0 | |||||||||||||||
| Net-settled options |
1,509,164 | 7.51 | 2.6 | |||||||||||||||
| RSUs/PSUs |
— | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
1,509,164 | 7.81 | 2.5 | — | ||||||||||||||
|
|
||||||||||||||||||
| Total approved by security holders |
7,476,200 | 7.49 | 2.4 | 44,611,101 | ||||||||||||||
|
|
||||||||||||||||||
| Equity compensation plans not approved by security holders: |
||||||||||||||||||
| Compensation arrangements(5) |
48,450 | 6.20 | 2.0 | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
| Total not approved by security holders |
48,450 | 6.20 | 2.0 | — | ||||||||||||||
|
|
||||||||||||||||||
| Total |
7,524,650 | $ | 10.08 | 2.4 | 44,611,101 | |||||||||||||
|
|
||||||||||||||||||
| (1) | Upon exercise of a net-settled option, optionees are entitled to receive the spread shares only. The spread shares equal the gross number of options granted less shares for the option cost. Accordingly, this column reflects the net-settled option spread shares issuable at December 31, 2015, where provided. Net-settled options that are underwater are excluded from this table because their issuance would have an anti-dilutive effect. |
| (2) | NQ (Non-Qualified Stock Option), ISO (Incentive Stock Option), PSU (Performance Stock Unit), SAR (Stock Appreciation Rights), RES (Restricted/Performance Stock), RSU (Restricted Stock Unit), ST (Stock Awards), SU (Stock Units). |
| (3) | Number of shares available for issuance under the Employee Stock Purchase Plan (ESPP) as of December 31, 2015. The ESPP was amended and restated on June 25, 2014, and amended on June 25, 2015. |
| (4) | Excludes 311,870 traditional options from this table because they are underwater and their issuance would have an anti-dilutive effect. Expired plans with outstanding equity awards are the SLM Corporation Directors Stock Plan, SLM Corporation Incentive Plan, SLM Corporation 2009-2012 Incentive Plan, and SLM Corporation Directors Equity Plan. |
| (5) | One million net-settled options were awarded on January 8, 2008 to John F. Remondi, the Company’s former chief executive officer, as an “employment inducement award.” Upon exercise of a net-settled option, Mr. Remondi is entitled to receive the spread shares only. The spread shares equal the gross number of options granted less shares for the option cost. Accordingly, this row reflects the net-settled option spread shares issuable at December 31, 2015. |
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Table of Contents
NON-QUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR 2015
| Name |
Plan Name |
Executive Contributions in Last FY ($) |
Registrant Contributions in Last FY(1) ($) |
Aggregate Earnings in Last FY ($) |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Balance at Last FYE ($) |
||||||||||||||||
| Raymond J. Quinlan |
— | — | — | — | — | — | ||||||||||||||||
| Steven J. McGarry |
DC Plan Supplemental 401(k) |
|
— 17,644 |
|
|
— 17,644 |
|
|
(717 260 |
)
|
|
4,336 — |
|
|
26,381 115,164 |
| ||||||
| Laurent C. Lutz |
DC Plan | — | — | — | 160,187 | — | ||||||||||||||||
| Charles P. Rocha |
Supplemental 401(k) | 25,000 | 25,000 | (2,148 | ) | — | 87,806 | |||||||||||||||
| Jeffrey F. Dale |
— | — | — | — | — | — | ||||||||||||||||
| (1) | Registrant Contributions listed here are included under the heading “Employer Contributions to Defined Contribution Plans” in Footnote 6 to the Summary Compensation Table. |
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ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
| Change in Control without Termination(1) ($) |
Change in Control with Termination without Cause or for Good Reason(2) ($) |
Termination by the Company without Cause or by the Executive for Good Reason(3) ($) |
Termination by the Company with Cause(4) ($) |
Termination by the Executive upon Retirement(5) ($) |
Termination by Death or Disability(6) ($) |
|||||||||||||||||||
| Raymond J. Quinlan |
||||||||||||||||||||||||
| Equity Vesting |
— | 4,048,835 | — | — | — | 4,048,835 | ||||||||||||||||||
| Cash Severance |
— | 4,094,700 | 4,094,700 | — | — | — | ||||||||||||||||||
| Medical Insurance/Outplacement |
— | 14,610 | 29,610 | — | — | — | ||||||||||||||||||
| Total |
— | 8,158,145 | 4,124,310 | — | — | 4,048,835 | ||||||||||||||||||
| Steven J. McGarry |
||||||||||||||||||||||||
| Equity Vesting |
— | 871,179 | 871,179 | — | 871,179 | 871,179 | ||||||||||||||||||
| Cash Severance |
— | 2,028,840 | 1,014,420 | — | — | — | ||||||||||||||||||
| Medical Insurance/Outplacement |
— | 23,489 | 32,617 | — | — | — | ||||||||||||||||||
| Total |
— | 2,923,509 | 1,918,216 | — | 871,179 | 871,179 | ||||||||||||||||||
| Laurent C. Lutz |
||||||||||||||||||||||||
| Equity Vesting |
— | 6,095,791 | 6,095,791 | — | — | 6,095,791 | ||||||||||||||||||
| Cash Severance |
— | — | — | — | — | — | ||||||||||||||||||
| Medical Insurance/Outplacement |
— | 15,550 | 15,550 | — | — | 15,550 | ||||||||||||||||||
| Total |
— | 6,111,341 | 6,111,341 | — | — | 6,111,341 | ||||||||||||||||||
| Charles P. Rocha |
||||||||||||||||||||||||
| Equity Vesting |
— | 866,131 | — | — | — | 866,131 | ||||||||||||||||||
| Cash Severance |
— | 2,048,840 | 1,024,420 | — | — | — | ||||||||||||||||||
| Medical Insurance/Outplacement |
— | 20,733 | 30,550 | — | — | — | ||||||||||||||||||
| Total |
— | 2,935,705 | 1,054,970 | — | — | 866,131 | ||||||||||||||||||
| Jeffrey F. Dale |
||||||||||||||||||||||||
| Equity Vesting |
— | 403,744 | — | — | — | 403,744 | ||||||||||||||||||
| Cash Severance |
— | 1,592,560 | 796,280 | — | — | — | ||||||||||||||||||
| Medical Insurance/Outplacement |
— | 14,610 | 25,957 | — | — | — | ||||||||||||||||||
| Total |
— | 2,010,914 | 822,237 | — | — | 403,744 | ||||||||||||||||||
| (1) | For Equity Vesting—Assumes all equity awards are assumed by the surviving/acquiring company in a change in control. |
| (2) | For Equity Vesting—Amounts shown are the value of RSU awards (including all dividend equivalents) plus the spread value of net stock options that would vest for each individual on December 31, 2015, based on the closing market price of the Company’s Common Stock on that date of $6.52. Assumes RSUs and stock options are not assumed in a change of control. For Medical Insurance/Outplacement—Consists of the Company’s estimated portion of the cost of health care benefits for 24 months. |
| (3) | For Equity Vesting—Upon termination, these awards generally continue to vest based on their original vesting terms. For Medical Insurance/Outplacement—Consists of the Company’s estimated portion of the cost of health care benefits for 18 months (24 months in Mr. Quinlan’s case), plus $15,000 of outplacement services. |
| (4) | For Equity Vesting—Vested and unvested equity awards forfeit upon a termination for cause (as defined in the plan). |
| (5) | For Equity Vesting—Retirement eligibility for equity treatment awards granted prior to 2013 is age 60 or more, or age plus service with the Company or its subsidiaries of 70 or more. Beginning with awards granted in 2013, retirement eligibility requires five years or more of service, as defined by policy, to the Company, and either has reached the age of 65 or more, or age plus service with the Company or its subsidiaries of 75 or more. Upon eligible retirement, these awards generally continue to vest based on their original terms. On December 31, 2015, Mr. McGarry was retirement eligible. |
| (6) | For Equity Vesting—Unvested equity awards accelerate upon termination by death or disability (as defined in the plan). Amounts shown are the value of RSU awards plus the spread value of net stock options that would vest for each individual on December 31, 2015, based on the closing market price of the Company’s Common Stock on that date of $6.52. For Medical Insurance/Outplacement—Consists of the Company’s estimated portion of the cost of health care benefits for 18 months pursuant to Mr. Lutz’s employment agreement. |
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Our directors’ compensation program is designed to reasonably compensate our non-employee directors for work required for a company of our size and to align the directors’ interests with that of our stockholders. The NGC Committee reviews the compensation level of our non-employee directors on an annual basis and makes recommendations to the Board of Directors.
2015 Director Compensation Table
The following table provides summary information for the year ended December 31, 2015, relating to compensation paid to or accrued by us on behalf of our non-employee directors who served in this capacity on December 31, 2015:
| Name |
Fees Earned or Paid in Cash ($)(1) |
Stock Awards ($)(2) |
Option Awards ($)(3) |
All Other Compensation ($)(4) |
Total($) | |||||||||||||||
| Paul G. Child |
57,500 | 70,000 | — | 39 | 127,539 | |||||||||||||||
| Carter Warren Franke |
45,000 | 70,000 | — | 39 | 115,039 | |||||||||||||||
| Earl A. Goode |
45,000 | 70,000 | — | 39 | 115,039 | |||||||||||||||
| Ronald F. Hunt |
47,500 | 70,000 | — | 39 | 117,539 | |||||||||||||||
| Marianne M. Keler |
50,000 | 70,000 | — | 39 | 120,039 | |||||||||||||||
| Jim Matheson |
62,500 | 70,000 | — | 20 | 132,520 | |||||||||||||||
| Jed H. Pitcher |
52,500 | 70,000 | — | 39 | 122,539 | |||||||||||||||
| Frank C. Puleo |
50,000 | 70,000 | — | 39 | 120,039 | |||||||||||||||
| Vivian C. Schneck-Last |
62,500 | 70,000 | — | 20 | 132,520 | |||||||||||||||
| William N. Shiebler |
50,000 | 70,000 | — | 39 | 120,039 | |||||||||||||||
| Robert S. Strong |
45,000 | 70,000 | — | 39 | 115,039 | |||||||||||||||
| (1) | In 2015, we began paying our director fees quarterly in arrears whereas they were previously paid in a lump sum upon election or re-election to the Board of Directors. As a result, the fees paid to directors in 2015 are lower year-over-year. The amounts reflected above are roughly half of the fees to be paid to directors for their 2015-2016 term. |
| (2) | The non-employee directors elected to the Company’s Board of Directors at the Company’s 2015 Annual Meeting each received a restricted stock award on June 26, 2015 and a restricted stock award on October 28, 2015, both of which vest in full upon the Company’s 2016 Annual Meeting, scheduled to be held on June 23, 2016. The grant date fair market value for each share of restricted stock granted on June 26, 2015 to directors is based on the closing market price of the Company’s stock on June 26, 2015, which was $10.03, and the grant date fair market value for each share of restricted stock granted on October 28, 2015 to directors is based on the closing market price of the Company’s stock on October 28, 2015, which was $7.02. Additional details on accounting for stock-based compensation can be found in Note 2, “Significant Accounting Policies” and Note 14, “Stock-Based Compensation Plans and Arrangements” of Sallie Mae’s Consolidated Financial Statements contained in the Company’s 2015 Form 10-K. Each director received a total of 7,834 shares of restricted Common Stock as a result of the aforementioned awards that will vest on June 23, 2016 if the director is still incumbent at that time. |
| (3) | The Company did not grant any stock options to the non-employee directors during 2015. The non-employee directors’ vested and outstanding stock options are reported in the Ownership of Common Stock by Directors and Executive Officers section in this proxy statement. |
| (4) | Includes annual premiums paid by the Company to provide a life insurance benefit of $50,000. Premiums were prorated for Mr. Matheson and Ms. Schneck-Last due to their joining the Board of Directors on March 26, 2015. |
Director Compensation Elements
The following table highlights the material elements of our 2015 director compensation program:
| Membership/Retainer |
Annual Cash Retainer | |
| Board of Directors Retainer |
$70,000 | |
| Lead Independent Director Retainer |
$25,000 | |
| Committee Chair Retainer |
||
| • Audit Committee |
$25,000 | |
| • Nominations, Governance and Compensation Committee |
$20,000 | |
| • Risk Committee |
$20,000 | |
| Committee Membership Retainer |
||
| • Audit Committee |
$10,000 | |
| • Nominations, Governance and Compensation Committee |
$10,000 | |
| • Risk Committee |
$10,000 |
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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
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|
SLM CORPORATION ATTN: CORPORATE SECRETARY 300 CONTINENTAL DRIVE NEWARK, DE 19713 |
VOTE BY INTERNET - www.proxyvote.com
|
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| Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Daylight Time the day before meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||||||
|
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
|
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| If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. | ||||||
|
VOTE BY PHONE - 1-800-690-6903
|
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| Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Daylight Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. | ||||||
|
VOTE BY MAIL
|
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| Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
| E10280-P77584 | KEEP THIS PORTION FOR YOUR RECORDS |
| DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| SLM CORPORATION
|
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| The Board of Directors recommends you vote FOR the following proposals:
|
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| 1. Election of Directors
|
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| Nominees: |
For | Against | Abstain | |||||||||||||||||
| 1a. Paul G. Child |
¨ | ¨ | ¨ | |||||||||||||||||
| 1b. Carter Warren Franke |
¨ | ¨ | ¨ | For | Against | Abstain | ||||||||||||||
| 1c. Earl A. Goode |
¨ | ¨ | ¨ | 2. Advisory approval of SLM Corporation’s executive compensation. |
¨ | ¨ | ¨ | |||||||||||||
| 1d. Ronald F. Hunt |
¨ | ¨ | ¨ |
3. Ratification of the appointment of KPMG LLP as SLM Corporation’s independent registered public accounting firm for 2016. |
¨ | ¨ | ¨ | |||||||||||||
|
1e. Marianne M. Keler |
¨ |
¨ |
¨ |
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|
1f. Jim Matheson |
¨ |
¨ |
¨ |
NOTE: This proxy is revocable and the shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder. If no direction is made the proxy will be voted as the Board of Directors recommends. If any other matters properly come before the meeting or any adjournments or postponements thereof, the persons named in this proxy will vote in their discretion. |
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|
1g. Jed H. Pitcher |
¨ |
¨ |
¨ |
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1h. Frank C. Puleo |
¨ |
¨ |
¨ |
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1i. Raymond J. Quinlan |
¨ |
¨ |
¨ |
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|
1j. Vivian C. Schneck-Last |
¨ |
¨ |
¨ |
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1k. William N. Shiebler |
¨ |
¨ |
¨ |
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|
1l. Robert S. Strong |
¨ |
¨ |
¨ |
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|
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
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| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Table of Contents
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com.
PLEASE VOTE, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
ADMISSION TICKET
Bring this ticket and photo ID with you if you plan on attending the meeting.
NOTE: Cameras, transmission, broadcasting and other recording devices, including certain smart phones, will not be permitted in the meeting room. Attendees will be asked to pass through a security screening device or adhere to other security measures prior to entering the Annual Meeting. We regret any inconvenience this may cause you and we appreciate your cooperation.
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,
q DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
E10281-P77584
SLM CORPORATION
Annual Meeting of Stockholders
June 23, 2016 11:00 AM
Sallie Mae
300 Continental Drive
Newark, DE 19713
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Laurent C. Lutz, Richard M. Nelson and Nicolas Jafarieh, or each of them, each with full power of substitution, as the lawful attorneys and proxies of the undersigned to attend the Annual Meeting of Stockholders of SLM Corporation to be held on June 23, 2016, and any adjournments or postponements thereof, to vote the number of shares the undersigned would be entitled to vote if personally present, and to vote in their discretion upon any other business that may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED BY THE UNDERSIGNED STOCKHOLDER. IF NO CHOICE IS SPECIFIED BY THE STOCKHOLDER, THIS PROXY WILL BE VOTED “FOR” ALL PORTIONS OF PROPOSALS 1, 2 AND 3, AND IN THE PROXY’S DISCRETION ON ANY OTHER MATTERS PROPERLY COMING BEFORE THE MEETING.
THIS CARD WILL ALSO BE USED TO PROVIDE VOTING INSTRUCTIONS TO THE TRUSTEE FOR ANY SHARES HELD FOR THE ACCOUNT OF THE UNDERSIGNED IN CERTAIN SLM CORPORATION 401(K) PLANS.