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 ☒ Filed by a party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant toSection 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)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
☒ | No fee | |||
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Fee paid previously with preliminary | ||||
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act | |||
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300 Continental Drive Newark, Delaware 19713 |
LETTER FROM THE CHAIRMAN
OF THE BOARD OF DIRECTORSCHIEF EXECUTIVE OFFICER
May 5, 2020April 28, 2022
Dear Fellow Stockholders:
AsWhile 2021 was another different and challenging year, the premier brandreasons for college and continuous education,optimism are all around us. Much of the uncertainty caused by the pandemic is now behind us, with a return to a new normal very much underway. I’m happy to report our Sallie Mae builds prosperous futures by providing access, planning outcomes,team members are back on our campuses. While we have learned to work effectively in a remote setting, spending time on our campuses provides unique and helpingmeaningful opportunities for collaboration, innovation, development, connection, and mentorship. Achieving the best balance of the two models is why we’ve instituted a hybrid work approach for our organization.
My passion and connection as the leader of Sallie Mae continues to be grounded in our mission: to power confidence as students begin their unique journey. It’s personal to me and means not resting on accomplishments, always improving, and striving for excellence. That mindset burns bright in our more than 1,400 team members who continue to deliver for our customers and stockholders.
That relentless focus and progress on each of our strategic imperatives helped us deliver strong results in 2021. We grew market share as the leader in private student lending while rigorously managing expenses, executing a capital return program that exceeded original expectations, and improving our earnings outlook throughout the year. We also increased our share repurchase goals and our dividend, further creating shareholder value. We expect that continued focus and execution to drive meaningful results in 2022.
We also continue to be creative in pursuing opportunities to reach and assist more students and families responsibly fundand strategically evolve our business. Our acquisition of Nitro College significantly enhances our reach to current and prospective college students and their future. Educationparents. These efforts not only complement our core business but also provide innovative and enhanced digital capabilities that meaningfully position Sallie Mae as an education solutions provider.
We know higher education is the foundation for successalso a critical factor in advancing diversity and the proven pathway toequity and promoting economic mobility. We are proud to serve the 456,000 students and families who selected us last year as they invested in their future through education.
This year, like many other organizations, we have needed to change the way we work, socialize, and live our daily lives in the face of theCOVID-19 crisis. Our team has shown an extraordinary adaptability in the face of this ever-changing landscape. In particular, I want to recognize those employees whoThese factors continue to servebe a focus at Sallie Mae, as we address them both internally and externally through our customers, develop new solutions to ensureChief Diversity Officer and programs like our Bridging the health and safety of our employees, keep our facilities safe, and keep our business running smoothly throughout this global pandemic.
We continue to take tangible actions to position our franchise for long-term success, including focusing our resources on key growth opportunities, providing high-quality private student loans, and offering competitive financing for grad school.
In addition, we remain committed to these values every day ofDream Scholarship Program in partnership with the year: Connect, Thrive, Do Right, Dare to Do, and Make a Difference. Sallie Mae’s efforts to live these values areThurgood Marshall College Fund. This work is highlighted in our inaugurallatest Corporate Social Responsibility report that was published in March 2020April 2022 and available at www.salliemae.com.
We understand we cannot deliver for our customers without also delivering for our stockholders. Our investment thesis remains simple: we seek to (i) provide attractive growth through a focus on our website.
Finally, I am pleasedmarket share and operating leverage, (ii) expertly allocate and return capital to introduce Jonathan W. Witter, our new Chief Executive Officer. Jon is an industry veteran bringing nearly three decades of executive leadership, banking expertise,stockholders, and operational management to Sallie Mae. He is a strategic leader with a demonstrated ability to improvetop- and bottom-line performance, while enhancing customer experience. Most recently, he served as Executive Vice President and Chief Customer Officer of Hilton, where he oversaw the company’s global brands, marketing, loyalty and partnerships, IT, and strategy teams. Prior to his role at Hilton, Jon held leadership positions at Capital One, Morgan Stanley, and Wachovia.
Our Board and management team are confident that Jon is ideally suited to lead Sallie Mae, and under his leadership, we will(iii) manage risk. We continue to perform and deliver onalign the interest of our team members with this long-term growth plans.valuation orientation.
Please join us forI look forward to you joining me at the SLM Corporation (“Sallie Mae”) 20202022 Annual Meeting of Stockholders (the “Annual Meeting”) on Thursday,Tuesday, June 18, 2020,21, 2022, at 11:00 a.m.1 p.m. Eastern Daylight Time to be held virtually via the Internet atwww.virtualshareholdermeeting.com/SLM2020.SLM2022.
Details of the business to be conducted at the Annual Meeting and how to participate at the 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. 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 ofand confidence in Sallie Mae.
Sincerely,All best,
Raymond J. Quinlan
Jonathan W. Witter
Chairman of the Board of DirectorsChief Executive Officer
NOTICE OF 20202022 ANNUAL MEETING
OF STOCKHOLDERS
Date | Time | Place | ||
June |
Eastern Daylight Time | Meeting live via the Internet – please visit: www.virtualshareholdermeeting.com/ |
Items of Business:
Proposal 1—Elect |
Proposal 2—Approve, on an advisory basis, Sallie Mae’s executive compensation; |
Proposal 3—Ratify the appointment of KPMG LLP as Sallie Mae’s independent registered public accounting firm for the year ending December 31, |
Other Business—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 21, 2020,22, 2022, will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement of the Annual Meeting. On April 21, 2020, 375,096,45822, 2022, 269,214,100 shares of Common Stock were outstanding and eligible to be voted.
How to Vote:
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 one of the following ways:
By Telephone 1-800-690-6903 | ||
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By Internet before the meeting www.proxyvote.com | |
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By Mail completing and signing the proxy card enclosed and | |
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By Internet during the meeting www.virtualshareholdermeeting.com/ |
2022 Virtual Annual Stockholder Meeting
After careful consideration, the Board of Directors has determined to hold a virtual annual meeting in order to facilitate stockholder attendance and participation by enabling stockholders to participate from any location and at no cost. We believe this is the right choice for Sallie Mae at this time, as it enables engagement with our stockholders, regardless of size, resources, or physical location while safeguarding the health of our stockholders, Board of Directors, and management. We are committed to ensuring that stockholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting, including submitting questions. You will be able to attend the meeting online, vote your shares electronically, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/SLM2022. To participate in the virtual meeting, you will need the 16-digit control number included on your Notice, proxy card, or voting instruction form. The meeting webcast will begin promptly at 1:00 p.m., Eastern Daylight Time. We encourage you to log in and access the meeting at least 15 minutes prior to the start time.
By order of the Board of Directors
Richard M. Nelson
Corporate Secretary
May 5, 2020April 28, 2022
TABLEOF CONTENTS
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Ownership of Common Stock by Directors and Executive Officers | 23 | |||
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2022 Proxy Statement — SLM CORPORATION
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SLM CORPORATION — 20202022 Proxy Statement —SLM CORPORATION
300 Continental Drive
Newark, Delaware 19713
The Board of Directors of SLM Corporation (“Sallie Mae,” the “Company,” “we,” “our”“our,” or “us”) is furnishing this proxy statement to solicit proxies for use at Sallie Mae’s 20202022 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, 2020.2022. In light of the persisting coronavirus(COVID-19)(“COVID-19”), for the safety and well-being of our stockholders, and taking into account the protocols of local, state, and federal governments, we have determined that the Annual Meeting will be held in a virtual meeting format only (with noin-person meeting), via the Internet, atwww.virtualshareholdermeeting.com/SLM2020SLM2022. 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 Form10-K for the fiscal year ended December 31, 20192021 (the “2019 “2021 Form 10-K”) are available at:https://www.salliemae.com/investors/shareholder-information andhttps://materials.proxyvote.com. You may also obtain these materials at the Securities and Exchange Commission (“SEC”) website atwww.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 20192021 Form10-K without charge to any stockholder upon written request.
This summary highlights certain information contained in the proxy statement. You should read the entire proxy statement and the 2021 Form 10-K carefully before you vote.
SLM’s Strategy
To further focus our business and increase shareholder value, we continue to advance our strategic imperatives. Our focus remains on maximizing the profitability and growth of our core private student loan business, while harnessing and optimizing the power of our brand and attractive client base. In addition, we continue to seek to better inform the external narrative about student lending and Sallie Mae’s role in helping students and families responsibly plan and pay for college. We also strive to maintain a rigorous and predictable capital allocation and return program to create shareholder value. Our internal focus is to drive a mission-led culture that continues to make Sallie Mae a great place to work. Finally, we continue to strengthen our risk and compliance efforts, to enhance and build upon our risk management framework, and to keep focused and aligned on assessing and monitoring enterprise-wide risk.
2022 Annual Meeting of Stockholders
Time and Date June 21, 2022 1:00 p.m. Eastern Daylight Time | Virtual Location www.virtualshareholdermeeting.com/SLM2022 | Record Date April 22, 2022 |
2022 Proxy Statement — SLM CORPORATION 1
This proxy statement contains three proposals requiring stockholder action, each of which is discussed in more detail below. Proposal 1 seeks the election of 1211 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, 2020.2022. 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.
The Board of Directors recommends that you vote FOR each of Proposals 1 - 3 as discussed in more detail below.
2020 Proxy Statement
—2 SLM CORPORATION 1— 2022 Proxy Statement
PROPOSAL 1—ELECTIONOF DIRECTORS
PROPOSAL 1—ELECTION OF DIRECTORS
The Sallie MaeOur Board of Directors has nominated and recommends 1211 individuals for election to our Board of Directors at the Annual Meeting. These individuals are as follows:
Paul G. Child
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Mary Carter Warren Franke
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Vivian C. Schneck-Last
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Jim Matheson
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Under our Certificate of Incorporation, the size of our Board of Directors may not be fewer than 11 nor more than 16 members. Under ourBy-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. The Board of Directors has set the number of members at 12.11, effective as of the Annual Meeting.
Biographical information, qualifications, and experience with respect to each director nominee appear 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 director nominee, including each individual’s age, principal occupation, and business experience during the past five years. Information concerning each director nominee is based in part on information received from the respective director nominee and in part from Sallie Mae’s records.
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.
OurBy-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 brokernon-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. The Nominations and Governance and Compensation Committee (the “NGC Committee”) of the Board of Directors will make a recommendation to the Board of Directors on whether to accept or reject such nominee’s resignation. The Board of Directors will act on the NGCNominations and Governance 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.
2022 Proxy Statement2 — SLM CORPORATION —32020 Proxy Statement
PROPOSAL 1—ELECTIONOF DIRECTORS
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
PAUL G. CHILD Former Office Managing Partner, Salt Lake City, Deloitte LLP
(Independent)
( |
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 • Director, Ballet West—2000 to 2008 • Director, Pioneer Theater—2000 to 2006 |
Qualifications: 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.
Age:
Director since:April 2014 | ||||||||
MARY CARTER WARREN FRANKE Former Managing Director, Head of Corporate Marketing, JPMorgan Chase & Co.
(Independent) (Board Chair) |
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, Investors Management Corporation—2021 to present • Director, The Warfield Fund—2007 to present • Director, Saint Mary’s School—2014 to • Director, Hobe Sound Community Chest—2017 to present • Director, Paul’s Place—2014 to 2017 | Qualifications: Ms. 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.
Age:
Director since:April 2014 |
2020 Proxy Statement —SLM CORPORATION 3
PROPOSAL 1—ELECTIONOF DIRECTORS
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PROPOSAL 1—ELECTIONOF DIRECTORS
MARIANNE M. KELER Attorney, Keler & Kershow PLLC
(Independent)
( |
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, Student Loan Marketing Association—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 • Board Chair,
• Board Chair, American University in • Finance Committee Chair, EL Haynes Charter • 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; Board Chair—2018 to present | Qualifications: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 and consumer lending, legal and corporate governance, and higher education.
Age:
Director since:April 2014 | ||||||||
MARK L. LAVELLE
(Independent) (Compensation Committee Chair) |
Professional Highlights:
• Chief Executive Officer, X Delivery—2021 to present • Chairman and Chief Executive Officer, Deep Lake Capital—2021 to present • Senior Vice President, Commerce Cloud, Adobe Inc.—2018 to 2019 • Chief Executive Officer, Magento Commerce—2015 to 2018 • Senior Vice President, Product, eBay • Senior Vice President, Strategy and Partnerships, eBay, Inc.—2012 to 2013 • Senior Vice President, Strategy and Business Development, PayPal, Inc.—2009 to 2012 • Co-Founder and Vice President, Corporate Development, Bill Me Later, Inc.—2001 to 2009
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2019 to present • Director, Armada Inc—2018 to present • Director, Second Chance—2008 to present |
Qualifications: Mr. Lavelle’s extensive experience developing and scaling businesses encompassing financial services, commerce, and information technology allows him to provide valuable insight to the Board of Directors in the areas of risk management, strategy, acquisitions, and business operations.
Age:
Director since:April 2019 |
20202022 Proxy Statement —SLM CORPORATION 5
PROPOSAL 1—ELECTIONOF DIRECTORS
TED MANVITZ Managing Director, Grain Management (Independent) | Professional Highlights: • Managing Director, Grain Management—2022 to present • Interim Chief Financial Officer, Optimus Ride—2021 • Senior Advisor IHS Holding Limited—2019 to 2021; Executive Vice President and Chief Strategy Officer—2018 to 2019; Chief Financial Officer—2016 to 2018; Chief Investment Officer—2013 to 2016; Chief Operating Officer—2011 to 2013; Executive Director, Corporate Finance and M&A—2010 to 2011 • Managing Director, Arm Capital Partners—2009 to 2010 • Executive Director, J.P. Morgan Securities, Inc.— 2006 to 2009; Vice President—2004 to 2006; Associate Vice President—2002 to 2004 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2021 to present • Senior Advisor, Africell – 2021 to present • Adjunct Faculty, American University—2020 to present | Qualifications: Mr. Manvitz’s extensive experience in the areas of strategic planning, senior executive management, operations, finance, mergers and acquisitions, and capital markets allows him to provide value insight to the Board of Directors in driving growth, building partnerships, and creating value. Age: 50 Director since: March 2021 |
JIM MATHESON Chief Executive Officer, NRECA
(Independent) |
Professional Highlights:
• Chief Executive Officer, National Rural Electric Cooperative Association—2016 to present • Principal in the Public Policy Practice, Squire Patton Boggs—2015 to 2016 • 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:
• Director, Sallie Mae Bank—2015 to present • 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 • Board Member, United States Association of Former Members of Congress—2015 to present
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Qualifications:Mr. Matheson’s extensive experience in public policy and financial services enables him to bring to the Board of Directors a valuable perspective in development of business strategies and on public policy and regulatory matters.
Age:
Director since:March 2015 | ||||||||
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PROPOSAL 1—ELECTIONOF DIRECTORS
SAMUEL T. RAMSEY Former Chief Risk Officer, Chase, the consumer and small business organization within JP Morgan Chase & Co. (Independent) | Professional Highlights: • Chief Risk Officer, Chase, the consumer and small business organization within JP Morgan Chase & Co.—2011 to 2014 • Chief Risk Officer, Ally Financial Inc.—2007 to 2010 • Chief Financial Officer, Global Corporate and Investment Banking, Bank of America—2006 to 2007 • Enterprise Credit and Market Risk Executive, Chief Risk Executive for Global Consumer and Small Business Banking, Enterprise Operational and Market Risk Executive, Bank of America—2004 to 2006 Other Professional and Leadership Experience: • Director, Sallie Mae Bank—2021 to present • Director, Chair of Audit Committee, member of the Compliance and Finance Committees, Ditech Holding Corporation—2018 to 2019 | Qualifications: Mr. Ramsey brings more than 30 years of experience in consumer and commercial banking, with expertise in risk management, finance, treasury, and the capital markets to the Board of Directors. Age: 62 Director since: November 2021 | ||||||||
VIVIAN C. SCHNECK-LAST Former Managing Director,
(Independent) (Operational and Compliance Risk Committee Chair) |
Professional Highlights:
• Managing Director, Global Head of Technology Governance, Goldman Sachs & Company—2009 to
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2015 to present • Advisor/Director, Portrait Capital Systems, LLC—2015 to 2019 • Advisor/Director, Coronet—2015 to present • Director, Bikur Cholim of Manhattan—2014 to present
Directorships of other public companies:
• |
Qualifications: 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.
Age:
Director since:March 2015 | ||||||||
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20202022 Proxy Statement —SLM CORPORATION 7
PROPOSAL 1—ELECTIONOF DIRECTORS
ROBERT S. STRONG Former Managing Director, Chairman, Capital
(Independent)
(
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Professional Highlights:
• Managing Director, Chairman, Capital Commitments Committee, Bank of America Securities—2006 to
• 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 • Director, Syncora Guaranty, Inc.—2018 to • Director, Syncora Capital Assurance, Inc.—2009 to 2017 • Member, Financial Policy Review Board for the State of New Jersey—2013 to 2016 • Director, CamberLink Inc.—2013 to 2016 |
Qualifications: 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.
Age:
Director since:April 2014 |
JONATHAN W. WITTER Chief Executive Officer, Sallie Mae
(Executive; Not Independent) |
Professional Highlights:
• Chief Executive Officer and Director, Sallie Mae—April 2020 to present • Executive Vice President and Chief Customer Officer, Hilton Worldwide Holdings—April 2017 to April 2020 • President—Retail and Direct Banking, Capital One Financial Corporation—February 2012 to March
• Chief Operating Officer—Retail Banking Group and President, Morgan Stanley Private Bank—2009 to December 2010 • Executive Vice President and Head of General Bank Distribution, Wachovia (now Wells Fargo & Company)—2004 to 2009
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—April 2020 to present
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Qualifications: Mr. Witter’s extensive background and significant leadership experience in the banking industry and his customer experience expertise allow him to provide business and leadership insight to the Board of Directors in the areas of banking, financial services, capital markets, business operations, and customer service.
Age:
Director since:April 2020 |
8 SLM CORPORATION —20202022 Proxy Statement
PROPOSAL 1—ELECTIONOF DIRECTORS
KIRSTEN O. WOLBERG Former Chief Technology and
(Independent) (Preferred Stock Committee Chair) |
Professional Highlights:
• Chief Technology and Operations Officer, DocuSign—2017 to • Vice President, PayPal Separation Executive, PayPal, Inc.—2014 to 2017 • Vice President, Technology, PayPal, Inc.—2012 to 2014 • Chief Information Officer, Salesforce.com—2008 to 2011
Other Professional and Leadership Experience:
• Director, Sallie Mae Bank—2016 to present • Director, Epidemic Sound-2021 to present • Director, Pryon-2021 to present • Director, Pie Insurance-2021 to present • Director, Duco Technology Limited—2020 to 2021 • Vice President, Corporate Technology, Charles Schwab & Co.—2001 to 2008 • Director, Year Up—2008 to present • Director, Jewish Vocational Services—2014 to present
Directorships of other public companies:
• Silicon Graphics International Corp.—2016 • CalAmp Corp—2020 to present • Dynatrace, Inc.—2021 to present |
Qualifications: Ms. Wolberg’s extensive experience in information technology for the financial services industry allows her to provide valuable insight to the Board of Directors in the areas of finance, information technology risks, and business operations.
Age:
Director since:November 2016 |
Board of Directors Recommendation
✓ |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR” THE ELECTION OF THE
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20202022 Proxy Statement —SLM CORPORATION 9
PROPOSALROPOSAL 2—ADVISORY VOTEON EXECUTIVE COMPENSATION
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 our executive compensation policies and procedures operate and are designed to achieve our 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 (“NEOs”).
At our annual meeting of stockholders held in June 2019,2021, we submitted anon-binding vote to our stockholders to approve our executive compensation. Approximately 96.089.3 percent of the stockholders voted in favor of thesay-on-pay proposal. We attribute that broad support in part to our continued efforts to understand and address the feedback we received from our stockholders. Specifically, in 2021 we continuecontinued to focus on performance-based compensation for our NEOs as we (i) tietied a significant portion of total NEO compensation to the achievement of performance goals that we believe drive the fundamentals of our business and (ii) awardawarded a greatersignificant percentage, 75 percent, of the NEO’s long-term incentive plan equity award (“LTIP”) in the form of performance-based awards consisting of performance stock units (“PSUs”). In 2019, as part and premium priced stock options. The NEOs’ 2021 LTIP consisted of our plan to increase the percentage of compensation tied to performance, we increased the amount of PSUs awarded to NEOs under the LTIP from(i) 25 percent toPSUs; (ii) 50 percent.percent premium priced stock options; and (iii) 25 percent restricted stock units (“RSUs”).
The compensation awarded to our former Chief Executive Officer (“CEO”), Raymond J. Quinlan,Jonathan W. Witter, and other NEOs for 2019 recognizes2021 reflects the positive performance of the Company.Company, notwithstanding a global pandemic. The NGCCompensation Committee is mindful of its responsibility to align executive compensation with the overall performance of the Company, while taking into consideration the need to provide market competitive compensation in order to recruit and retain highly skilled and experienced executives. The CD&A provides a comprehensive discussion and rationale for the 20192021 pay decisions made by the NGCCompensation Committee and the correlation to Company performance.
As described in the CD&A, our executive compensation programs are designed to attract, retain, and motivate our NEOs, who are important to our long-term success. Under these programs, we provide our NEOs with appropriate objectives and incentives to achieve our business goals. We believe that our compensation features demonstrate our responsiveness to our stockholders, our commitment to ourpay-for-performance philosophy, and our goal of aligning management’s interests with those of our stockholders to support the creation of long-term value.
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 NEOs requires the affirmative vote of the holders of a majority in voting power of the Common Stock present or represented, and entitled to vote at the Annual Meeting.thereon. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter, including brokernon-votes, have no direct effect on the matter. This proposal is advisory in nature and, therefore, is not binding upon the NGCCompensation Committee or the Board of Directors. However, the NGCCompensation Committee will, as itthe former Nominations, Governance and Compensation Committee (the “NGC Committee”) 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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10 SLM CORPORATION —20202022 Proxy Statement
PROPOSAL 3—RATIFICATIONOFTHE APPOINTMENTOFTHE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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 of Sallie Mae’s Board of Directors (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, 2020.2022. 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 in voting power of the shares of Common Stock present or represented, and entitled to vote at the Annual Meeting.thereon. Abstentions have the same effect as votes “AGAINST” the matter. Shares not voted on the matter including brokernon-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 20202022 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
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20202022 Proxy Statement —SLM CORPORATION 11
CORPORATE GOVERNANCE
Roles and Responsibilities of the Board of Directors
The Board of Directors believes strong corporate governance is critical to achieving Sallie Mae’s performance goals and to maintaining the trust and confidence of investors, employees, regulatory agencies, and other stakeholders.
The primary responsibilities of the Board of Directors are to:
Reviewreview Sallie Mae’s long-term strategies and set long-term performance metrics;
Reviewreview risks affecting Sallie Mae and its processes for managing those risks, and oversee assignment of various aspects of risk management, compliance, and governance;
Select,select, evaluate, and compensate the CEO and our NEOs;
Planplan for succession of the CEO and members of the executive management team;
Reviewreview and approve Sallie Mae’s annual business plan and multi-year strategic plan, and periodically review performance against such plans;
Reviewreview and approve major transactions and business initiatives;
Throughthrough its Audit Committee, select and oversee Sallie Mae’s independent registered public accounting firm;
Recommendrecommend director candidates for election by stockholders; and
Evaluateevaluate its own effectiveness.
The Board of Directors’ Governance Guidelines (the “Guidelines”) are reviewed each year by the NGCNominations and Governance Committee, which from time to time will recommend changes to the Board of Directors. The Guidelines are published atwww.salliemae.com under “For Investors,” and a written copy may be obtained by contacting the Corporate Secretary atcorporatesecretary@salliemae.com orSLM Corporation, 300 Continental Drive, Newark, DE 19713.19713. The Guidelines, along with Sallie Mae’sBy-Laws, embody the following governance practices, among others:
A majority of the members of the Board of Directors must be independent directors, and all members of the (i) Audit, (ii) Nominations and NGCGovernance, and (iii) Compensation Committees must be independent.
All directors stand forre-election each year. Directors are elected under a majority vote standard in uncontested elections.
We have historically combined the roles of Chairman of the Board of Directors and CEO; however, as set forth in greater detail in the Section titled “Board Leadership Structure,” asAs of April 19, 2020, we have separated the role of Chairman of the Board of DirectorsChair from CEO, and anticipate maintaining this separation going forward.CEO. We alsono longer have a Lead Independent Director elected by the Board of Directors.Directors due to the independence of our Board Chair.
Each regularly scheduled Board of Directors meeting concludesmay conclude with an executive session in which only members of the Board of Directors participate. Each regularly scheduled committee meeting also generally concludes with an executive session presided over by the committee Chair.
We maintain stock ownership and retention guidelines for directors and executive officers.
The Board of Directors and its committees conduct performance reviews annually.undertake an annual review to evaluate their effectiveness.
TheDirectors should not serve on more than three other public company boards in addition to the Company’s Board of Directors.
Non-employee directors are to retire no later than at the annual meeting of stockholders following such director’s 75th birthday. An exception is provided for incumbent directors who are 75 years of age or older as of January 1, 2021 who may stand for re-election to the Company’s Board of Directors at the annual meeting of stockholders in 2021 and its committees may engage their own advisors.
On April 19, 2020, in connection with2022, subject to recommendation from the appointment of Mr. Witter as the Company’s CEO, the Board of Directors adopted a structure separating the ChairmanNominations and Governance Committee and approval of the Board of Directors from the CEO, which was initially reported in our Form8-K filed on March 5, 2020. Currently, Mr. Quinlan, the Company’s former CEO, serves as the Chairman of the Board of Directors (as well as the Chairman of the SallieDirectors.
12 SLM CORPORATION —20202022 Proxy Statement
CORPORATE GOVERNANCE
Ms. Franke, an independent director of the Company and Sallie Mae Bank, our wholly-owned subsidiary (the “Bank”) Board of Directors) and will serve in this role until June 18, 2020, at which time Mr. Quinlan will no longer serve on the Board of Directors, and the Board of Directors will appoint one of the Company’s independent directors then in service to serve, serves as the independent Chair offirst woman to chair the Board of Directors of the Company as well as the ChairBoard of Directors of the BankBank. Mr. Witter serves as a member of the Board of Directors.Directors and CEO. The Board of Directors believes that after June 18, 2020, an independent director is best situated to serve as Chair of our Board of Directors and of the Bank Board of Directors to serveChair as an effective counterbalance to management and our CEO, who also serves on the Board of Directors. By separating the CEO role from the Board Chair role, the Company is currently put in the best position to oversee all executives of the Company and act in the best interest of stockholders. The Board of Directors believes that the Company is currently best served by separating the roleroles of Board Chair and CEO, butCEO. However, subject to Sallie Mae’s By-Laws, the Board of Directors consistent with the Company’s governance guidelines and subject to the Company’sby-laws, reserves the right to revisit this structure and combine the two roles, depending on the future needs and strategy of the Company at aany given point in time. Our Chairman currentlyindependent Board Chair serves and the independent Chair after June 18, 2020 will serve, as the principal representative of the Board of Directors, presiding over meetings of the Board of Directors and shareholders. In addition to our separate Chair and CEO structure, the Board of Directors’ governance guidelines provide for a Lead Independent Director to facilitate coordination of the activities of the Company’s independent directors. This position is currently held by Paul Child, an independent director who serves as our Lead Independent Director as well as a member on three of our committees of the Board of Directors: the Audit, Risk, and Strategic Planning Committees. As Lead Independent Director, Mr. Child also attends all meetings held by our Board of Directors’ other committees. Our Lead Independent Director has historically provided strong independent leadership for the Board of Directors.stockholders.
For a director to be considered independent, the Board of Directors must determine the director does not have any direct or indirect material relationship with Sallie Mae. The Board of Directors has adopted the Guidelines, which embody the corporate governance principles and practices of the Company. The Guidelines include the standards for determining director independence, which conform to the independence requirements of the NASDAQ Global Select Market (“NASDAQ”) listing standards.
The Board of Directors has determined that alleach of the individuals who served as a director during 2019, other than Mr. Quinlan, our former CEO,2021 and all nominees standing for election at the Annual Meeting, other than Mr. Witter, our current CEO, are independent of Sallie Mae.
Each member of the Board of Directors’ Audit, Nominations and NGCGovernance, and Compensation Committees is independent within the meaning of the NASDAQ listing standards, Exchange Act Rule10A-3, and Sallie Mae’s own director independence standards set forth in the Guidelines. The Guidelines are published at www.salliemae.com under “For Investors”.
Our Board believes diversity is important and seeks representation across a range of attributes, including gender, race, ethnicity, and professional experience, and regularly assesses our Board’s diversity when identifying and evaluating director candidates. As of December 31, 2019,2021, our Board of Directors consisted of the following:
20202022 Proxy Statement —SLM CORPORATION 13
CORPORATE GOVERNANCE
Pursuant to Nasdaq’s Board Diversity Rule, which was approved by the SEC on August 6, 2021, Board diversity disclosure is provided in the table below as ofDecember 31, 2021. The Company is in compliance with the Nasdaq Board Diversity Rule as at least one director self-identifies as female and at least one additional director self-identifies as an underrepresented minority or LGBTQ+.
Board Diversity Matrix (As of December 31, 2021)
Total Number of Directors | 12 | |||||||
Female | Male | Non-Binary | Did Not Disclose Gender | |||||
Part I: Gender Identity | ||||||||
Directors | 4 | 8 | ||||||
Part II: Demographic Background | ||||||||
African American or Black | 1 | |||||||
Alaskan Native or Native American | ||||||||
Asian | ||||||||
Hispanic or Latinx | ||||||||
Native Hawaiian or Pacific Islander | ||||||||
White | 3 | 7 | ||||||
Two or More Races or Ethnicities | ||||||||
LGBTQ+ | 1 | |||||||
Did Not Disclose Demographic Background | 1 |
Board, Committee, and Annual Meeting Attendance
Our Board of Directors met nine13 times in 2019.2021. Each of the then-servingincumbent directors attended at least 75 percent of the total number of meetings of the Board of Directors and committees on which he or she served. Directors are expected to attend the Annual Meeting, and twelve12 out of thirteen13 of the then-serving members of the Board of Directors attended the Annual Meeting in June 2019. The only director not in attendance at2021. Mr. Goode retired on June 8, 2021, the date of the 2021 Annual Meeting in June 2019 was Jed Pitcher, whoMeeting. Accordingly, he did not seekstand for re-election toand did not attend the Board of Directors at the June 20192021 Annual Meeting.
14 SLM CORPORATION — 2022 Proxy Statement
CORPORATE GOVERNANCE
Roles of the Board and Its Committees
The Board of Directors has established the following standing committees to assist in its oversight responsibilities: Audit; NGC;Compensation; Nominations and Governance; Financial Risk; Strategic Planning;Operational and Compliance Risk; and Preferred Stock. Separately,On June 8, 2021, the Bank Board of Directors has also established aseparated the NGC Committee into two stand-alone committees, the Compensation Committee and the Nominations and Governance Committee. On September 15, 2021, the Board of Directors changed the name of the Risk Committee to the Financial Risk Committee and amended such committee’s responsibilities, which previously included general oversight of all risks at the Company, to focus on oversight of financial risks at the Company. Additionally, on September 15, 2021, the Board of Directors changed the name of the Compliance Committee.Committee to the Operational and Compliance Risk Committee and amended such committee’s responsibilities, which previously included general oversight of consumer compliance risk at the Bank, to focus more broadly on non-financial risk at the Company, including consumer compliance risk at the Bank. For ease of understanding, this proxy statement generally refers to the current name of each committee, even when referring to the committee prior to its name change. Each committee is governed by a Board-approved written charter, which is evaluated annually and which sets forth the respective committee’s functions, responsibilities, and delegated authority. Membership of each of the committees is established on an annual basis.
All of our committeeCommittee charters including the charter for our NGC Committee, are available atwww.salliemae.com under “For Investors, Corporate governance.Governance.” Stockholders may obtain a written copy of any and all committee charters by contacting the Corporate Secretary atcorporatesecretary@salliemae.com orSLM Corporation, 300 Continental Drive, Newark, Delaware 19713.
14 SLM CORPORATION —2020 Proxy Statement
CORPORATE GOVERNANCE
The following table sets forth the membership and number of meetings held for each committee of the Board of Directors as of December 31, 2019. Mr. Witter has not served on any committees since his appointment to the Board of Directors on April 20, 2020.2021.
Audit(1) | Nominations, Governance and Compensation | Risk(2) | Strategic Planning | Preferred Stock | |||||||||||||||||||||
Paul G. Child(1) (2) (l) (L) | * | * | * | ||||||||||||||||||||||
Mary Carter Warren Franke(2) (I) | * | * | * | ||||||||||||||||||||||
Earl A. Goode+(1) (I) | * | Co-Chair | |||||||||||||||||||||||
Marianne M. Keler(1) (I) | Chair | * | * | ||||||||||||||||||||||
Mark L. Lavelle(2) (I) | * | * | * | ||||||||||||||||||||||
Jim Matheson(I) | * | * | |||||||||||||||||||||||
Frank C. Puleo+(2) (I) | Chair | * | |||||||||||||||||||||||
Raymond J. Quinlan+(C) | Co-Chair | ||||||||||||||||||||||||
Vivian Schneck-Last(2) (I) | * | * | * | ||||||||||||||||||||||
William N. Shiebler+(1) (I) | Chair | * | * | ||||||||||||||||||||||
Robert S. Strong++(1) (2) (I) | * | Chair | |||||||||||||||||||||||
Kirsten O. Wolberg(I) | * | * | |||||||||||||||||||||||
Number of Meetings in 2019 | 10 | 12 | 9 | 2 | 1 |
Audit(1) | Nominations Governance and Compensation(2) | Nominations and Governance(2) | Compensation(2) | Operational and Compliance | Financial Risk(4)(5) | Preferred Stock | ||||||||
Paul G. Child(1) (5) (I) | Chair | * | ||||||||||||
Mary Carter Warren Franke(5) (I) (C) | * | * | * | |||||||||||
Earl A. Goode(6) (I) | *(6) | |||||||||||||
Marianne M. Keler(1) (I) | * | Chair | * | |||||||||||
Mark L. Lavelle(5) (I) | * | Chair | * | |||||||||||
Ted Manvitz(1) (I) | * | * | ||||||||||||
Jim Matheson(I) | * | * | * | |||||||||||
Frank C. Puleo(5) (8) (I) | * | * | ||||||||||||
Samuel T. Ramsey(1) (5) (I) | ||||||||||||||
Vivian Schneck-Last (5) (I) | * | Chair | ||||||||||||
William N. Shiebler(7) (I) | Chair(7) | |||||||||||||
Robert S. Strong(1) (5) (I) | * | Chair | ||||||||||||
Jonathan W. Witter | ||||||||||||||
Kirsten O. Wolberg(5) (I) | * | * | * | Chair | ||||||||||
Number of Meetings in 2021 | 12 | 7 | 2 | 3 | 4 | 8 | 1 |
* | Committee Member |
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(C) |
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(I) | Independent Board Member |
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(1) | The Board of Directors determined Mr. Child, |
(2) | The NGC Committee was separated into two stand-alone committees, the Nominations and Governance Committee and the Compensation Committee, on June 8, 2021. |
(3) | On September 15, 2021, the Compliance Committee was changed to the Operational and Compliance Risk Committee and became a committee of both the Company and the Bank boards of directors. |
(4) | On September 15, 2021, the Risk Committee was changed to the Financial Risk Committee. |
(5) | The Board of Directors determined Mr. Child, Ms. Franke, Mr. Lavelle, Mr. Puleo, Mr. Ramsey, Ms. Schneck-Last, |
(6) | Mr. Goode served on the NGC Committee and the Operational and Compliance Risk Committee through his date of retirement from the Board of Directors on June 8, 2021. |
(7) | Mr. Shiebler served as Chair of the NGC Committee through June 8, 2021, when the NGC Committee separated into two stand-alone committees. Mr. Shiebler served on the Nominations and Governance Committee, the Compensation Committee, and the Preferred Stock Committee through his date of retirement from the Board of Directors on November 13, 2021. |
(8) | On April 11, 2022, Mr. Puleo notified the Company he will not stand for re-election to the Company’s Board of Directors at the Annual Meeting. Mr. Puleo will continue to serve as a director until such meeting. |
20202022 Proxy Statement —SLM CORPORATION 15
CORPORATE GOVERNANCE
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/or its committees any significant departures from established tolerances and parameters and reviews new and emerging risks. Throughout the year, the Board of Directors and/or its committees dedicate a portion of their meetings to reviewing and discussing specific risk topics in greater detail with senior management, including risks related to cybersecurity. We believe that this risk oversight structure complements our current board leadership structure of separate Chair and CEO. The primary risk oversight responsibilities of each of the standing committees of the Board of Directors are as follows:
Audit Committee
• review of financial statements and periodic public reports;
• review reports prepared by management and/or external auditor setting forth significant financial reporting issues; • review sufficiency of internal controls over financial reporting and disclosure controls;
• engage and communicate with our independent registered public accounting firm; and
• oversee operation of internal audit function, staffing, and work plan. | Nominations
• 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 the Board of Directors and its committees;
• review related party • oversee the environmental, social, and governance (“ESG”) function of the Company. | Compensation Committee • oversee all compensation and benefits for our CEO, executive officers, and independent directors; • oversee equity-based compensation plans; • review management’s administration of employee benefit plans; • review management succession planning; and • confirm our incentive compensation practices properly balance risk and reward and do not encourage excessive risk-taking. |
Financial Risk Committee
• monitor our major
• review our risk management framework as it pertains to financial risks and supporting governance structure, roles, and responsibilities established by management;
• review our risk appetite framework and conduct regular reviews of key risk • review and approve loan securitization transactions, loan sales, or debt transactions of our Company or our affiliates; and • oversee framework and strategies pertaining to liquidity and capital management and review capital and liquidity stress testing scenarios and key assumptions.
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• monitor our major non-financial risks, including operational and |
• review our risk management framework as it pertains to | ||||
• review our risk appetite framework and conduct regular reviews of • monitor risk management capabilities related to • oversee the Bank’s Community Reinvestment Act (“CRA”) program and • oversee model risk management framework. | Preferred Stock Committee • monitor and evaluate our business activities in light of the |
All members of the Board of Directors also serve as members of the board of directors of the Bank and its committees. Our Audit, Compensation, Nominations and Governance, Financial Risk, and Operational and Compliance Risk committees perform similar oversight roles for the Bank. On September 15, 2021, the Operational and Compliance Risk Committee
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16 SLM CORPORATION —20202022 Proxy Statement
CORPORATE GOVERNANCE
The NGCNominations and Governance Committee considers for nomination to the Board of Directors candidates recommended by stockholders and members of the Board of Directors. The candidates are evaluated based on the needs of the Board of Directors and Sallie Mae at that time. The Board of Directors seeks representation across a range of professional experiences, and that reflects gender, race, ethnic, and geographic diversity. The minimum qualifications and attributes the NGCNominations and Governance Committee believes a director nominee must possess include:
Knowledgeknowledge of the business of Sallie Mae;
Provenproven record of accomplishment;
Willingnesswillingness to commit the time necessary for Board of Directors service;
Integrityintegrity and sound judgment in areas relevant to the business;
Impartialityimpartiality in representing stockholders;
Abilityability to challenge and stimulate management; and
Independence.independence.
To recommend a candidate, stockholders should send, in writing, the candidate’s name, credentials, contact information, and his or her consent to be considered as a candidate to the Chair of the NGCNominations and Governance Committee atcorporatesecretary@salliemae.com orc/o Corporate Secretary, SLM Corporation, 300 Continental Drive, Newark, Delaware 19713. The stockholder should also include his or her contact information and a statement of his or her share ownership. The nomination deadline for the 20202022 Annual Meeting has now closed. A stockholder wishing to nominate a candidate for the 2023 Annual Meeting must comply with the notice and other requirements described under “Stockholder Proposals for the 20212023 Annual Meeting” in this proxy statement.
Sallie Mae has a written policy regarding review and approval of related party transactions. Transactions covered by the policy are transactions involving Sallie Mae in excess of $120,000 in any year in which any director, nominee, executive officer, or greater-than-five percent beneficial owner of the Company, or any of their respective immediate family members, has or had a direct or indirect material interest, other than solely as a director and/orless-than-ten percent owner of an entity involved in the transaction (“Related Party Transactions”). Loans made in the ordinary course of Sallie Mae’s business to executive officers, directors, and their family members are considered Related Party Transactions and arepre-approved. Moreover, the Bank has also adopted written policies to implement the requirements of Regulation O of the Board of Governors of the Federal Reserve System, which restricts the extension of credit to directors and executive officers and their family members and other related interests. Under these policies, extensions of credit that exceed regulatory thresholds must be, and are, approved by the Boardboard of Directorsdirectors of the Bank. In 2019, theThe Company issued a credit card to Mr. Thome with a totalDaniel P. Kennedy, Executive Vice President and Chief Operational Officer of $10,000the Company and President of credit extended to him. Suchthe Bank. The credit card was issued in the ordinary course of business; is on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company; and does not involve more than the normal risk of collectability or present other features unfavorable to the Company. Since January 1, 2019,2021, we have not had any other transactions with related persons required to be disclosed under Item 404(a) of RegulationS-K, and no such transactions are currently proposed.
Under the Related Party Transactions policy, the General CounselChief Legal, Government Affairs and Communications Officer will notify the Chair of the NGCNominations and Governance Committee of any proposed Related Party Transaction, and the Chair of the NGCNominations and Governance Committee will determine if approval under the policy is required. If required, the NGCNominations and Governance Committee will then review the proposed Related Party Transaction and make a recommendation to the Board of Directors regarding whether to approve the transaction. In considering a transaction, the NGCNominations and Governance Committee takes into account whether a transaction would be on terms no less favorable than to an unaffiliated third-partythird party under the same or similar circumstances, among other factors.
Environmental, Social and Governance Practices
In conducting our business, we continually pursue practices that we believe will drive sustainable, long-term growth and profitability. Such “environmental, social, and governance” or “ESG” practices may mean different things to different investors and stakeholders and to the organizations that evaluate and rate ESG practices. For us,Our ESG practices mean we embrace the core principles of corporate responsibility and social purpose through everything we do for our customers, employees, communities, and environment. Our actions are shaped by our mission and purpose—helping families achieve the dream of a higher education. As an application of ESG practices, the Global Reporting Initiative Standards, themission—to power confidence as students begin
20202022 Proxy Statement —SLM CORPORATION 17
CORPORATE GOVERNANCE
Sustainability Accounting Standards Board, and the United Nations Sustainable Development Goals (“SDGs”) are considered a roadmap for corporations to serve the long-term goals of society. These SDGs include SDG4-Quality Education (“SDG 4”), which aims to ensure inclusive and quality education for all. We support the general goals of SDG 4 and agree that education is one of the most powerful and proven vehicles for sustainable development. We support the goal of universal access to quality higher education, whether it be for a degree program, continuing education, or certificate training.
At its core, education creates opportunities for individuals to realize their dreams, succeed, and lead more fulfilling and purposeful lives. Those who attend and graduate from college move forward with a wide range of personal, financial, and other lifelong benefits, including an ability to positively affect the outcomes ofunique journeys. In April 2022, we released our most significant societal challenges.
ESG at a Glance
We describe some of our key ESG practices in this section, but more details regarding ESG can be found in our inauguralthird Corporate Social Responsibility Report (“CSR Report”) that was published in March 2020 and available onreport, discussing our commitment to ESG practices. For a full discussion, please read our Corporate Social Responsibility report at http://www.salliemae.com. Neither the report nor our website athttp://www.salliemae.com/csr. The CSR Report is not incorporated by reference herein, and is not a part ofin this proxy statement or the 2019 Form10-K.statement.
Our Customers
As the premier financial brand for college and continuous education, we are in the business of building prosperous futures by providing access, planning outcomes, and helping students and families responsibly fund their future. Along with a company-wide commitment to honesty, dependability, and integrity, we are committed to:
Offering our customers a diversified set of fairly priced products;
Increasing our customers’ long-term financial stability;
Treating our customers and partners with respect;
Rewarding successful customer credit management(on-time payment incentive);
Contributing time and resources to improving our community; and
Creating a work environment that enables our employees to reach their potential.
These commitments form the foundation of our mutual success. In addition, we are committed to helping our next generation make informed decisions about their education. After all, education in all forms is the foundation for success, an equalizer of opportunities, and a proven pathway to economic mobility.
Human Capital ManagementEmpowerment and Talent Development
We valuebelieve in a just and inclusive, values-based, mission-led culture that inspires commitment and drives performance. Our human capital strategy is focused on the attraction, development, empowerment, recognition, and rewarding of team members as they bring our highly-skilled employees at all levels who helpmission to life.
We create a diverse culture of inclusion and an environment that encourages and reinforces mutual trust, makes it safe to express thoughts, ideas and concerns, and connects and embraces diverse backgrounds and perspectives to power and fuel our mission. We believe that a diverse and inclusive workforce can lead to a more effective company.
We are focused on providing a total compensation package that enables us drive sustainable, long-term growth,to attract, motivate, and profitability. We expressretain our appreciation through:
Policies and programs to identify, develop, retain, and promote talent from within our workforce;
Our management incentive plan and long-term incentive plan providing for cash and equity bonuses to employees to help incentivize employee productivity, which contributesdrive our business forward. Our benefits package includes company contributions to the 401(k), educational assistance to our success;team members and their dependents, flexible work arrangements, and other comprehensive health and welfare programs. We also believe in paying competitive market wages, which is why we established $20/hour as our new starting rate for all positions in 2021.
As of December 31, 2021, we had approximately 1,450 team members, all located in the United States. We believe an engaged workforce leads to a more innovative, productive, and profitable company. For this reason, we measure employee engagement through culture surveys. These culture surveys provide insights we use to create an environment in which team members thrive and bring their full selves to work.
Our policies intendedEnsuring the safety and well-being of our team members continues to be a priority during the COVID-19 pandemic. In March 2020, we enacted a robust business continuity plan, including remote working capabilities for all team members. We further adapted to the changing environment in 2021, and now offer remote, in-office, and hybrid options so our team may work in a manner best suited for them and their positions. We continue to provide equal opportunity for all employeesteam members with the tools and job applicants without regardresources necessary to race, ethnicity, religion, sex, sexual orientation, age, disability, national origin, marital status, citizenship status, protected veteran status, genetic information, gender identity, or any other basis prohibited by applicable law;support their success and drive performance of the Company.
Opportunities given to employees soOur team members are involved in the communities in which they may serve their communitieslive and work through the Sallie Mae Employee Volunteer Program and the Sallie Mae Employee Matching Gift Program. In 2021, our team members donated 1,128 hours through our community engagement programs. We also provide matching gifts for team members to support the interests and needs of them and their communities.
CommunityCorporate Governance
At Sallie Mae, we are passionate about getting involvedMae’s Board of Directors, executive leaders, team members, and giving back in the communities where we live and work. We strive to help create brighter futures by working directly withnot-for-profit organizations such as Big Brothers Big Sisters, Special Olympics, and Folds of Honor. Sallie Mae employees regularly volunteer in their communities, collecting and donating gifts to local families, educating grade school students on financial literacy and consumer finance, and packing meals for families in need.
18 SLM CORPORATION —2020 Proxy Statement
CORPORATE GOVERNANCE
Environmental Stewardship and Attention to Climate Change
We continue to make improvements at our facilities as webusiness partners are committed to improvingoperating under sound principles of corporate governance. We believe that maintaining high standards of accountability and transparency are fundamental for the environmental sustainabilitylong-term success of our business by using resourcesbusiness. Our corporate governance structure ensures robust Board and materials thoughtfully, allmanagement responsibility, responsiveness to our stockholders, and responsible decision-making. Our overarching code of which have a positive environmental impact onconduct, corporate governance policies, Board committee charters, certificate of incorporation, and By-Laws form the communities in which we operate. More broadly, our country’s environmental challenges are better and more meaningfully understood and addressed by an educated population.framework of governance at Sallie Mae is proudMae. Since the formation of the roleCompany, we playhave attracted and built a strong, qualified, and diverse Board of Directors whose members have expertise relevant to our business and are deeply committed to operating ethically and with integrity. Eleven members of the Board are independent directors, including Ms. Franke, the first female Board Chair in building a more educated and sustainable tomorrow.the Company’s history.
Our current policy on political activities is publicly available on our website atwww.salliemae.com under “For Investors” and sets forth the principles regarding our stance on political activities. We comply with federal, state, and local lobbying registration and disclosure requirements, and we do not engage in grassroots lobbying.requirements. We work closely with the NGCNominations and Governance Committee to review and reconsider our existing policies, procedures, and decision-making approaches to government relations and political activities.
At this time, we have one long-term, experienced employee engaged in lobbying activities exclusively related to matters that directly or indirectly affect the Private Education Loan (as hereinafter defined) industry and our mission. The compensation of the employee, and other executives, for time attributed to lobbying activity is reported as lobbying expenditure. That employee manages one external, bipartisan lobbying/consulting firmfirms that assistsassist with the same objectives, and we report the lobbying-related expenditures made to this firmexternal firms in our lobbying disclosures. Our involvement with industry associations is limited to those associations comprised of financial institutions with similar interests.
18 SLM CORPORATION — 2022 Proxy Statement
CORPORATE GOVERNANCE
Quarterly disclosures detailing our lobbying activities and expenditures, as required by the Lobbying Disclosure Act of 1995, are posted online by the Clerk of the U.S. House of Representatives and the Secretary of the U.S. Senate. Disclosures relating to contributions by our Political Action Committee are posted online by the Federal Election Commission (“FEC”). We will continue to comply with all applicable laws and regulations on disclosure of those activities.
At this time, we do not believe the preparation and dissemination of any additional reports on these matters would provide any meaningful information to our stockholders. We will continue to consider the value to stockholders of additional reporting of our political activities as our activities evolve, and review this matter periodically with the NGC Committee.
The Sallie Mae Political Action Committee (“PAC”)
In June 2015, we formed the Sallie Mae PAC. All of the assets and activities of its predecessor prior to theSpin-Off (the“Spin-Off”) of Navient Corporation (“Navient”) in April 2014 were assumed and taken over by Navient in connection with theSpin-Off.
Our PAC is governed by an Advisory Board comprised of six employees, who represent different divisions within the Sallie Mae organization. The PAC’s Advisory Board reviews and approves all PAC and corporate political contributions. The PAC’s Advisory Board evaluates candidates, of any party, on the basis offactors that include their views on issuespolicy matters that impact usSallie Mae and our employees, their committee or ourleadership role, and representation of Sallie Mae facilities and employees. It also takes note of whether our facilities or employees reside in a candidate’s district or state.
Our PAC contributions are published on the FEC website.
Stockholder Communications with the Board
Stockholders and other interested parties may submit communications to the Board of Directors, thenon-management directors as a group, the Lead Independent Director,Board Chair, or any other individual member of the Board of Directors by contacting the Lead Independent DirectorCorporate Secretary in writing atcorporatesecretary@salliemae.com orc/o Corporate Secretary, SLM Corporation, 300 Continental Drive, Newark, Delaware 19713.
We have a Code of Business Conduct that applies to Board of Directors members and all employees. The Code of Business Conduct is available on our website (www.salliemae.com under “For Investors”) and a written copy is available from the Corporate Secretary. We intend to post amendments to or waivers of the Code of Business Conduct, if any (to the extent applicable to the Company’s chief executive officer, principal financial officer, principal accounting officer, or any director), at this location on our website.
20202022 Proxy Statement —SLM CORPORATION 19
REPORTOFTHE AUDIT COMMITTEEOFTHE BOARDOF DIRECTORS
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 KPMG the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the Securities and Exchange Commission (the “Commission”). |
3. | The Audit Committee has received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB, regarding KPMG’s communications with the Audit Committee concerning independence, and has discussed with KPMG its independence. |
4. | The Audit Committee has an established charter outlining the practices it follows. The charter is available on the Company’s website atwww.salliemae.com under “For Investors.” |
5. | The Audit Committee’s charter requires thepre-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 on the following page were authorized and approved by the Audit Committee in compliance with thepre-approval requirements 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 of Directors has approved, that the audited financial statements be included in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, |
Audit Committee
Marianne M. Keler,Paul G. Child, Chair
Paul G. Child
Mary Carter Warren Franke
Mark L. LavelleMarianne M. Keler
Ted Manvitz
Jim Matheson
Vivian C. Schneck-Last
20 SLM CORPORATION —20202022 Proxy Statement
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ACCOUNTING FIRM
Independent Registered Public Accounting Firm Fees for 20192021 and 20182020
Aggregate fees billed for services performed for Sallie Mae by its independent accountant, KPMG, for fiscal years ended December 31, 20192021 and 2018,2020, are set forth below.
2019 | 2018 | |||||||
Audit Fees | $ | 2,110,910 | $ | 1,954,495 | ||||
Audit-Related Fees | $ | 546,000 | $ | 711,000 | ||||
Tax Fees | — | $ | 42,375 | |||||
All Other Fees | — | — | ||||||
Total | $ | 2,656,910 | $ | 2,707,870 |
2021 | 2020 | |||||||
Audit Fees | $ | 1,877,570 | $ | 1,938,773 | ||||
Audit Related Fees | $ | 1,110,000 | 1,040,000 | |||||
Tax Fees | 3,679 | — | ||||||
All other fees | — | — | ||||||
Total | $ | 2,991,249 | $ | 2,978,773 |
Audit Fees. Audit fees include fees for professional services rendered for the audits of the consolidated financial statements of Sallie Mae and statutory and subsidiary audits, issuance of comfort letters, consents, income tax provision procedures, and assistance with review of documents filed with the SEC.
Audit-Related Fees. Audit-related fees include fees for assurance and other services related to service provider compliance reports, trust servicing and administration reports, internal control reviews, and attest services that are not required by statute or regulation.
Tax Fees. Tax fees include fees for federal and state tax compliance, and tax consultation services.
All Other Fees. All other fees for the fiscal year ended December 31, 20192021 were $0. All other fees for the fiscal year ended December 31, 20182020 were $0.
The Audit Committee’s charter addresses the approval of audit andnon-audit services to be provided by the independent registered public accounting firm to the Company. The Audit Committee’s charter requires all services to be provided by our independent registered public accounting firm bepre-approved by the Audit Committee or its Chair. Each approval of the Audit Committee or the Chair of the Audit Committee must describe the services provided and set a dollar limit for the services. The Audit Committee, or its Chair,pre-approved all audit andnon-audit services provided by KPMG during 2019.2021. Reporting is provided to the Audit Committee regarding services the Chair of the Audit Committeepre-approved between committee meetings. The Audit Committee receives regular reports from management regarding the actual provision of all services by KPMG. No services provided by our independent registered public accounting firm were approved by the Audit Committee pursuant to the “de minimis” exception to thepre-approval requirement set forth in paragraph (c)(7)(i)(C) of Rule2-01 of RegulationS-X.
20202022 Proxy Statement —SLM CORPORATION 21
OWNERSHIPOF COMMON STOCKBY 5 PERCENTOR MORE HOLDERS
OWNERSHIP OF COMMON STOCK BY 5 PERCENT OR MORE HOLDERS
The following table provides information about each stockholder known to Sallie Mae to beneficially own five percent or more of the outstanding shares of our Common Stock, based solely on the information filed by each such stockholder (i) in 20202022 for the year ended December 31, 20192021 on Schedule 13G or 13G/A, or on Schedule13F-HR, as applicable, under the Exchange Act or (ii) on Schedule 13D as most recently filed, as applicable, under the Exchange Act.
Name and Address of Beneficial Owner | Shares(1) | Percent(1) | ||||||||
BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | 39,923,855 | 9.5% | ||||||||
The Vanguard Group, Inc.(3) 100 Vanguard Blvd. Malvern, PA 19355 | 39,270,863 | 9.3% | ||||||||
ValueAct Holdings, L.P.(4) 1 Letterman Drive, Building D, 4th Floor San Francisco, CA 94129 | 39,184,254 | 9.3% | ||||||||
T. Rowe Price Associates, Inc.(5) 100 E. Pratt Street Baltimore, MD 21202 | 23,639,245 | 5.5% | ||||||||
CI Investments Inc.(6) 2 Queen Street East, 20th Floor Toronto, Canada A6 M5C 3G7 | 21,914,233 | 5.2% |
Name and Address of Beneficial Owner | Shares(1) | Percent(1) | ||
The Vanguard Group, Inc.(2) | 33,855,794 | 11.55% | ||
BlackRock, Inc.(3) | 24,470,874 | 8.3% | ||
Massachusetts Financial Services Company(4) 111 Huntington Avenue Boston, MA 02199 | 17,587,780 | 6.0% | ||
Impactive Capital LP, Lauren Taylor Wolfe, and Christian Asmar(5) 152 West 57th Street, 17th Floor New York, New York 10019 | 15,485,159 | 5.5% |
(1) | Based on information in the most recent Schedule 13G or 13G/A, or Schedule |
(2) | Information is as of December 31, |
|
(3) | Information is as of December 31, 2021 and is based upon a Schedule 13G/A, filed with the SEC on February 1, 2022, by BlackRock, Inc., a Delaware corporation. The reporting entity reported the sole power to vote or direct the voting for 23,154,985 shares of Common Stock and the sole power to dispose of or direct the disposition of 24,470,874 shares of Common Stock. |
(4) | Information is as of December 31, |
(5) | Information is as of |
|
22 SLM CORPORATION —20202022 Proxy Statement
OWNERSHIPOF COMMON STOCKBY DIRECTORSAND EXECUTIVE OFFICERS
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 Named Executive Officers 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 February 28, 2020,2022, unless noted otherwise. As of February 28, 2020,2022, the Company had 419,962,492277,783,422 outstanding shares of Common Stock. 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 | Vested Options(1) |
Total | Percent of Class | Shares | Vested Options(1) |
Total | Percent of Class | |||||||||||||||||||||||||
Directors and Director Nominees | ||||||||||||||||||||||||||||||||
Paul G. Child | 52,693 | — | 52,693 | * | 70,863 | — | 70,863 | * | ||||||||||||||||||||||||
Mary Carter Warren Franke | 50,836 | — | 50,836 | * | 76,006 | — | 76,006 | * | ||||||||||||||||||||||||
Earl A. Goode | 128,365 | 4,804 | 133,169 | * | ||||||||||||||||||||||||||||
Marianne M. Keler(2) | 87,443 | — | 87,443 | * | ||||||||||||||||||||||||||||
Marianne M. Keler(3) | 105,613 | — | 105,613 | * | ||||||||||||||||||||||||||||
Mark L. Lavelle | 10,869 | — | 10,869 | * | 30,932 | — | 30,932 | * | ||||||||||||||||||||||||
Ted Manvitz | 6,847 | — | 6,847 | * | ||||||||||||||||||||||||||||
Jim Matheson | 45,092 | — | 45,092 | * | 66,336 | — | 66,336 | * | ||||||||||||||||||||||||
Frank C. Puleo | 139,487 | 4,804 | 144,291 | * | 163,546 | — | 163,546 | * | ||||||||||||||||||||||||
Raymond J. Quinlan | 1,011,283 | — | 1,011,283 | * | ||||||||||||||||||||||||||||
Samuel T. Ramsey | — | — | — | * | ||||||||||||||||||||||||||||
Vivian C. Schneck-Last | 44,783 | — | 44,783 | * | 62,953 | — | 62,953 | * | ||||||||||||||||||||||||
William N. Shiebler(3) | 65,364 | — | 65,364 | * | ||||||||||||||||||||||||||||
Robert S. Strong | 67,836 | — | 67,836 | * | 89,399 | — | 89,399 | * | ||||||||||||||||||||||||
Jonathan W. Witter(4) | — | — | — | — | 621,667 | — | 621,667 | * | ||||||||||||||||||||||||
Kirsten O. Wolberg | 26,081 | — | 26,081 | * | 44,926 | — | 44,926 | * | ||||||||||||||||||||||||
Named Executive Officers | ||||||||||||||||||||||||||||||||
Steven J. McGarry(5) | 220,077 | 15,168 | 235,245 | * | 259,895 | — | 259,895 | * | ||||||||||||||||||||||||
Paul F. Thome | 135,492 | 15,168 | 150,660 | * | ||||||||||||||||||||||||||||
Kerri A. Palmer | 2,482 | — | 2,482 | * | ||||||||||||||||||||||||||||
Daniel P. Kennedy | 188,795 | — | 188,795 | * | ||||||||||||||||||||||||||||
Donna F. Vieira | 9,373 | — | 9,373 | * | 43,203 | — | 43,203 | * | ||||||||||||||||||||||||
Nicolas Jafarieh(6) | 34,778 | — | 34,778 | * | ||||||||||||||||||||||||||||
Current Directors and Executive Officers as a Group (19 Persons) |
| 2,189,816 |
|
| 40,855 |
|
| 2,230,671 |
|
| * |
| ||||||||||||||||||||
Current Directors and Executive Officers as a Group (18 Persons) | 1,986,848 | — | 1,986,848 | * |
* | Represents beneficial ownership of less than 1 percent. |
(1) | Shares that may be acquired within 60 days of February 28, |
(2) | Includes 7,000 shares held by Ms. Franke’s spouse in his IRA. |
(3) | Includes 76,574 shares held in trust. |
Includes |
|
(5) | Includes |
|
20202022 Proxy Statement —SLM CORPORATION 23
EXECUTIVE OFFICERS
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. Witter is included in Proposal 1—Election of Directors.
Name and Age |
Position and Business Experience | |||
Daniel P. Kennedy | • Executive Vice President and Chief Operational Officer, SLM Corporation and President, Sallie Mae Bank—January 2021 to present; Executive Vice President and Chief Operational Officer, SLM Corporation—September 2020 to December 2020; Senior Vice President and Chief Operational Officer, SLM Corporation—August 2020 to September 2020; Senior Vice President and Chief Information Officer—May 2014 to August 2020 | |||
Steven J. McGarry
| • 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 | |||
| • Executive Vice President and Chief • Senior Vice President,
| |||
Donna F. Vieira
| • Executive Vice President and Chief Commercial Officer, SLM Corporation—August 2020 to present; Executive Vice President and Chief Marketing Officer, SLM Corporation—January 2019 to • Chief Marketing Officer, Consumer Banking and Wealth Management, JPMorgan Chase—May 2014 to October
• Senior Vice President, Relationship Manager, Dun & Bradstreet—March 2010 to April 2011 • Senior Vice President, General Manager Small Business Products, Dun & Bradstreet—July 2008 to March 2010 | |||
Jonathan R. Boyles
| • Senior Vice President, Controller, SLM Corporation—May 2014 to present; Vice President, Corporate Financial Reporting and Accounting Policy, SLM Corporation—May 2010 to April 2014 | |||
| • Executive Vice President and Chief Legal, Government Affairs & Communications Officer, SLM Corporation—April 2022 to present; Senior Vice President and Chief
| |||
|
|
24 SLM CORPORATION —20202022 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
COMPENSATION DISCUSSION AND ANALYSIS
25 | ||||||||
25 | ||||||||
25 | ||||||||
26 | ||||||||
26 | ||||||||
27 | ||||||||
29 | ||||||||
32 | ||||||||
33 | ||||||||
| 34 | |||||||
Risk | ||||||||
Other Arrangements, Policies, and Practices Related to Executive Compensation Programs | ||||||||
In this Compensation Discussion and Analysis (“CD&A”), we describe our compensation practices and programs in the context of our NEOs. It is worth noting our compensation practices and programs applicable to our NEOs in many cases also apply to senior executive employees other than our NEOs. In addition, as previously disclosed, on April 19, 2020, following his tenure as Chairman and CEO for the Company, Mr. Quinlan no longer serves as CEO and Mr. Witter was appointed CEO, effective as of April 20, 2020.
We continue to refine our executive compensation practices and programs through feedback from stockholders, alignment with our performance, and continuing assessments of competitive practices. We use these practices and programs to attract, motivate and retain our NEOs and other executives. In particular, we will explain how the NGC Committee of the Board of Directors made 2019 compensation decisions for our NEOs.
Our primary business is to originate and service high-quality Private Education Loans. “Private Education Loans” are education loans for students or their families that are not made, insured, or guaranteed by any state or federal government. We also offer a range of deposit products insured by the Federal Deposit Insurance Corporation and operate a consumer savings network that provides financial rewards on everyday purchases to help families save for college.Corporation. In 2019, nearly 456,0002021, more than 397,000 families chose us as their Private Education Loan provider, more than any other private student loan lender. We originated $5.6$5.4 billion of Private Education Loans, an increase of 62 percent from the year ended December 31, 2018.2020. As of December 31, 2019,2021, we had $22.9$19.6 billion of Private Education Loans held for investment, net, outstanding.
Our performance-based compensation programs, including our 2019 Managementthe 2021 Annual Incentive Plan, (“2019 MIP”which consists of a short-term annual cash bonus (the “2021 AIP”), and the performance-based elements of the LTIP, consisting of a grant of (i) premium priced stock options, which have an exercise price 15 percent higher than the closing price of our Common Stock on the grant date; and (ii) PSUs that vest solely based on a relative total shareholder return (“TSR”) measure that vests over a three-year period, focus our senior executives on goals whichthat drive our financial performance. performance while balancing risk and reward.
As discussed in more detail herein, our 2019 MIP2021 AIP encourages executives to focus on customer growth (through metrics such as private education loanthe Private Education Loan originations customer ease, andpre-tax,pre-provision income)metric), while both our 2019 MIP and PSU grants ensureensuring that such growth comes from high credit quality loans (through metrics such as weighted average origination FICO score for Private Education Loans, gross Private Education Loan defaults as a percentage of average loan balances in repayment, and cumulative charge-offs)the net charge-offs metric). In addition toOur 2021 performance-based compensation programs also include the more traditionalfollowing financial metrics (coremetrics: adjusted core earnings per share, operating expenses, and operating efficiency ratio), these goals focusedrelative TSR.
We believe this continued emphasis on performance-based compensation, as well as the continued focus on share value as a key metric for equity-based compensation, should further align our senior executives’ attentioncompensation with the interests of our stockholders.
While the Company closely monitored the impact of the COVID-19 crisis on increasing the number of Private Education Loans we originatedeconomy and our business, it was ultimately determined that no changes should be made to our executive compensation programs, including the 2021 AIP, in 2019.response to COVID-19.
20202022 Proxy Statement —SLM CORPORATION 25
COMPENSATION DISCUSSIONAND ANALYSIS
The compensation set forth in this CD&A, and the amounts provided by our NGC Committee and the Board of Directors in connection with the 2019 MIP and PSU grants, were determined before theCOVID-19 crisis was taken into account. The unfoldingCOVID-19 crisis, including its impact on the economy and our business, will be taken into account in reviewing and setting compensation for our NEOs on ago-forward basis.
Thepay-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 usestockholders as well as designed to attract and retain executives. For 2021, we used the following principles to implement our compensation philosophy and achieve our executive compensation program objectives:
Tie a significant portion of the total compensation of our executives to the achievement of enterprise-wide goals that drive shareholder value pursuant to the 2019 MIP, as described in further detail on page 34.stockholder value.
Focus executive compensation towardstoward long-term equity-based incentives to reward long-term growth and focus management on sustained success and shareholderstockholder value creation.
Grant PSUs tiedDo not consider amounts realized (or not) from prior annual incentive program or long-term incentive program compensation awards when setting any element of compensation payable to (i) cumulative charge-offs,(ii) pre-tax,pre-provision income, and (iii) total shareholder return (“TSR”) as a modifier to further alignan executive compensation with the long-term, sustainable performance of the Company.
Establish stock ownership guidelines that link the interests of our executives with our common stockholders.
Provide base salaries that are competitive and permit us to attract, motivate, and retain those executives who drive our success.
Provide competitive employee benefits and limited perquisites.officer.
For the fiscal year ended December 31, 2019,2021, our Named Executive Officers were:
Executive Officer | Steven J. McGarry Executive Vice | Kerri A. Palmer(1) Executive Vice President |
Kennedy(2) Executive Vice President and Chief | Donna F. Vieira Executive Vice President and Chief |
|
(1) |
|
(2) | On January 1, 2021, Mr. Kennedy was also appointed President of |
26 SLM CORPORATION —20202022 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
Compensation Practices Summary
What We Do
|
What We Don’t Do
| |||||
ü Tie significant portions of compensation to Company performance
ü Utilize the
ü Utilize an LTIP with a significant weighting
ü Annually review and refine all compensation programs and policies based on feedback from stockholders, our independent compensation consultant, and market best practices
ü Mitigate risk-taking by utilizing equity awards vesting over a three-year period, while placing caps on potential payments and maintaining equity (as well as cash bonus) clawback provisions, and utilizing a one-year holding period following the vesting of PSUs granted in 2021 and 2022
üRequire significant share ownership by the CEO, Executive Vice Presidents, and Senior Vice Presidents
ü
üAnnually assess risk of significant employee incentive compensation plans
üRetain an independent compensation consultant to advise on market practices and specific compensation programs
| × Since 2014, no individual employment agreements have been entered into with any executive officer
× No individualchange-in-control agreements
× No “single-trigger”change-in-control agreements
× No excise taxgross-ups
× No hedging or pledging of Common Stock
× No single-trigger accelerated settlement of equity awards
× No above-market returns on deferred compensation plans
× No pension benefits provided |
2022 Proxy Statement — SLM CORPORATION 27
COMPENSATION DISCUSSIONAND ANALYSIS
Stockholder Engagement &Say-on-Pay Results
STOCKHOLDER ENGAGEMENT | ||||||
Spring | Summer | Fall | Winter | |||
• Active outreach, if necessary, with institutional holders to discuss important governance items to be considered at Annual Meeting
• Publish annual communications to stockholders including the proxy statement and Form10-K • Publish annual Corporate Social Responsibility Report | • Conduct Annual Meeting
• Review results and feedback from Annual Meeting with institutional holders
• Share investor feedback with the Board of Directors
• Active outreach, if necessary, with institutional holders to discuss vote and follow up issues
• Conduct annual Board of Directors assessment of governance
| • Active outreach | • Perform peer group compensation analysis to ensure compensation is appropriate based on financial performance comparisons
• Review governance practices and trends, regulatory developments, and our governance framework |
2020 Proxy Statement —SLM CORPORATION 27
COMPENSATION DISCUSSIONAND ANALYSIS
We engage with our stockholders and proxy advisory firms throughout the year and provide stockholders with an annual opportunity to cast an advisorysay-on-pay vote. At our 20192021 annual meeting of stockholders, approximately 9689 percent of the votes present voted in favor of oursay-on-pay proposal. Additionally, in 20192021 management reached out to investors owning a majority of the outstanding shares and discussed our executive compensation program and other compensation-related matters with a number of them. Through our stockholder engagement and strongsay-on-pay vote, we gathered important information on how our compensation policies could continue to improve and continued practices that encourage sustainable long-term growth. We continue to focus on performance-based compensation for our NEOs as we (i) tie a significant portion of total NEO compensation to the achievement of performance metrics and goals pursuant to the 2019 MIPAIP and (ii) award a greatersignificant percentage, set at 75 percent, of each NEO’s LTIP in the form of PSUs. In 2019, we increased the amount of PSUs awarded to NEOs under the LTIP from 25 percent to 50 percent.and premium priced stock options. Stockholder engagement and the outcome of thesay-on-pay vote results will continue to inform future compensation decisions. Over the last five years, stockholders have strongly supported our executive compensation program, with 89% or more of the votes cast in support of the program each year.
HistoricalSay-on-Pay Vote
Annual Meeting Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2017 | 2018 | 2019 | 2020 | 2021 | |||||||||||||||||||||||||||||||||||
ForSay-on-Pay Vote |
| 86.8 | % |
| 87.1 | % |
| 89.6 | % |
| 92.2 | % |
| 96.0 | % |
| 89.6 | % |
| 92.2 | % |
| 96.0 | % |
| 94.4 | % |
| 89.3 | % |
28 SLM CORPORATION — 2022 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
Our stock generated a three-year total return for stockholders of negative 18.1145.6 percent from 20172018 through 2019,2021, compared to 4.371.8 percent for our peer group of companies, 36.085.9 percent for the S&P Supercomposite Consumer Finance Sub Industry Index, and 3.061.3 percent for the S&P 400 Regional BankSub-Industry Index. As of December 31, 2019,2021, we ranked in the 5th70th percentile of total returns for the three-year period of our peer group.
Total Shareholder Return
12/31/16-12/18-12/31/1921
* | For the full roster of members of our peer group, please refer to the section below on page |
Over the last three years, we have also increased Total Assets by 7610 percent and GAAP Diluted Earnings Per Common Share by 145 percent. During this three-year period, the Total Shareholder Return for the Company was negative 18.1237 percent.
Highlights of Company Performance
20192021 Net Income Attributable to Common Stock (calculated in accordance with Generally Accepted Accounting Principles (“GAAP”)) of $561$1,156 million, as compared to $472$871 million in the prior year.
$1.303.61 GAAP Diluted Earnings Per Common Share for 20192021, as compared to $1.07$2.25 for the prior year.
Private Education Loan Originations of $5.6$5.4 billion in 20192021, as compared to $5.3 billion in 2018,2020, a six2 percent increase year-over-year.
Private Education Loan held for investment portfolio, net, totaled $22.9$19.6 billion atas of December 31, 2019,2021, as compared to $18.4 billion as of December 31, 2020, a 136.4 percent increase from December 31, 2018.year-over-year.*
Total Assets of $32.7$29.2 billion atas of December 31, 20192021, as compared to $26.6$30.8 billion atas of December 31, 2018.2020.**
28 SLM CORPORATION —2020 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
Achievement of 2019 Management Objectives
In 2019, we set out the following major goals for ourselves: (1) prudently grow our Private Education Loan assets and revenues; (2) maintain our strong capital position; (3) continue our Personal Loan1 and credit card initiatives to increase the level of engagement with our existing customers and attract new customers; (4) manage operating expenses while improving efficiency; (5) maintain our strong governance, risk oversight and compliance infrastructure; and (6) leverage our culture to engage employees, recognize and reward contributions to business results, and develop talent to support our business strategy and growth.
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20202022 Proxy Statement —SLM CORPORATION 29
COMPENSATION DISCUSSIONAND ANALYSIS
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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 2019 Form10-K.
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30 SLM CORPORATION —2020 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
The charts below illustrate, for our former CEO and separately for the other NEOs in aggregate, the percentage of 20192021 compensation that consisted of base salaries, target annual bonuses (determined and paid in cash in early 2020)2022), and LTIP awards of restrictedRSUs, premium priced stock units (“RSUs”)options, and PSUs granted in early 2019.2021.
2020 Proxy Statement —30 SLM CORPORATION 31— 2022 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
The compensation program in 20192021 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 | Description | Objective | ||||||
Base Salary | Fixed cash compensation. Reviewed annually and adjusted as appropriate. | To provide a base level of cash compensation for senior executives based on level and responsibility. | ||||||
Annual Incentive Bonus | Variable compensation. Annual bonus amounts for | To encourage and reward senior executives for achieving annual corporate performance and individual goals. | ||||||
Long-Term Incentives | RSUs, PSUs, and | Multi-year variable compensation. Generally granted annually. In | To motivate and retain senior executives by aligning their interests with that of stockholders through sustained performance and growth. | |||||
Other | Health, welfare, and retirement benefits |
| To promote employee health and protect financial security. | |||||
Deferred Compensation 401(k) Savings Plan | Retirement benefit. The Sallie Mae 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. | To provide retirement planning opportunities. | ||||||
Severance benefits | Fixed cash compensation-based severance payments. Equity awards generally continue to vest on their terms after changes of control, involuntary terminations other than for cause, or if the grantee voluntarily ceases employment and meets our retirement eligibility requirements. For more information, see “Arrangements with Named Executive Officers” below on page | 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. | ||||||
Perquisites | Fixed compensation. Consists primarily of executive physical examinations and, in limited instances, housing relocation expenses, as well as directed charitable giving made by an affiliate, The Sallie Mae Fund, upon request of our employees. | To provide business-related benefits to assist in attracting and retaining key executives. |
2022 Proxy Statement32 — SLM CORPORATION —312020 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
How Our Compensation Decisions Are Made
Participant | Roles | |||
Board of Directors | • Independent members establish CEO’s compensation based on findings and recommendations of
• Receives report from | |||
| • Sets
• 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
• Reviews and approves all aspects of NEO • Reviews and recommends CEO compensation to the Board of Directors for approval.
• Approves and/or certifies annual achievement of | |||
| • Participates in development and delivery of CEO’s performance and compensation review. | |||
| • Participates in development and delivery of CEO’s performance and compensation review.
• Participates with CEO in final review and approval of all individual | |||
Chief Executive Officer | • Reviews performance of all other NEOs with
• | |||
Compensation Consultant | • Assists the | |||
Chief Risk Officer | • Conducts a risk assessment prior to the adoption of |
In establishing compensation levels and structures, policies, and performance for 2019,2021, the NGCCompensation Committee also considered the results of the annual“say-on-pay” advisory vote of stockholders, which received the approval of approximately 96.089.3 percent of the shares present in person or represented by proxy and entitled to vote on the matter at our 20192021 annual meeting of stockholders, and recommendations from stockholders as part of our stockholder outreach. Given the results of the stockholder advisory vote, the Compensation Committee’s ongoing review of our compensation programs, and feedback from our stockholders, the Compensation Committee believes that our existing executive compensation programs effectively align the interests of our NEOs with our short-term and long-term goals.
2020 Proxy Statement —32 SLM CORPORATION 33— 2022 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
2019 Management2021 Annual Incentive Plan for Named Executive Officers
The following are highlights of the 2019 MIP:2021 AIP:
Under the 2019 MIP, the NEOs’ annual bonuses were paid 100 percent in cash.
Core Net Operating Income served as the performance metric for establishing the initial funding pool at 200 percent of target for the 2019 MIP, which is then adjusted downward based on the underlying plan metrics described below.
Annual bonus awards for NEOs under the 2019 MIP were determined based on an 80 percent corporate performance component and a 20 percent individual performance component.
The following six corporate goalsfour funding metrics were utilized under the 2019 MIP2021 AIP at the following weightings:
Adjusted Core Earnings Per Share (35Share* (40 percent)
Private Education Loan Originations (25 percent)
Operating Efficiency Ratio (20Expenses (25 percent)
Gross Private Education Loan Defaults as a Percentage of Average Loan Balances in RepaymentNet Charge-Offs (10 percent)
Weighted Average Origination FICO Score for Private Education Loans (5 percent)
Customer Ease (5 percent)
Each NEO in the 2019 MIP2021 AIP had an established target bonus opportunity, with no guaranteed minimum (i.e., the actual bonus could be 0 percent of target).
Included a clawback and risk adjustment provision.
Chief Risk Officer completed a risk assessment and attestation of the 2019 MIP.2021 AIP.
Under the 2021 AIP, the NEOs’ annual bonuses were paid 100 percent in cash.
* | See “Appendix A – Reconciliation of Non-GAAP Financial Measures” for a more detailed explanation of “Adjusted Core Earnings Per Share” and a reconciliation to GAAP diluted earnings per share. |
ManagementAnnual Incentive Plan Goal Setting
Each year, management develops a rigorous business plan that reflects the Company’s strategy for achieving operating and financial results to enhance franchise value while prudently growing our business. The Company’s business plan was the source of the performance goals approved by the NGCCompensation Committee for purposes of setting our 2019 MIP targets.2021 AIP targets and funding metrics. These performance goals were carefully analyzed and subject to considerable review by the NGCCompensation Committee, with the advice of its independent compensation consultant.
Since ourestablishing Sallie Mae as a stand-alone consumer bank in April 2014, separation from Navient, we generally have been able to consistently enhance franchise value by growing assets and earnings, maintaining conservative credit standards, and providing excellent customer service. As a financial institution, our targetsfunding metrics for the 2019 MIP2021 AIP were designed to balance asset growth, credit quality, operating efficiency,expenses, and risk management and customer satisfaction, by utilizing a mix of financial metrics (core(adjusted core earnings per share and operating efficiency ratio)expenses), a customer growth metricsmetric (private crediteducation loan originationsoriginations), and customer ease) anda credit quality metrics (weighted average origination FICO and gross Private Education Loan defaults as a percentage of average loan balances in repayment)metric (net charge-offs).
In selecting objective performance metrics and establishing challenging target, threshold, and maximum levels, of required performance, the NGCCompensation Committee considered the upcoming year’s business objectives and outlook in light of the unique dynamics of the consumer-banking sector at that point in time. Rather than only examining and relying upon the prior year’s targets and actual results—which may not reflect the current year’s changes to our strategic business plan—and challenges affecting our industry, the NGCCompensation Committee’s goal setting considers particular and timely market trends that are likely to impact our business based on current activity, as well as our Company’s projected growth and other factors specific to our business.
Core Net Operating Income served as the performance metric for establishing the initial funding pool at 200 percent of target for the 2019 MIP. The NGC Committee used that financial metric for the initial bonus pool funding because it reflects the Company’s performance for the year at the broadest level. The Company calculated Core Net Operating Income for 2019 as the sum of (a) Core Earnings attributable to the Company’s Common Stock and (b) preferred stock dividends paidFour corporate metrics were established by the Company in 2019. For a description of how we calculate “Core Earnings” and for a reconciliation of “Core Earnings”Compensation Committee to determine the nearest comparable GAAP measure, see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results ofOperations-Key Financial Measures-Core Earnings” in our 2019 Form10-K. Based on forecasted financial results, the Core Net Operating Income target for the 2019 MIP was set at $450.8 million. This represents an increase of $90.7 million from the $360.1 million target for the 2018 MIP. Based upon the Company’s satisfactionfunding of the Core Net Operating Income target that had been set, the 2019 MIP funding pool was funded at 200 percent of target.2021 AIP.
2022 Proxy Statement34 — SLM CORPORATION —332020 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
Then, a combination of corporate metrics and individual performance goals were 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 percent and 20 percent, respectively.
For the corporate performance portion of the 2019 MIP, six corporate performance metrics were utilized. As discussed above, these four metrics were derived from management’s 20192021 objectives identified in our annual business plan. These metrics, their rationale, and the weightings at which they were set are discussed in the table below:
METRIC | WEIGHTING | RATIONALE FOR USING EACH METRIC | ||||
Adjusted Core Earnings Per Share | This is the primary metric used by management
Adjusted Core Earnings Per Share is a non-GAAP measure. The determination of Adjusted Core Earnings Per Share for 2021 starts with GAAP diluted earnings per common share for 2021, increases that amount by (i) the impact of derivative accounting(1) per common share for 2021 and (ii) the impact of the GAAP provision for credit losses per common share for 2021, and then decreases the resulting amount by the net charge-offs per common share for 2021, net of the tax impact of those adjustments. See Appendix A – Reconciliation of Non-GAAP Financial Measures for a more detailed explanation of Non-GAAP “Adjusted Core Earnings Per Share” and a reconciliation to GAAP diluted earnings per common share. For | |||||
Private Education Loan Originations | 25% | This measurement serves as a key indicator of the trajectory of our business, including our future earnings and asset growth.
For | ||||
Operating | This is a key measurement to evaluate the expense discipline of the Company regarding costs attributable to running our
For
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| 10% | This metric is used to measure the credit performance of our
For |
2020 Proxy Statement —SLM CORPORATION 35
COMPENSATION DISCUSSIONAND ANALYSIS
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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 our overall operating plan. Our NEOs were each eligible to receive bonuses up to a stated maximum percentage of their base salary, not to exceed $5 million, assuming the initial funding threshold is achieved.
2021 AIP Funding and Payout Computation
In May 2021, the Compensation Committee established the bonus pool funding metrics. In February 2022, the Compensation Committee, including the independent Board Chair, reviewed our relative achievement of the previously established bonus pool funding metrics, and after discussions with our CEO, determined that for the year ended December 31, 2021 the bonus pool should be funded at 127 percent based on
3634 SLM CORPORATION —20202022 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
In February 2019, the NGC Committee established the bonus pool funding and corporate performance goals. In January 2020, the NGC Committee and the Lead Independent Director reviewed our relative achievement of the previously established bonus poolfour funding and corporate performance goals, and after discussions with our former CEO, determinedmetrics as summarized in the table below. It is important to note that forthe Compensation Committee monitored the impact of the COVID-19 pandemic on the Company’s business throughout the year ended December 31, 2019: (i)and determined no changes or adjustments to the bonus pool should be funded at the maximum level of 200 percent of target based on the achievement of Core Net Operating Income of $563.6 million; and (ii) the weighted achievement2021 AIP were necessary as a result of the 2019 MIP corporate performance goals was attained at a level of 97.0 percent of the targets set under the 2019 MIP.pandemic.
Application of the 2019 MIP2021 AIP funding score, based on the corporate performance goalsfour funding metrics approved in February 2019,May 2021, resulted in the following outcomes:following:
(Dollars in Millions, except per share amounts)
Corporate Performance Goal | Min | Target | Max | Actual Performance | Award Factor | Weighting | Corporate Performance Score | ||||||||||||||||||||||||||||
Core Earnings Per Share | $ | 1.166 | $ | 1.266 | $ | 1.366 | $ | 1.269 | 102% | 35 | % | 35.6 | % | ||||||||||||||||||||||
Private Education Loan Originations(1) | $ | 5,450 | $ | 5,700 | $ | 5,950 | $ | 5,625 | 85% | 25 | % | 21.2 | % | ||||||||||||||||||||||
Operating Efficiency Ratio(2) | 38.2% | 34.7% | 31.2% | 34.7% | 99% | 20 | % | 19.8 | % | ||||||||||||||||||||||||||
Gross Private Education Loan Defaults (as % of Average Loan Balances in Repayment)(3) | 1.74% | 1.33% | 0.91% | 1.34% | 98% | 10 | % | 9.8 | % | ||||||||||||||||||||||||||
Customer Ease(4) | 87% | 93.5% | 100% | 94.8% | 110% | 5 | % | 5.5 | % | ||||||||||||||||||||||||||
Weighted Average Origination FICO Score for Private Education Loans | 735 | 745 | 755 | 746 | 101% | 5 | % | 5.1 | % | ||||||||||||||||||||||||||
Total | 97.0 | % |
Funding Metric | Min | Target | Max | Actual Performance | Award Factor | Weighting | Funding Score | |||||||||||||||||||||
Adjusted Core Earnings Per Share | $ | 2.34 | $ | 2.59 | $ | 3.09 | $ | 3.11 | 200% | 40 | % | 80.0 | % | |||||||||||||||
Private Education Loan Originations(1) | $ | 5,450 | $ | 5,700 | $ | 6,200 | $ | 5,423 | 0% | 25 | % | 0.0 | % | |||||||||||||||
Operating Expenses | $ | 580 | $ | 530 | $ | 430 | $ | 519 | 111% | 25 | % | 27.8 | % | |||||||||||||||
Net Charge-Offs | $ | 295 | $ | 270 | $ | 220 | $ | 201 | 200% | 10 | % | 20.0 | % | |||||||||||||||
Total | 127.8 | % |
(1) | The Company did not achieve the |
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Applying the 2019 MIPWith a 2021 AIP funding score of 97.0127.8 percent, and the NGC Committee’s assessment ofCompensation Committee assessed each NEO’s individual achievements, which are discussed inperformance against outcome-based goals as further detaildetailed in the section titled “NEO Achievements” below,below. Each NEO’s respective individual performance was assessed on the following three areas: (i) delivering against investor expectations; (ii) executing our strategic imperatives; and (iii) enhancing the general strength of the organization. With respect to the 2021 AIP, as in prior years, the Compensation Committee had discretion to increase or reduce any bonus amount, including down to zero, that would otherwise be earned or payable to any participant and to take into account assessment of any other additional factors. The annual bonus payment to each NEO under the 2019 MIP and its components are2021 AIP is set forth below.
Named Executive Officer | Target Bonus as a % of Base Salary | 2019 Target Bonus | 2019 Corporate Performance Bonus Component(1) | 2019 Individual Performance Bonus Component | 2019 Total Actual Bonus | ||||||||||||||||||||
Raymond J. Quinlan | 150 | % | $ | 1,395,000 | $ | 1,082,520 | $ | 279,000 | $ | 1,361,520 | |||||||||||||||
Steven J. McGarry | 150 | % | $ | 750,000 | $ | 582,000 | $ | 150,000 | $ | 732,000 | |||||||||||||||
Paul F. Thome | 125 | % | $ | 562,500 | $ | 436,500 | $ | 118,125 | $ | 554,625 | |||||||||||||||
Donna F. Vieira | 125 | % | $ | 562,500 | $ | 436,500 | $ | 118,125 | $ | 554,625 | |||||||||||||||
Nicolas Jafarieh | 100 | % | $ | 425,000 | $ | 329,800 | $ | 89,250 | $ | 419,050 |
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2020 Proxy Statement —SLM CORPORATION 37
COMPENSATION DISCUSSIONAND ANALYSIS
Named Executive Officer | Target Bonus as a % of Base Salary | 2021 Target Bonus | 2021 AIP Payout | |||||||||
Jonathan W. Witter | 150 | % | $ | 1,425,000 | $ | 1,809,750 | ||||||
Steven J. McGarry | 150 | % | $ | 750,000 | $ | 900,000 | ||||||
Kerri A. Palmer | 125 | % | $ | 687,500 | $ | 800,000 | ||||||
Daniel P. Kennedy | 125 | % | $ | 593,750 | $ | 700,000 | ||||||
Donna F. Vieira | 125 | % | $ | 593,750 | $ | 655,000 |
20192021 NEO Long-Term Incentive Program
In connection with our 20192021 NEO LTIP awards, the NGCCompensation Committee utilized a combination of (i) 5025 percent RSUs vesting inone-third increments over each anniversary of the grant date, and (ii) 5025 percent PSUs vesting in 20222024 upon certification by the NGCCompensation Committee as to satisfactionthe achievement of the tworelative TSR performance factors and TSR modifiermetric with a one-year holding period after vesting as described in more detail below.below, and (iii) 50 percent premium priced stock options that cliff vest in three years with an exercise price set at a 15 percent premium above the closing price of the Common Stock on the date of grant of the options. Our 20192021 LTIP grants are intended to provide long-term incentive and performance-based compensation to our NEOs in order to retain and attract highly qualified executives and tie their performance to the performance of our Company, thus aligning their interests with the interests of our stockholders.
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• For the NEOs
• vest between 0 percent
• vest upon the
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Cumulative Charge-offs
We believe that emphasis on maintaining the credit quality of our Private Education Loans over the next three years is of critical importance to the Company. To measure our success, we selected cumulative charge-offs of our cohort of Private Education Loans first entering full principal and interest repayment status during the fourth quarter of 2018 as the relevant PSU credit quality metric2022 Proxy Statement. — SLM CORPORATION 35Cumulative charge-offs are a critical focus of the Company and are, therefore, a measure used in our awards of PSUs. Accordingly, we believe that linking our equity grants to cumulative charge-offs creates an appropriate way to measure and reward performance and drive profitable growth.
Pre-Tax,Pre-Provision IncomeCOMPENSATION DISCUSSIONAND ANALYSIS
We believe thatpre-tax,pre-provision income is an important measure of the Company’s current and future financial success. This metric measures the health of the business and reflects our ability to increase loan originations and effectively fund our loans. In addition, this metric evaluates our discipline in controlling expenses to support the Company’s loan growth.Pre-tax,pre-provision income is calculated by adding net interest income andnon-interest income (excluding the impact from indemnified tax positions and gains/losses on derivatives and hedging activities, net) less totalnon-interest expense for the year ended December 31, 2021.Pre-tax,pre-provision income is an important metric for the Company as it correlates net interest income and operating expenses, two important metrics in determining our success, and is therefore a measure used in our awards of PSUs. Accordingly, we believe that linking our equity grants topre-tax,pre-provision income creates an appropriate additional way to measure and reward long-term performance and drive profitable growth.
Relative TSR
We believe relative TSR, used as a modifierthe sole PSU performance metric, is important because it correlates directly with the Company’s stock price performance, which further aligns the interests of our management with those of our stockholders. Our relative TSR will be evaluated as comparedby comparing the Company’s stock price performance to a defined set of comparable companies based on size, volatility, stock price correlation, and industry.
We annually review the metrics (and related target levels) used in our long-term incentive programs to ensure they remain aligned with our strategic plan and the interest of our stockholders. The PSU goals aregoal is derived from a rigorous process that involved input and discussions among the NGCCompensation Committee, our former CEO, the Chief Financial Officer, internal human resources, finance personnel, risk management, legal, and the NGC’sCompensation Committee’s independent compensation consultant, and legal advisors.
38 SLM CORPORATION —2020 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
consultant.
The table below sets forth the value of LTIP awards granted in January 2019February 2021(1):
Named Executive Officer | 2019 LTIP RSUs ($) | 2019 LTIP PSUs(1) ($) | 2019 LTIP Total ($) | ||||||||||||
Raymond J. Quinlan | $ | 1,750,000 | $ | 1,750,000 | $ | 3,500,000 | |||||||||
Steven J. McGarry | $ | 325,000 | $ | 325,000 | $ | 650,000 | |||||||||
Paul F. Thome | $ | 275,000 | $ | 275,000 | $ | 550,000 | |||||||||
Donna F. Vieira(2) | — | — | — | ||||||||||||
Nicolas Jafarieh | $ | 225,000 | $ | 225,000 | $ | 450,000 |
Named Executive Officer | 2021 LTIP RSUs ($) | 2021 LTIP PSUs(2) ($) | 2021 LTIP Options(3) ($) | 2021 LTIP Total ($) | ||||||||||||
Jonathan W. Witter | $ | 1,000,000 | $ | 1,000,000 | $ | 2,000,000 | $ | 4,000,000 | ||||||||
Steven J. McGarry | $ | 225,000 | $ | 225,000 | $ | 450,000 | $ | 900,000 | ||||||||
Kerri A. Palmer | $ | 175,000 | $ | 175,000 | $ | 350,000 | $ | 700,000 | ||||||||
Daniel P. Kennedy | $ | 175,000 | $ | 175,000 | $ | 350,000 | $ | 700,000 | ||||||||
Donna F. Vieira | $ | 175,000 | $ | 175,000 | $ | 350,000 | $ | 700,000 |
(1) | The dollar value amounts of the respective LTIP awards granted to each of the NEOs in 2021 as shown in this table differ from the Summary Compensation Table and the 2021 Grants of Plan-Based Awards Table disclosure due to differences in the accounting valuation of the equity awards on the grant date. |
(2) | PSUs granted in |
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Material factors considered in the Committee’s assessment of individual performance for 20192021 include:
NEO |
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2020 Proxy Statement —SLM CORPORATION 39
COMPENSATION DISCUSSIONAND ANALYSIS
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ACHIEVEMENTS | |||
Jonathan W. Witter,
Director and Chief | •
• Expanded the
• Maintained
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Company by (i) enhancing and
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4036 SLM CORPORATION —20202022 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
NEO |
ACHIEVEMENTS | |||
Steven J. McGarry, Executive Vice President and Chief Financial Officer | • Led the Company’s efforts to maintain a rigorous and predictable capital allocation and return program to create shareholder value by successfully managing (i) a Common Stock tender offer, (ii) repurchases of common stock, (iii) various loan sales, and (iv) unsecured debt issuances; • Oversaw the Company’s maintenance of appropriate levels of capital to support the Bank; • Supported the Company’s efforts to maximize the profitability of the core student loan business through the appropriate management of the Bank’s exposure to interest rate risk; and • Supported the Company’s relentless focus on improving its efficiency by overseeing a rigorous budgeting process. | |||
Kerri A. Palmer, Executive Vice President and Chief Risk Officer | • Led the cultural and programmatic integration of the Risk and Compliance functions and introduced new governance routines; • Drove effectiveness of risk reporting to the Board of Directors by strengthening reporting processes and content quality; • Led the efforts to formalize the focus on building next generation risk management capabilities; and • Strengthened relationships with regulatory agencies. | |||
Daniel P. Kennedy, Executive Vice President and Chief Operational Officer and President of Sallie Mae Bank | • Appointed as President of the Bank and assumed leadership responsibility for relationships with banking regulators; • Led the delivery of a series of enhancements to the Company’s credit administration practices; • Oversaw the Company’s ongoing response to the COVID-19 pandemic to enable employees to work in an effective and safe environment; and • Continued to focus on operating efficiency by reducing the Company’s cost to service its loan portfolio. | |||
Donna F. Vieira, Executive Vice President and Chief |
• • Drove year-over-year efficiency gains in unit cost to acquire new loans while continuing to unlock value of
• Launched new
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The following table summarizes performance-year 2021 compensation for the NEOs as approved by the Compensation Committee:
Name |
Base Salary |
Annual Incentive Plan |
Long Term Incentive Plan* | |||||||||
Jonathan W. Witter | $ | 950,000 | $ | 1,809,750 | $ | 4,000,000 | ||||||
Steven J. McGarry | $ | 500,000 | $ | 900,000 | $ | 900,000 | ||||||
Kerri A. Palmer | $ | 550,000 | $ | 800,000 | $ | 700,000 | ||||||
Daniel P. Kennedy | $ | 475,000 | $ | 700,000 | $ | 700,000 | ||||||
Donna F. Vieira | $ | 475,000 | $ | 655,000 | $ | 700,000 |
* | The total LTIP dollar values as shown in this table differ from the Summary Compensation Table and the 2021 Grants of Plan-Based Awards Table disclosure due to differences in the accounting valuation of the equity awards on the grant date. |
20202022 Proxy Statement —SLM CORPORATION 4137
COMPENSATION DISCUSSIONAND ANALYSIS
The following table summarizes performance year 2019 compensation for the NEOs as approved by the NGC Committee:
Name |
Base Salary |
Management Incentive Plan |
Long Term Incentive Plan | ||||||||||||
Raymond J. Quinlan(1) | $ | 930,000 | $ | 1,361,520 | $ | 3,500,000 | |||||||||
Steven J. McGarry | $ | 500,000 | $ | 732,000 | $ | 650,000 | |||||||||
Paul F. Thome(2) | $ | 450,000 | $ | 554,625 | $ | 550,000 | |||||||||
Donna F. Vieira(3) | $ | 450,000 | $ | 554,625 | $ | 450,000 | (4) | ||||||||
Nicolas Jafarieh | $ | 425,000 | $ | 419,050 | $ | 450,000 |
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Vesting of the 20172019 PSU Grants
In 2017, 202019, 50 percent of the LTIP award granted to Messrs. Quinlan,Mr. McGarry and Thome consisted of PSUs that vested in January 2020March 2022 at 150179 percent of target based on (i) cumulative charge-offs of 3.503.3 percent from 2017-20192019 — 2021 of the cohort of Private Education Loans first entering full principal and interest repayment status during the fourth quarter of 20162018 as detailed in the table below:below (150 percent of the metric’s target); (ii) pre-tax, pre-provision income of $1,517,607,997 as detailed in the table below (136.39 percent of the metric’s target); and (iii) a relative TSR modifier in the 88th percentile as detailed in the table below (125 percent of modifier to PSU award):
Cumulative Charge-offs Performance Chart (50% weight) for 20172019 PSU Grant
Based on Performance Period from January 1, 20172019 through December 31, 2019:2021:
Cumulative Charge-offs |
Percentage of Award — PSU Payout | ||||
£4.0% | 150% | ||||
4.5% | 125% | ||||
5.0% | 100% | ||||
5.5% | 75% | ||||
6.0% | 50% | ||||
6.5% | 25% | ||||
>6.5% | 0% |
Cumulative Charge-offs |
Percentage of Target Award — PSU Payout (50% weight) | |
≤4.0% | 150% | |
4.25% | 125% | |
4.75% | 100% | |
5.25% | 75% | |
5.5% | 50% | |
5.75% | 25% | |
>5.75% | 0% |
Pre-tax, Pre-provision Income December 31, 2021 Performance Chart (50% weight)
for 2019 PSU Grant
Pre-tax, pre-provision December 31, 2021 Income |
Percentage of Target Award – PSU Payout (50% WEIGHT) | |
>$1,553,000,000 | 150% | |
$1,553,000,000 | 150% | |
$1,164,000,000 to $1,423,000,000 | 100% | |
$1,035,000,000 | 50% | |
<$1,035,000,000 | 0% |
TSR Modifier based on the performance period from January 1, 2019 to December 31, 2021
TSR of the Corporation relative to TSR of the Peer Group | Percentage of Modifier to | |
≤25% | -25% | |
>75% | +25% |
Pursuant to the terms of the 20172019 PSU awards, in January 2020,March 2022, the NGCCompensation Committee approved and certified the actual performance of (i) the cumulative charge-offs performance goal for the performance period from January 1, 20172019 through December 31, 20192021 relative topre-established targetstargets; (ii) the pre-tax, pre-provision income performance goal as of December 31, 2021 relative to pre-established targets; and (iii) the TSR modifier based on the performance period from January 1, 2019 through December 31, 2021.
Accordingly, because It is important to note that the cumulative charge-offs forCompensation Committee monitored the relevant cohort were 3.50 percent, in January 2020, Messrs. Quinlan, McGarry,impact of the COVID-19 pandemic on the Company’s business throughout the year and Thome received the following number of shares of common stock pursuantdetermined no changes or adjustments to the vesting of their 2017 PSU grants:
Name
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Actual Shares Number of
| ||||||||
Raymond J. Quinlan | 57,251 | 86,961 | ||||||||
Steven J. McGarry | 10,178 | 15,459 | ||||||||
Paul F. Thome | 7,633 | 11,594 |
|
Mr. Jafarieh and Ms. Vieira did not receive2019 PSUs in 2017, and thus did not have any PSU grants that vested in January 2020.should be made notwithstanding the pandemic.
4238 SLM CORPORATION —20202022 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
Accordingly, because the 2019 PSUs vested at 179 percent of target, in March 2022, Mr. McGarry received the following number of shares of Common Stock pursuant to the vesting of his 2019 PSU grants:
Name |
Target Number of
|
Actual Shares Number of
| ||
Steven J. McGarry | 31,077 | 55,628 |
(1) | Includes Dividend Equivalent Units. |
Mr. Witter, Ms. Palmer, Mr. Kennedy, and Ms. Vieira did not receive PSUs in 2019, and thus did not have any PSU grants that vested in March 2022.
Risk AssessmentAssessments and Attestations of Compensation Plans
The Chief Risk Officer (“CRO”) coordinates theforward-looking risk assessmentassessments, backward-looking attestations, and ongoing oversight of Sallie Mae’s incentive compensation plans with a cross-functional team of Sallie Mae’s senior officers from the risk, human resources, internal audit, compliance, and legal departments. The CRO’s responsibilities include: oversight of the annual forward-looking risk reviewassessments and assessmentbackward-looking attestations of our incentive compensation plans to help ensure our employees are not incentedincentivized to take inappropriate risks that could impact our financial position and controls, reputation, and operations; and to developdeveloping policies and procedures to help ensure our incentive compensation plans are designed to achieve their business goals within acceptable risk parameters. The CRO periodically reports to the NGCCompensation Committee on the controls andresults of the reviews of our incentive compensation plans.
TheAs part of the annual forward-looking risk assessment in 2021, the CRO presented his conclusions to the NGCCompensation Committee, and the NGCCompensation Committee agreed, that with respect to our 2019 MIP2021 AIP and LTIP, the risks embedded in those plans were within our ability to effectively monitor and manage, properly balancedbalance risk and reward, and were not likely to promote excessive risk-taking. In addition, as part of the annual backward-looking attestation of incentive compensation plans, in the first quarter of 2022, the CRO presented a review and conclusions to the Compensation Committee, that confirmed our incentive compensation plans, including the 2021 AIP and LTIP, are sufficiently risk sensitive, do not encourage excessive risk-taking, and are consistent with the safety and soundness of Sallie Mae and are otherwise consistent with applicable law and the applicable regulatory rules and guidance.
The NGCCompensation Committee retains an independent compensation consultant to advise on relevant market practices and specific compensation programs. A representative of the compensation consultant attended meetings of the NGCCompensation Committee, as requested, and communicated with the Chair of the NGCCompensation Committee. Frederic W. Cook & Co., Inc. served as the Compensation Committee’s compensation consultant from May 2015 to September 2021. Commencing September 2021, Aon’s Human Capital Solutions practice, a division of Aon PLC (otherwise known as McLagan), has served as our compensation consultant (the “Compensation Consultant”) since May 2015. Since its appointment, some of the services the Compensation Consultant hasCommittee’s compensation consultant. The compensation consultants have provided have included:the following services, among other things:
Assistingassisting in developing a peer group of companies for benchmarking director and executive compensation;
Providingproviding market-relevant information as to the composition of director and executive compensation;
Providingproviding views on the reasonableness of amounts and forms of director and executive compensation;
Assistingassisting the NGCCompensation Committee with incentive plan design decisions;
Providingproviding guidance on regulatory changes; and
Reviewingreviewing drafts and commenting on the Compensation Discussion and Analysis and related compensation tables for the proxy statement.
From time to time, but no less than annually, the NGCCompensation Committee considers the independence of the Compensation Consultant in light of SEC rules and NASDAQ listing standards. At this time, the NGCCompensation Committee has concluded there is no conflict of interest with regard to either of the Compensation Consultant.compensation consultants.
2022 Proxy Statement — SLM CORPORATION 39
COMPENSATION DISCUSSIONAND ANALYSIS
Compensation Committee Interlocks and Insider Participation
All members of the NGCCompensation Committee are independent directors, and no current member is or has been an employee of Sallie Mae. During 2019,2021, none of our executive officers served on a compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on the NGCCompensation Committee.
The NGCRecognizing that the Company has a limited number of direct peer companies, the Compensation Committee works with the Compensation Consultantcompensation consultant to select a financial services peer group for purposes of identifying and considering comparativemarket compensation data in determining the compensation of our CEO and other NEOs. The peer group, which is periodically reviewed and updated by the NGCCompensation Committee, consists of companies selected by the NGC Committee that are similar in size (revenue and market capitalization) and in the same industrygenerally similar industries as the Company and with whom the Company may compete for executive talent. The following changes were made to the peer group in 2019:2021: (i) removing the removal of MBfollowing ten traditional bank peers that have relatively limited consumer lending portfolios: Bank OZK, First Republic Bank/CA, Hancock Whitney Company, PacWest Bancorp, Signature Bank, SVB Financial due to the completion of its acquisition by Fifth
2020 Proxy Statement —SLM CORPORATION 43
COMPENSATION DISCUSSIONAND ANALYSIS
ThirdGroup, Texas Capital Bancshares, Inc., Valley National Bancorp, and (ii) the addition of BankUnited, SynovusWebster Financial Corp., and Valley National Bancorp asWestern Alliance Bancorporation; and (ii) adding the respective companies are commonly included as peers among the current members of our peer group. following eight new specialty lenders / fintech firms focusing on consumer-based lending and/or financial education and wellbeing: Ally Financial Inc., Axos Financial Inc., Credit Acceptance Corp., Enova International Inc., Lending Club Corp., LendingTree Inc., OneMain Holdings Inc., and Upstart Holdings Inc.
The peer group utilized for purposes of setting NEO compensation components is as follows:follows:
Peer Group | ||
| LendingClub Corp. | |
Axos Financial Inc. | LendingTree Inc. | |
BankUnited Inc. | OneMain Holdings Inc. | |
Commerce Bancshares Inc. | Prosperity Bancshares, Inc. | |
|
| |
|
| |
| Synovus Financial Corp. | |
|
| |
|
| |
|
| |
|
|
The NGCCompensation Committee believes it is appropriate to continuously monitor relative compensation amounts with respect to the same peer group used by management and the Board of Directors for financial performance comparisons.
Other Arrangements, Policies, and Practices Related to Executive Compensation Programs
Share Ownership Guidelines
As of December 31, 2019,2021, the guidelines for beneficial ownership of our Common Stock, which are expected to be achieved over a five-year period from date of hire or appointment, were as follows:
CEO (formerly Mr. Quinlan)(Mr. Witter)—lesser of 1 million shares or $5 million in value;
Executive Vice President (Mr.(including Mr. McGarry, Ms. Palmer, Mr. Thome,Kennedy, and Ms. Vieira)—lesser of 200,000 shares or $1 million in value; and
Senior Vice President (Mr. Jafarieh)—lesser of 70,000 shares or $350,000 in value.
The guidelines encourage continued beneficial ownership of a significant amount of our Common Stock acquired through equity awards and help align the interests of senior executives with the interests of our stockholders. Executives generally must hold all Common Stock acquired through equity grants until the applicable thresholds are met, and an executive will not be eligible to receive further equity grants for the year if he or she sells the stock and such sale would result in a decrease below the established thresholds.
All current NEOs were in compliance with the share ownership guidelines as of December 31, 20192021 or are expected to achieve compliance within the applicable five-year period.
40 SLM CORPORATION — 2022 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
In January 2022 the Compensation Committee approved changes to the share ownership guidelines in order to continue to align the interests of our executives with our stockholders. As of April 1, 2022 (the effective date of the updated guidelines), the share ownership guidelines are as follows:
CEO (Mr. Witter)—six times the CEO’s annual base salary;
Executive Vice President (including Mr. McGarry, Ms. Palmer, Mr. Kennedy, and Ms. Vieira)—three times the Executive Vice President’s annual base salary; and
Senior Vice President—1.5 times the Senior Vice President’s annual base salary.
In addition, the updated guidelines remove the time limit to achieve such minimum beneficial ownership of our Common Stock and provide for a percentage of net shares that can be sold before the individual achieves such guidelines.
Hedging and Pledging Prohibition
Pursuant to the Company’s Stock Trading Window Policy, we prohibit directors, executive officers, and senior management from selling Common Stock short, buying or selling call or put options or other derivatives, or entering into other transactions that have the effect of hedging the economic value of any of their beneficial ownership of our shares.
Pursuant to the Company’s Stock Trading Window Policy, we also prohibit directors, executive officers, and senior management from purchasing Common Stock on margin or otherwise pledging Common Stock as collateral for a loan.
We prohibit hedging and pledging by our directors, executive officers, and senior management because they have the greatest ability to influence the direction of the Company and have a proportionally higher equity ownership than other employees generally. Accordingly, we expect our directors, executive officers, and senior management to bear the risks and rewards of stock ownership. We believe that prohibiting hedging and pledging of Company securities by our directors, executive officers, and senior management is an important governance matter because it promotes alignment with our stockholders.
Clawback
Equity and cash bonus awards made to executives, including our NEOs, under the SLM Corporation 2021 Omnibus Incentive Plan (the “2021 Plan”) as well as the SLM Corporation 2012 Omnibus Incentive Plan (the “2012“Predecessor Plan”) currently contain clawback provisions in the event of a material misstatement of our financial results and certain other events.
44 SLM CORPORATION —2020 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
In addition, in November 2021, the Compensation Committee approved a new Incentive Compensation Adjustment Policy outlining the Compensation Committee’s authority and responsibilities to review and potentially adjust employee incentive compensation, including reducing or eliminating incentive compensation, and/or clawing back previously paid compensation.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16 of the Exchange Act requires Sallie Mae’s executive officers and directors, as well as persons who beneficially own more than 10 percent of the Common Stock, to file reports on their holdings of and transactions in our Common Stock. Based solely on a review of the copies of such forms in our possession and on written representations from reporting persons, we believe that during the fiscal year 20192021 all required reports were filed in a timely manner.
Tax Information: Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code limits the tax deductibility of compensation for certain executive officers that is more than $1 million. Prior to the enactment of the Tax Cuts and Jobs Acts of 2017, Section 162(m) provided an exemption from this deduction limitation for compensation that qualified as “performance-based compensation.” However, among other changes to Section 162(m), the exemption for performance-based compensation was repealed, effective for taxable years beginning after December 31, 2017, subject to transition relief for certain arrangements in place as of November 2, 2017.
The NGCCompensation Committee continues to have the flexibility to paynon-deductible compensation if it believes it is in the best interests of the Company.
Nominations, Governance and Compensation Committee—Delegation of Authority
Pursuant to the NGCCompensation Committee Charter and to the extent permitted by applicable law, rules, or regulations, the NGCCompensation Committee may form and delegate all or a portion of its authority to subcommittees comprisedcomposed of one or more members of the NGCCompensation Committee or to members of the Company’s management. Each subcommittee has the full power and authority of the NGCCompensation Committee as it relates to matters delegated to the subcommittee.
2022 Proxy Statement — SLM CORPORATION 41
COMPENSATION DISCUSSIONAND ANALYSIS
In addition, pursuant to the 20122021 Plan, the NGCCompensation Committee has delegated limited authority to a subcommittee consisting of our Chairman and CEO (who is a director) and the Chair of the NGCCompensation Committee to approve bonuses, including RSUs, paid under the 2019 MIP tonon-NEO employees. The NGCCompensation Committee has also delegated limited authority to our Chairman and CEO (who is a director) to make grants to new hires as well as promotional and/or special one-time, grants to employees who are not subject to Section 16(b) of the Exchange Act. Neither subcommittee is permitted to grant awardsmake grants to our NEOs or persons subject to Section 16(b) of the Exchange Act.
2020 Proxy Statement —42 SLM CORPORATION 45— 2022 Proxy Statement
NOMINATIONS, GOVERNANCEANDCOMPENSATION COMMITTEE REPORT
NOMINATIONS, GOVERNANCE AND COMPENSATION COMMITTEE REPORT
The components of our compensation program are in place 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. Accordingly, 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 Form10-K for the year ending December 31, 2019.2021.
Nominations, Governance and Compensation Committee
William N. Shiebler,Mark Lavelle, Chair
Mary Carter Warren Franke
Earl A. Goode
Mark L. Lavelle
Jim Matheson
Kirsten O. Wolberg
2022 Proxy Statement46 — SLM CORPORATION —432020 Proxy Statement
SUMMARY COMPENSATION TABLE
The table below summarizes compensation paid or awarded to or earned by each of the NEOs for the fiscal years ended December 31, 2019,2021, December 31, 2018,2020, and December 31, 2017.2019.
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(8) | Total ($) | ||||||||||||||||||||||||||||||||||||
Raymond J. Quinlan(5) Chairman and Former Chief |
| 2019 |
| 920,769 |
| — |
| 3,665,958 |
| — |
| 1,361,520 |
| — |
| 114,000 |
| 6,062,247 | |||||||||||||||||||||||||||
| 2018 |
| 817,308 |
| — |
| 3,909,131 |
| — |
| 1,347,452 |
| — |
| 113,750 |
| 6,187,641 | ||||||||||||||||||||||||||||
| 2017 |
| 834,615 |
| — |
| 3,740,675 |
| — |
| 1,097,106 |
| — |
| 82,131 |
| 5,754,527 | ||||||||||||||||||||||||||||
Steven J. McGarry Executive Vice President and |
| 2019 |
| 500,000 |
| — |
| 680,817 |
| — |
| 732,000 |
| — |
| 43,450 |
| 1,956,267 | |||||||||||||||||||||||||||
| 2018 |
| 476,155 |
| — |
| 890,168 |
| — |
| 720,563 |
| — |
| 38,750 |
| 2,125,636 | ||||||||||||||||||||||||||||
| 2017 |
| 450,771 |
| — |
| 788,899 |
| — |
| 566,740 |
| — |
| 40,558 |
| 1,846,968 | ||||||||||||||||||||||||||||
Paul F. Thome Executive Vice President and |
| 2019 |
| 444,231 |
| — |
| 576,076 |
| — |
| 554,625 |
| — |
| 39,000 |
| 1,613,932 | |||||||||||||||||||||||||||
| 2018 |
| 384,616 |
| — |
| 721,325 |
| — |
| 514,001 |
| — |
| 38,750 |
| 1,658,692 | ||||||||||||||||||||||||||||
| 2017 |
| 400,000 |
| — |
| 589,487 |
| — |
| 418,504 |
| — |
| 37,304 |
| 1,445,295 | ||||||||||||||||||||||||||||
Donna F. Vieira(6) Executive Vice President and |
| 2019 |
| 415,385 |
| 550,000 |
| 449,995 |
| — |
| 554,625 |
| — |
| 152,065 |
| 2,122,070 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||
Nicolas Jafarieh(7) Senior Vice President and |
| 2019 |
| 425,000 |
| — |
| 471,335 |
| — |
| 419,050 |
| — |
| 12,250 |
| 1,327,635 | |||||||||||||||||||||||||||
| 2018 |
| 377,058 |
| — |
| 536,086 |
| — |
| 408,319 |
| — |
| 61,225 |
| 1,382,688 | ||||||||||||||||||||||||||||
|
|
Name and Principal Position | Year | Salary ($) | 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 ($) | |||||||||||||||||||||||||||
Jonathan W. Witter(7) Chief Executive Officer |
| 2021 |
|
| 950,000 |
|
| — |
|
| 2,223,345 |
|
| 2,000,000 |
|
| 1,809,750 |
|
| — |
|
| 63,967 |
|
| 7,047,062 |
| |||||||||
| 2020 |
|
| 657,692 |
|
| — |
|
| 8,824,635 |
|
| — |
|
| 1,623,930 |
|
| — |
|
| — |
|
| 11,106,257 |
| ||||||||||
Steven J. McGarry Executive Vice President and Chief Financial Officer |
| 2021 |
|
| 500,000 |
|
| — |
|
| 500,241 |
|
| 449,997 |
|
| 900,000 |
|
| — |
|
| 29,450 |
|
| 2,379,688 |
| |||||||||
| 2020 |
|
| 519,231 |
|
| — |
|
| 697,510 |
|
| — |
|
| 811,188 |
|
| — |
|
| 43,700 |
|
| 2,071,629 |
| ||||||||||
| 2019 |
|
| 500,000 |
|
| — |
|
| 680,817 |
|
| — |
|
| 732,000 |
|
| — |
|
| 43,450 |
|
| 1,956,267 |
| ||||||||||
Kerri A. Palmer(8) Executive Vice President and Chief Risk Officer |
| 2021 |
|
| 516,154 |
|
| — |
|
| 389,074 |
|
| 349,997 |
|
| 800,000 |
|
| — |
|
| 4,450 |
|
| 2,059,675 |
| |||||||||
Daniel P. Kennedy(9) |
| 2021 |
|
| 472,116 |
|
| — |
|
| 389,074 |
|
| 349,997 |
|
| 700,000 |
|
| — |
|
| 27,177 |
|
| 1,938,364 |
| |||||||||
| 2020 |
|
| 417,308 |
|
| — |
|
| 399,993 |
|
| — |
|
| 621,212 |
|
| — |
|
| 39,250 |
|
| 1,477,763 |
| ||||||||||
Donna F. Vieira(10) Executive Vice President and Chief Commercial Officer |
| 2021 |
|
| 472,116 |
|
| — |
|
| 389,074 |
|
| 349,997 |
|
| 655,000 |
|
| — |
|
| 25,000 |
|
| 1,891,187 |
| |||||||||
| 2020 |
|
| 467,308 |
|
| — |
|
| 590,206 |
|
| — |
|
| 621,212 |
|
| — |
|
| 39,250 |
|
| 1,717,976 |
| ||||||||||
| 2019 |
|
| 415,385 |
|
| 550,000 |
|
| 449,995 |
|
| — |
|
| 554,625 |
|
| — |
|
| 152,065 |
|
| 2,122,070 |
|
(1) |
|
(2) | Consists of (i) the |
(3) | Represents premium priced stock options that were granted at a 15 percent premium over the closing Sallie Mae stock price on the date of the grant. |
(4) | Represents the cash portions of the |
The Company terminated itstax-qualified pension plan and |
|
|
|
2020 Proxy Statement —44 SLM CORPORATION 47— 2022 Proxy Statement
SUMMARY COMPENSATION TABLE
For |
Name | Employer Contributions to | Severance ($) | Relocation Allowance ($)(b) | Perquisites ($)(c) | Executive Physical ($) | Total ($) | Employer Contributions to | Relocation ($) | Executive ($) | Total ($) | ||||||||||||||||||||||||||||||||||||
Raymond J. Quinlan |
| 39,000 |
| — |
| — |
| 75,000 |
| — |
| 114,000 | ||||||||||||||||||||||||||||||||||
Jonathan W. Witter |
| 25,000 |
|
| 37,533 |
|
| 1,434 |
|
| 63,967 |
| ||||||||||||||||||||||||||||||||||
Steven J. McGarry |
| 39,000 |
| — |
| — |
| — |
| 4,450 |
| 43,450 |
| 25,000 |
|
| — |
|
| 4,450 |
|
| 29,450 |
| ||||||||||||||||||||||
Paul F. Thome |
| 39,000 |
| — |
| — |
| — |
| — |
| 39,000 | ||||||||||||||||||||||||||||||||||
Kerri A. Palmer |
| 0 |
|
| — |
|
| 4,450 |
|
| 4,450 |
| ||||||||||||||||||||||||||||||||||
Daniel P. Kennedy |
| 25,000 |
|
| — |
|
| 2,177 |
|
| 27,177 |
| ||||||||||||||||||||||||||||||||||
Donna F. Vieira |
| 3,615 |
| — |
| 148,450 |
| — |
| — |
| 152,065 |
| 25,000 |
|
| — |
|
| — |
|
| 25,000 |
| ||||||||||||||||||||||
Nicolas Jafarieh |
| 2,800 |
| — |
| — |
| 5,000 |
| 4,450 |
| 12,250 |
(a) | Amounts credited to the Company’stax-qualified and |
|
(8) | Ms. |
(9) | Mr. Kennedy was appointed Chief Operational Officer on August 25, 2020 and President of Sallie Mae Bank on January 1, 2021, and was not an NEO prior to 2020. Accordingly, no information is displayed for 2019. |
(10) | Ms. Vieira commenced her employment with the Company as Executive Vice President and Chief Marketing Officer |
|
2022 Proxy Statement48 — SLM CORPORATION —452020 Proxy Statement
20192021 GRANTSOF PLAN-BASED AWARDS TABLE
20192021 GRANTS OF PLAN-BASED AWARDS TABLE
The following table provides information regarding all plan-based awards attributable to 20192021 performance, including all annual performance bonuses under the 2019 MIP2021 AIP (which were determined and paid in early 2020)2022), and three-year, time-vesting RSU awards and PSUs vesting based on the satisfaction of two performance factors and a TSR modifier, granted January 28, 2019 with respect to the 20192021 LTIP awards.awards granted on February 5, 2021: (i) three-year, annual time-vesting RSU awards; (ii) three-year PSUs that cliff vest based on relative TSR, with a one-year holding period following the vesting date; and (iii) three-year premium priced stock options that cliff vest (denoted by “NQ” as provided in the table below). The awards listed in this table were granted under the 2012Predecessor Plan and are described in more detail under “Compensation Discussion and Analysis.”
Name | Award Type(1) | Grant Date | Date of Board or NGC Committee Action | 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 | Exercise Base | Grant Date Fair Value of Stock and Option Awards ($)(2) | Award Type(1) | Grant Date | Date of Board or Action | 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 | Exercise Base | Grant Date Fair Value of Stock and Option Awards ($)(2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Raymond J. Quinlan | 2019 LTIP RSU | 01/28/19 | 01/16/19 | — | — | — | — | — | — | 161,141 | — | — | 1,749,991 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 LTIP PSU | 01/28/19 | 01/16/19 | — | — | — | — | 161,141 | 241,711 | — | — | — | 1,749,991 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 MIP(³) | 02/26/19 | 02/26/19 | — | 1,395,000 | 2,485,890 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jonathan W. Witter | 2021 LTIP RSU | 2/5/21 | 1/25/21 | 65,189 | 999,999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 LTIP PSU | 2/5/21 | 1/25/21 | 72,992 | 109,488 | 1,223,346 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 LTIP NQ | 2/5/21 | 1/25/21 | 441,501 | 17.65 | 2,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 AIP(3) | 5/27/21 | 5/27/21 | 1,425,000 | 2,850,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven J. McGarry | 2019 LTIP RSU | 01/28/19 | 01/14/19 | — | — | — | — | — | — | 29,926 | — | — | 324,996 | 2021 LTIP RSU | 2/5/21 | 1/25/21 | 14,667 | 224,992 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 LTIP PSU | 01/28/19 | 01/14/19 | — | — | — | — | 29,926 | 44,889 | — | — | 324,996 | 2021 LTIP PSU | 2/5/21 | 1/25/21 | 16,423 | 24,635 | 275,249 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 MIP(³) | 02/26/19 | 02/26/19 | — | 750,000 | 1,336,500 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paul F. Thome | 2019 LTIP RSU | 01/28/19 | 01/14/19 | — | — | — | — | — | — | 25,322 | — | — | 274,997 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 LTIP PSU | 01/28/19 | 01/14/19 | — | — | — | — | 25,322 | 37,983 | — | — | — | 274,997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 MIP(³) | 02/26/19 | 02/26/19 | — | 562,500 | 1,002,375 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven J. McGarry | 2021 LTIP NQ | 2/5/21 | 1/25/21 | 99,337 | 17.65 | 449,997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 AIP(3) | 5/27/21 | 5/27/21 | 750,000 | 1,500,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 LTIP RSU | 2/5/21 | 1/25/21 | 11,408 | 174,999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 LTIP PSU | 2/5/21 | 1/25/21 | 12,773 | 19,160 | 214,075 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kerri A. Palmer | 2021 LTIP NQ | 2/5/21 | 1/25/21 | 77,262 | 17.65 | 349,997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 AIP(3) | 5/27/21 | 5/27/21 | 687,500 | 1,375,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 LTIP RSU | 2/5/21 | 1/25/21 | 11,408 | 174,999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 LTIP PSU | 2/5/21 | 1/25/21 | 12,773 | 19,160 | 214,075 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Daniel P. Kennedy | 2021 LTIP NQ | 2/5/21 | 1/25/21 | 77,262 | 17.65 | 349,997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 AIP(3) | 5/27/21 | 5/27/21 | 593,750 | 1,187,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 Sign-On RSU(4) | 01/28/19 | 11/28/18 | — | — | — | — | — | — | 41,436 | — | — | 449,995 | 2021 LTIP RSU | 2/5/21 | 1/25/21 | 11,408 | 174,999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 MIP(³) | 02/26/19 | 02/26/19 | — | 562,500 | 1,002,375 | — | — | — | — | — | — | — | 2021 LTIP PSU | 2/5/21 | 1/25/21 | 12,773 | 19,160 | 214,075 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nicolas Jafarieh | 2019 LTIP RSU | 01/28/19 | 01/14/19 | — | — | — | — | — | — | 20,718 | — | — | 224,997 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 LTIP PSU | 01/28/19 | 01/14/19 | — | — | — | — | 20,718 | 31,077 | — | — | — | 224,997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 MIP(³) | 02/26/19 | 02/26/19 | — | 425,000 | 757,350 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Donna F. Vieira | 2021 LTIP NQ | 2/5/21 | 1/25/21 | 77,262 | 17.65 | 349,997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 AIP(3) | 5/27/21 | 5/27/21 | 593,750 | 1,187,500 |
(1) | RSU and PSU awards are eligible to accrue dividends as Dividend Equivalent Units (“DEUs”), which vest on the same schedule as the underlying grant. “2021 LTIP NQ” refers to premium priced stock options. |
(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 |
(3) | For Mr. |
|
2020 Proxy Statement —46 SLM CORPORATION 49— 2022 Proxy Statement
OUTSTANDING EQUITY AWARDSAT 20192021 FISCAL YEAR-END TABLE
OUTSTANDING EQUITY AWARDS AT 20192021 FISCALYEAR-END TABLE
The table below sets forth information regarding Company options and stock awards of the NEOs that were outstanding as of December 31, 2019.2021.
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of (#) | Number of (#)(1) | Option Exercise ($) | Option Expiration Date | Number of (#)(2)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Number of (#) | Number of (#)(5) | Option Exercise ($) | Option Expiration Date | Number of (#)(1)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | |||||||||||||||||||||||||||||||||||
Raymond J. Quinlan |
| — |
| — |
| — |
|
| — |
|
| 674,688 |
|
| 6,011,472 |
| ||||||||||||||||||||||||||||||||
Jonathan W. Witter(4) | — | 441,501 | 17.6500 | 2/5/31 | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 1,022,786 | 20,118,207 | |||||||||||||||||||||||||||||||||||||||||||
Steven J. McGarry | 01/27/2011 |
| 30,000 |
| — |
| 5.2430 |
|
| 01/27/2021 |
| — | 99,337 | 17.6500 | 2/5/31 | — | — | |||||||||||||||||||||||||||||||
| — |
| — |
| — |
|
| — |
|
| 124,382 |
|
| 1,108,241 |
| |||||||||||||||||||||||||||||||||
Paul F. Thome | 01/27/2011 |
| 30,000 |
| — |
| 5.2430 |
|
| 01/27/2021 |
| |||||||||||||||||||||||||||||||||||||
| — |
| — |
| — |
|
| — |
|
| 103,433 |
|
| 921,592 |
| |||||||||||||||||||||||||||||||||
— | — | — | — | 121,425 | 2,388,447 | |||||||||||||||||||||||||||||||||||||||||||
Kerri A. Palmer | — | 77,262 | 17.6500 | 2/5/31 | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 24,443 | 480,793 | |||||||||||||||||||||||||||||||||||||||||||
Daniel P. Kennedy | — | 77,262 | 17.6500 | 2/5/31 | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 62,829 | 1,235,852 | |||||||||||||||||||||||||||||||||||||||||||
Donna F. Vieira | — |
| — |
| — |
| — |
|
| — |
|
| 41,959 |
|
| 373,859 |
| — | 77,262 | 17.6500 | 2/5/31 | — | — | |||||||||||||||||||||||||
Nicolas Jafarieh | — |
| — |
| — |
| — |
|
| — |
|
| 69,832 |
|
| 622,205 |
| |||||||||||||||||||||||||||||||
— | — | — | — | 81,480 | 1,602,706 |
(1) |
|
The vesting dates of the NEOs’ unvested RSU awards and any underlying DEUs that were outstanding as of December 31, 2021 are: |
Name | Grant Date | # of RSUs Underlying | # of RSUs Vesting - Vesting Date 2022 | # of RSUs Vesting - Vesting Date | # of RSUs Vesting - Vesting Date 2024 | |||||||||
Jonathan W. Witter(4) | 04/20/2020 | 640,191 | 399,800 - 4/20 | 240,391 - 4/20 | — | |||||||||
02/05/2021 | 65,895 | 21,964 - 2/5 | 21,965 - 2/5 | 21,966 - 2/5 | ||||||||||
Steven J. McGarry | 01/28/2019 | 9,928 | 9,928 - 1/28 | — | — | |||||||||
01/30/2020 | 19,341 | 9,671 - 1/30 | 9,670 - 1/30 | — | ||||||||||
02/05/2021 | 14,207 | 4,735 - 2/5 | 4,736 - 2/5 | 4,736 - 2/5 | ||||||||||
Kerri A. Palmer | 02/05/2021 | 11,532 | 3,843 - 2/5 | 3,844 - 2/5 | 3,845- 2/5 | |||||||||
Daniel P. Kennedy | 01/28/2019 | 13,547 | 13,547 - 1/28 | — | — | |||||||||
01/30/2020 | 24,839 | 12,419 - 1/30 | 12,420 - 1/30 | — | ||||||||||
02/05/2021 | 11,532 | 3,843 - 2/5 | 3,844 - 2/5 | 3,845 - 2/5 | ||||||||||
Donna F. Vieira | 01/28/2019 | 14,345 | 14,345 - 1/28 | — | — | |||||||||
01/30/2020 | 17,078 | 8,538 - 1/30 | 8,540 - 1/30 | — | ||||||||||
02/05/2021 | 11,532 | 3,843 - 2/5 | 3,844 - 2/5 | 3,845 - 2/5 |
2022 Proxy Statement — SLM CORPORATION 47
OUTSTANDING EQUITY AWARDSAT 2021 FISCAL YEAR-END TABLE
(2) | The vesting dates of the NEOs’ unvested PSU awards and any underlying DEUs that were outstanding as of December 31, 2021 contingent upon the achievement of the performance goals at target are: |
Name | Grant Date | # of Performance Underlying | # of PSUs Vesting - Vesting Date 2022 | # of PSUs Vesting - Vesting Date 2023 | # of PSUs Vesting - Vesting Date 2024 | |||||||
Jonathan W. Witter(4) | 04/20/2020 | 242,918 | — | 242,918 - 1/30 | — | |||||||
02/05/2021 | 73,783 | — | — | 73,783 - 2/5 | ||||||||
Steven J. McGarry | 01/28/2019 | 31,077 | 31,077 - 1/28 | — | — | |||||||
01/30/2020 | 30,271 | — | 30,271 - 1/30 | — | ||||||||
02/05/2021 | 16,601 | — | — | 16,601 - 2/5 | ||||||||
Kerri A. Palmer | 02/05/2021 | 12,911 | — | — | 12,911 - 2/5 | |||||||
Daniel P. Kennedy | 02/05/2021 | 12,911 | — | — | 12,911 - 2/5 | |||||||
Donna F. Vieira | 01/30/2020 | 25,614 | — | 25,614 - 1/30 | — | |||||||
02/05/2021 | 12,911 | — | — | 12,911 - 2/5 |
(3) | Market value of shares or units is calculated based on the closing price of the Company’s Common Stock on December 31, 2021 of $19.67. |
(4) | Mr. Witter’s commencement of employment as the Chief Executive Officer occurred on April 20, 2020, resulting in a combination of awards consisting of: (i) RSUs that vest in one-third increments over a three-year period; (ii) RSUs that vest over a three-year period in increments of 40 percent/40 percent/20 percent; and (iii) PSUs that vest in January 2023. |
(5) | The vesting dates of the NEOs’ unvested premium priced stock options with an exercise price set at a 15 percent premium above the closing price of the Company’s Common Stock on the date of grant that were outstanding as of December 31, 2021 are: |
Name | Grant Date |
| # of |
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50 SLM CORPORATION —2020 Proxy Statement
OUTSTANDING EQUITY AWARDSAT 2019 FISCAL YEAR-END TABLE
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| # of Vesting - Vesting Date | # of Vesting - Vesting Date | |||||||||||||||
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Steven J. McGarry |
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Donna F. Vieira | 02/05/2021 | 77,262 | — | — | 77,262 - 2/5 |
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2020 Proxy Statement —48 SLM CORPORATION 51— 2022 Proxy Statement
OPTION EXERCISESAND STOCK VESTEDIN 20192021
OPTION EXERCISES AND STOCK VESTED IN 20192021
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | ||||||||||||||||||||
Raymond J. Quinlan | — | — |
| 475,816 |
|
| 5,284,472 |
| ||||||||||||||||||||
Jonathan W. Witter |
| — |
| — | 396,217 | 7,444,745 | ||||||||||||||||||||||
Steven J. McGarry | — | — |
| 75,526 |
|
| 838,337 |
|
| — |
| — | 55,314 | 740,903 | ||||||||||||||
Paul F. Thome | — | — |
| 43,221 |
|
| 478,929 |
| ||||||||||||||||||||
Kerri A. Palmer | — | — | — | — | ||||||||||||||||||||||||
Daniel P. Kennedy | — | — | 37,918 | 516,942 | ||||||||||||||||||||||||
Donna F. Vieira | — | — |
| — |
|
| — |
| — | — | 22,634 | 314,869 | ||||||||||||||||
Nicolas Jafarieh | — | — |
| 24,284 |
|
| 269,248 |
|
(1) |
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The value realized on vesting is the number of shares vested, including any accrued DEUs where applicable, multiplied by the closing market price of the Company’s Common Stock on the vesting date. |
2022 Proxy Statement52 — SLM CORPORATION —492020 Proxy Statement
EQUITY COMPENSATION PLAN INFORMATION
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information as of December 31, 2019,2021 relating to equity compensation plans or arrangements pursuant to which options, restricted stock, RSUs, PSUs, 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) | Number of securities to be issued upon exercise of outstanding options and rights | 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(1) | |||||||||||||||||||||||||||||||||||||
Equity compensation plans approved by security holders: | NQ, ISO, PSU, SAR, RES, RSU, ST | NQ, ISO, PSU, SAR, RES, RSU, ST | |||||||||||||||||||||||||||||||||||||||||||||
SLM Corporation 2012 Omnibus Incentive Plan | |||||||||||||||||||||||||||||||||||||||||||||||
SLM Corporation 2021 Omnibus Incentive Plan | |||||||||||||||||||||||||||||||||||||||||||||||
Traditional options |
| — |
| — |
| — |
| — |
| $ | — |
|
| — |
| ||||||||||||||||||||||||||||||||
Net-settled options |
| — |
| — |
| — |
| — |
|
| — |
|
| — |
| ||||||||||||||||||||||||||||||||
RSUs/RES/PSUs |
| 5,298,006 |
| — |
| — |
| 51,903 |
|
| — |
|
| — |
| ||||||||||||||||||||||||||||||||
Total |
| 5,298,006 |
| — |
| — |
| 17,169,838 |
| 51,903 |
|
| — |
|
| — |
|
| 20,642,011 |
| NQ, ISO, PSU, SAR, RES, RSU, ST | ||||||||||||||||||||||||||
Employee Stock Purchase Plan |
| — |
| — |
| — |
| 14,645,894 | NQ, RES |
| — |
|
| — |
|
| — |
|
| 14,149,397 |
| Common Stock purchase right | |||||||||||||||||||||||||
Expired Plans | NQ, ISO, RES, RSU, SU | NQ, ISO, PSU, SAR, RES, RSU, ST | |||||||||||||||||||||||||||||||||||||||||||||
Traditional options |
| — |
| — |
| — |
| 998,891 |
| $ | 17.65 |
|
| 2.0 |
| ||||||||||||||||||||||||||||||||
Net-settled options |
| 370,147 |
| 4.73 |
| 0.7 |
| — |
|
| — |
|
| — |
| ||||||||||||||||||||||||||||||||
RSUs/PSUs |
| — |
| — |
| — | |||||||||||||||||||||||||||||||||||||||||
RSUs/RES/PSUs |
| 5,305,773 |
|
| — |
|
| — |
| ||||||||||||||||||||||||||||||||||||||
Total |
| 370,147 |
| 4.73 |
| 0.7 |
| — |
| 6,304,664 |
|
| 17.65 |
|
| 2.0 |
|
| — |
| |||||||||||||||||||||||||||
Total approved by security holders |
| 5,668,153 |
| 4.73 |
| 0.7 |
| 31,815,732 |
| 6,356,567 |
|
| 17.65 |
|
| 2.0 |
|
| 34,791,408 |
| |||||||||||||||||||||||||||
Equity compensation plans not approved by security holders: | |||||||||||||||||||||||||||||||||||||||||||||||
Compensation arrangements |
| — |
| — |
| — |
| — |
| — |
|
| — |
|
| — |
|
| — |
| |||||||||||||||||||||||||||
Total not approved by security holders |
| — |
| — |
| — |
| — |
| — |
|
| — |
|
| — |
|
| — |
| |||||||||||||||||||||||||||
Total |
| 5,668,153 |
| 4,75 |
| 0.7 |
| 31,815,732 |
| 6,356,567 |
| $ | 17.65 |
|
| 2.0 |
|
| 34,791,408 |
|
(1) |
|
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), |
Number of shares available for issuance under the Employee Stock Purchase Plan |
2020 Proxy Statement —50 SLM CORPORATION 53— 2022 Proxy Statement
NON-QUALIFIEDONQUALIFIED DEFERRED COMPENSATIONFOR FISCAL YEAR 20192021
NON-QUALIFIEDNONQUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR 20192021
Deferred Compensation Plan for Key Employees
The table below provides information about thenon-qualified nonqualified deferred compensation of the NEOs in 2019.2021. Under the Sallie Mae Deferred Compensation Plan for Key Employees (“DC Plan”), eligible employees may elect to defer up to 100 percent of their annual cash performance bonus and up to 85 percent of their base salary. Amounts deferred by plan participants are credited to record-keeping accounts, and participants are general creditors of the Company with regard to their accounts.
We make contributions to the DC Plan only if, and to the extent that, a participant’s deferral under this plan reduces the contribution that would have been made under ourtax-qualified defined contribution plan. No such contributions under the DC Plan were made for any NEO for 2019.2021. Participants’ accounts are credited with earnings based on the investment performance of underlying investment funds, as selected by participants. Our stock ispreviously served as one of the available investment options under the DC Plan.Plan, but has since been removed as an option. Earnings credited do not constitute “above-market” earnings as defined by the SEC. Earnings are credited daily.
Participants elect the time and form of payment of their accounts. Accounts may be distributed either in a lump sum, annual installments, or a formula acceptable to us. Accounts may also be paid while a participant is “in service” on apre-specified date, provided that the distribution date is at least two years after the date of the last deferral.
Supplemental 401(k) Savings Plan
Under the Sallie Mae Supplemental 401(k) Savings Plan (“Supplemental 401(k)”), eligible employees may elect to defer five percent of their base salary and annual bonus or up to $780,000$790,000 of total eligible pay.
We may also make matching contributions to a participant’s account. We will match a participant’s contribution after the participant completes 12 months of service. Participants are fully vested in our matching contributions at all times. Participants may elect to have their plan accounts deemed invested in the core investment funds offered under ourtax-qualified 401(k) plan, and earnings are credited to participants’ Supplemental 401(k) accounts when such amounts would have been credited under ourtax-qualified 401(k) plan. Earnings credited to the participants’ accounts do not constitute “above-market” earnings as defined by the SEC.
Participants elect the time and form of payment offrom their accounts. Accounts are paid in cash in a lump sum or by annual installments over 10 years. A participant may request an early distribution if the participant experiences a substantial, unforeseen financial hardship (as defined in the plan).
Name | Plan Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY(1) ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | Plan Name | Executive Contributions in Last FY ($) | Company Contributions in Last FY(1) ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | |||||||||||||||||||||||||||||||||||||
Raymond J. Quinlan | Supplemental 401(k) |
| 25,000 |
| 25,000 |
| 65,161 |
| — |
| 284,783 | ||||||||||||||||||||||||||||||||||||||
Jonathan W. Witter | Supplemental 401(k) |
| 25,000 |
|
| 25,000 |
|
| 12,098 |
|
| — |
|
| 62,098 |
| |||||||||||||||||||||||||||||||||
Steven J. McGarry | Supplemental 401(k) |
| 25,000 |
| 25,000 |
| 88,816 |
| — |
| 435,564 | Supplemental 401(k) |
| 25,000 |
|
| 25,000 |
|
| 133,330 |
|
| — |
|
| 754,225 |
| ||||||||||||||||||||||
DC Plan |
| — |
| — |
| 4,761 |
| — |
| 21,121 | DC Plan |
| 7,887 |
|
| — |
|
| 34,125 |
| |||||||||||||||||||||||||||||
Paul F. Thome | Supplemental 401(k) |
| 25,000 |
| 25,000 |
| 50,964 |
| — |
| 425,996 | ||||||||||||||||||||||||||||||||||||||
Kerri A. Palmer | — |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||||||||||||||||||||||||||||
Daniel P. Kennedy | Supplemental 401(k) |
| 25,000 |
|
| 25,000 |
|
| 66,635 |
|
| — |
|
| 488,514 |
| |||||||||||||||||||||||||||||||||
Donna F. Vieira | — |
| — |
| — |
| — |
| — |
| — | Supplemental 401(k) |
| 25,000 |
|
| 25,000 |
|
| 10,575 |
|
| — |
|
| 119,955 |
| ||||||||||||||||||||||
Nicolas Jafarieh | — |
| — |
| — |
| — |
| — |
| — |
(1) |
|
2022 Proxy Statement54 — SLM CORPORATION —512020 Proxy Statement
ARRANGEMENTSWITH NAMED EXECUTIVE OFFICERS
ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS
Under our long-standing Executive Severance Plan for Senior Officers (the “Severance Plan”), eligible officers who do not have an individually negotiated severance arrangement will receive a lump sum cash payment equal to: (1) a multiple of base salary and an average of the last 24 months of bonus compensation; plus(2) pro-ratedprorated target bonus for the year of termination, upon the following events: (a) resignation from employment for good reason (as defined in the plan); (b) our decision to terminate an eligible officer’s employment for any reason other than for cause (as defined in the plan); (c) death or disability; or (d) upon mutual agreement of the Company and the eligible officer. The multiplier for each eligible officer position is as follows: CEO (x 2.0); Higher than Executive Vice President (x 1.5); Executive or Senior Vice President (x 1.0). Under the Severance Plan, in no event will a severance payment exceed a multiple of three times an officer’s base salary and incentive bonus.
In addition to the cash severance payment, eligible officers will receive subsidized medical benefits and outplacement services for 18 months (24 months for the CEO). Treatment of equity upon severance is governed by the terms of the applicable equity agreement and not the Severance Plan. All payments and benefits provided under the Severance Plan are conditioned on the participant’s continuing compliance with the terms of the Severance Plan and the participant’s execution of a release of claims, covenant not to sue, andnon-competition noncompetition andnon-solicitation nonsolicitation agreements.
Change in Control Severance Plan
Under our long-standing Change in Control Severance Plan for Senior Officers (the “Change in Control Severance Plan”), if a termination of employment for reasons defined in the plan occurs within 24 months following a change in control of the Company, the participant is entitled to receive a lump sum cash payment equal to two times the sum of his or her base salary and average annual performance bonus (based on the prior two years). A participant will also be entitled to receive apro-rated prorated portion of his or her target annual performance bonus for the year in which the termination occurs, as well as continuation of medical insurance benefits for atwo-year period. Under the Change in Control Severance Plan, equity awards made before January 1, 2009 vest upon a change in control pursuant to their terms, regardless of whether the participant’s employment terminates, and equity awards granted after January 1, 2009 become vested andnon-forfeitable in connection with a change in control only if the participant’s employment is terminated or if the acquiring or surviving entity does not assume the awards. The Change in Control Severance Plan does not allow forgross-ups. All payments and benefits provided under the Change in Control Severance Plan are conditioned on the participant’s continuing compliance with the Change in Control Severance Plan and the participant’s execution of a release of claims, covenant not to sue, andnon-competition noncompetition andnon-solicitation nonsolicitation agreements.
SeparationOffer Letter with Ms. Palmer
On January 7, 2021, the Company and Release Agreement with Mr. Quinlan
AfterMs. Palmer entered into a thorough reviewletter agreement (the “Palmer Offer Letter”) pursuant to her commencement of employment as the Company’s Chief Risk and Compliance Officer on January 19, 2021. Pursuant to the Palmer Offer Letter, Ms. Palmer’s annual base salary was established at $550,000 and she was eligible to receive a target annual bonus set at 125 percent of her base salary and participate in the Company’s compensation and benefit plans. In addition, Ms. Palmer received a $700,000 equity grant in February 2021, subject to the terms and vesting conditions of the Company’s organizational structure and needs, as well as a comprehensive search2021 LTIP. Also, starting in 2022, Ms. Palmer was eligible to receive an equity grant based on the full year target level reward for Mr. Quinlan’s successor, inher position, which Mr. Quinlan participated, the Company appointedwas $550,000.
Offer Letter with Mr. Witter as its CEO. Accordingly, the Company and Mr. Quinlan mutually agreed upon Mr. Quinlan’s separation from the Company, and, on April 9,
On March 4, 2020, the Company and Mr. QuinlanWitter entered into ana letter agreement in connection with his separation from(the “Witter Offer Letter”) regarding Mr. Witter’s commencement as the Company pursuantCompany’s Chief Executive Officer. Pursuant to the Witter Offer Letter, Mr. Witter had an annual base salary of $950,000 and participated in the Company’s compensation and benefit plans. Pursuant to the Company’s 2020 LTIP, Mr. Witter received an equity grant on his start date based on the full-year target level award for his position, which for 2020 was $3,250,000, with the same terms and conditions as such grants made to the Company’s other executive officers in 2020. In addition, Mr. Witter received a sign-on equity grant equal to the value of his existing equity awards from his prior employer that were outstanding, unvested, and subject to forfeiture (excluding any awards he received from his prior employer in 2020), with such value based on the average closing price of his prior employer’s common stock for the 20-day
52 SLM CORPORATION — 2022 Proxy Statement
ARRANGEMENTSWITH NAMED EXECUTIVE OFFICERS
trailing period ending on March 4, 2020, and the number of the Severance Plan described above, as appliedCompany’s shares underlying the RSUs based on the average closing price of the Company’s Common Stock for the 20-day trailing period ending on April 20, 2020. To the extent any such outstanding equity awards from his prior employer were not forfeited, Mr. Witter would forfeit the number of the Company’s RSUs that hold an equivalent value to an executive officer whose separation from the Company was mutually agreed upon. Under the separation and release agreement, which contains a customary release of claims againstequity awards that were permitted to vest.
On September 13, 2018, the Company and restrictive covenantsMs. Vieira entered into a letter agreement (the “Vieira Offer Letter”) pursuant to her commencement of employment as the Company’s Chief Marketing Officer on January 14, 2019. Pursuant to the Vieira Offer Letter, Ms. Vieira’s annual base salary was established at $450,000, and she was eligible to receive a target annual bonus set at 125 percent of her base salary and participate in favorthe Company’s compensation and benefit plans. In addition, pursuant to her commencement of employment with the Company, includingMs. Vieira received a24-monthone-time noncompetitioncash sign-on bonus of $550,000 and nonsolicitation covenant, Mr. Quinlan agreed to: (i) resign as CEO effective asan equity grant of April 19, 2020; (ii) no longer serve as a director or Chairman$450,000 in the form of RSUs that fully vested on January 28, 2022. Also, starting in 2020, Ms. Vieira became eligible to receive an equity grant based on the Board of Directors immediately following the Annual Meeting; and (iii) serve as a consultantfull-year target level reward for the Company through December 31, 2020. In consideration and following the Annual Meeting, Mr. Quinlan will be entitled to payments pursuant to the Severance Plan. In addition, in appreciation of Mr. Quinlan’s efforts in connection with the Company’s transition to a new CEO, the Company granted Mr. Quinlan a transition bonus. Mr. Quinlan will also be remunerated for his services as a consultant in order to leverage Mr. Quinlan’s deep expertise in and experience with the Company’s business and its stakeholders.her position, which was $450,000 at that time.
20202022 Proxy Statement —SLM CORPORATION 5553
POTENTIAL PAYMENTS UPON TERMINATIONOR CHANGEIN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The table below reflects the amount of compensation that would have been payable to Mr. Quinlan,Witter, Mr. McGarry, Ms. Palmer, Mr. Thome,Kennedy, and Ms. Vieira and Mr. Jafarieh on December 31, 2019,2021, if such individual’s employment had terminated on that date, given the individual’s compensation and service levels as of December 31, 2019.2021. The values reported in the table below with respect to equity vesting are based on the Company’s closing stock price on December 31, 20192021 of $8.91$19.67 per share.
The following severance arrangements were effective for Mr. Quinlan,Witter, Mr. McGarry, Ms. Palmer, Mr. Thome,Kennedy, and Ms. Vieira and Mr. Jafarieh on December 31, 2019:2021: (i) the Severance Plan; (ii) the Change in Control Severance Plan; and (iii) equity acceleration and settlement provisions contained in awards issued pursuant to the 20122021 Plan and predecessor equity plans. The table below does not reflect the separation and release agreement with Mr. Quinlan, which was not in effect in 2019. Information relating to the separation and release agreement is contained in the Section titled “Arrangements with Named Executive Officers.”
5654 SLM CORPORATION —20202022 Proxy Statement
POTENTIAL PAYMENTS UPON TERMINATIONOR CHANGEIN CONTROL TABLE
POTENTIAL PAYMENTS UPON TERMINATION
OR CHANGE IN CONTROL TABLE
Change in ($) | Change in Control with Termination without Cause or for Good Reason(2) ($) |
Termination | Termination by the Company with Cause(4) ($) | Termination by the Executive upon Retirement(5) ($) | Termination by Death or Disability(6) ($) | Change in ($) | Change in Control with Termination without Cause or for Good Reason(2) ($) |
Termination | Termination by the Company with Cause(4) ($) | Termination by the Executive upon Retirement(5) ($) | Termination by Death or Disability(6) ($) | |||||||||||||||||||||||||||||||||||||||||||
Raymond J. Quinlan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jonathan W. Witter | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Vesting | — | 6,640,787 | 6,640,787 | — | 6,640,787 | 6,640,787 | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity | — | 21,010,039 | 21,010,039 | — | — | 21,010,039 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance | — | 5,978,040 | 5,018,123 | — | — | 5,018,123 | — | 7,419,500 | 5,333,680 | — | — | 5,333,680 | ||||||||||||||||||||||||||||||||||||||||||
Medical Insurance/Outplacement | — | 23,438 | 38,438 | — | — | 38,438 | — | 32,528 | 47,528 | — | — | 47,528 | ||||||||||||||||||||||||||||||||||||||||||
Total
| — | 12,642,265 | 11,697,348 | — | 6,640,787 | 11,697,348 | — | 28,462,067 | 26,391,247 | — | — | 26,391,247 | ||||||||||||||||||||||||||||||||||||||||||
Steven J. McGarry | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Vesting | — | 1,548,883 | 1,548,883 | — | 1,548,883 | 1,548,883 | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity | — | 2,733,431 | 2,733,431 | — | 2,733,431 | 2,733,431 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance | — | 3,214,000 | 1,346,375 | — | — | 1,346,375 | — | 3,800,000 | 1,355,594 | — | — | 1,355,594 | ||||||||||||||||||||||||||||||||||||||||||
Medical Insurance/Outplacement | — | 32,551 | 39,414 | — | — | 39,414 | — | 31,940 | 38,955 | — | — | 38,955 | ||||||||||||||||||||||||||||||||||||||||||
Total
| — | 4,795,434 | 2,934,672 | — | 1,548,883 | 2,934,672 | — | 6,565,371 | 4,127,980 | — | 2,733,431 | 4,127,980 | ||||||||||||||||||||||||||||||||||||||||||
Paul F. Thome | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kerri A. Palmer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Vesting | — | 1,274,264 | 1,274,264 | — | 1,274,264 | 1,274,264 | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity | — | 636,862 | 636,862 | — | — | 636,862 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance | — | 3,525,001 | 1,293,750 | — | — | 1,293,750 | ||||||||||||||||||||||||||||||||||||||||||||||||
Medical Insurance/Outplacement | �� | — | 23,858 | 32,893 | — | — | 32,893 | |||||||||||||||||||||||||||||||||||||||||||||||
Total
| — | 4,185,721 | 1,963,505 | — | — | 1,963,505 | ||||||||||||||||||||||||||||||||||||||||||||||||
Daniel P. Kennedy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | — | 1,391,921 | 1,391,921 | — | — | 1,391,921 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance | — | 2,571,750 | 1,069,980 | — | — | 1,069,980 | — | 3,062,501 | 1,135,606 | — | — | 1,135,606 | ||||||||||||||||||||||||||||||||||||||||||
Medical Insurance/Outplacement | — | 23,438 | 32,578 | — | — | 32,578 | — | 31,940 | 38,955 | — | — | 38,955 | ||||||||||||||||||||||||||||||||||||||||||
Total
| — | 3,869,452 | 2,376,8222 | — | 1,274,264 | 2,376,822 | — | 4,486,362 | 2,566,482 | — | — | 2,566,482 | ||||||||||||||||||||||||||||||||||||||||||
Donna F. Vieira | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Vesting | — | 373,859 | 373,859 | — | — | 373,859 | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity | — | 1,758,775 | 1,758,775 | — | — | 1,758,775 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance | — | 2,571,750 | 1,008,563 | — | — | 1,008,563 | — | 2,972,501 | 1,113,106 | — | — | 1,113,106 | ||||||||||||||||||||||||||||||||||||||||||
Medical Insurance/Outplacement | — | 33,221 | 39,916 | — | — | 39,916 | — | 32,528 | 39,396 | — | — | 39,396 | ||||||||||||||||||||||||||||||||||||||||||
Total
| — | 2,978,830 | 1,422,338 | — | — | 1,422,338 | — | 4,763,804 | 2,911,277 | — | — | 2,911,277 | ||||||||||||||||||||||||||||||||||||||||||
Nicolas Jafarieh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Vesting | — | 731,486 | 731,486 | — | — | 731,486 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance | — | 2,113,100 | 906,738 | — | — | 906,738 | ||||||||||||||||||||||||||||||||||||||||||||||||
Medical Insurance/Outplacement | — | 35,977 | 41,983 | — | — | 41,983 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total
| — | 2,880,563 | 1,680,207 | — | — | 1,680,207 |
(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 |
(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. |
(4) | For Equity Vesting—Vested and unvested equity awards forfeit upon a termination for cause (as defined in the |
(5) | For Equity Vesting—Employees are considered retirement eligible at age 55 or more, with 70 or more years of combined age and years of service with the Company or its subsidiaries. Upon eligible retirement, these awards generally continue to vest based on their original terms. On December 31, |
(6) | For Equity Vesting—Unvested equity awards accelerate upon termination by death or disability (as defined in the |
20202022 Proxy Statement —SLM CORPORATION 5755
20192021 PAY RATIO DISCLOSURE
In accordance with the requirements of Section 953(b) of Dodd-Frank and Item 402(u) of RegulationS-K (which we collectively refer to as the “Pay Ratio Rule”), we are providing the following estimated information for 2019:2021:
the median of the annual total compensation of all our employees (except our former CEO) was $72,550;$88,566;
the annual total compensation of our former CEO was $6,062,247;$7,047,062; and
the ratio of these two amounts was 8480 to 1. We believe that this ratio is a reasonable estimate calculated in a manner consistent with the requirements of the Pay Ratio Rule.
Our former CEO, Mr. Quinlan, served as our CEO through April 19, 2020.
SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and assumptions and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies.
Methodology for Identifying Ourour “Median Employee”
Pursuant to the SEC Rules, a company must identify its “median employee” once every three years, unless there has been a change in its employee population or employee compensation arrangements such that the company reasonably believes the change would result in a significant change in the CEO pay ratio. After a detailed review, we determined that it is appropriate to use the same median employee identified last year at December 31, 2020 because there have not been changes to our employee population or employee compensation arrangements that we reasonably believe would result in a significant change in the CEO pay ratio. For your reference, we have provided the methodology below that was used last year to identify our “median employee.”
Employee Population
To identify the median of the annual total compensation of all of our employees (other than our former CEO), we first identified our total employee population from which we determined our “median employee.” We determined that, as of December 31, 2019,2020, our employee population consisted of approximately 1,9001,600 individuals (as reported in Item 1,Business, in our 20192020 Form10-K). Our employee population consisted of our workforce of full-time, part-time, seasonal, and temporary employees.
We selected December 31, 2019,2020, which is within the last three months of 2019,2020, as the date upon which we would identify the “median employee” because we wanted to measure the median employee’s compensation on the same date our former CEO’s pay is calculated.
Determining our Median Employee
To identify our “median employee” from our total employee population, we compared the amount of base pay and bonus (base pay included all wages paid during the year, plus any equivalent paid time off, including but not limited to leave pay, military pay, volunteer pay and holiday pay, and the bonus calculation included any performance-based incentive payment). We identified our “median employee” using this compensation measure, which was consistently applied to all our employees included in the calculation. We did not make anycost-of-living adjustments in identifying our “median employee.”
Our Median Employee
Using the methodologies described above, we determined that our “median employee” was a full-time, salaried employee located in the United States who provides support in our operations business.
Determination of Annual Total Compensation of our “Median Employee” and our Former CEO
Once we identified our “median employee,” we then calculated such employee’s annual total compensation for 20192021 using the same methodology we used for purposes of determining the annual total compensation of our NEOs for 20192021 (as set forth in the 20192021 Summary Compensation Table on page 4744 of this proxy statement), adjusted to include the cost to the Company in 20192021 of specified employee benefits that are provided on anon-discriminatory nondiscriminatory basis, including employee assistance benefits (including tuition reimbursements and participation in a medical and wellness assistance program).
Our former CEO’s annual total compensation for 20192021 for purposes of the CEO Pay Ratio Rule is equal to the amount reported in the “Total” column in the 20192021 Summary Compensation Table, adjusted, to the extent applicable, in a similar manner as the annual total compensation of our “median employee.”
5856 SLM CORPORATION —20202022 Proxy Statement
DIRECTOR COMPENSATION
Our directors’ compensation program is designed to reasonably compensate ournon-employee directors for work required for a company of our size and to align the directors’ interests with that of our stockholders. The NGCCompensation Committee reviews the compensation level of ournon-employee directors on an annual basis and makes recommendations to the Board of Directors.
20192021 DIRECTOR COMPENSATION TABLE
The following table provides summary information for the year ended December 31, 2019,2021, relating to compensation paid to or accrued by us on behalf of ournon-employee directors who served in this capacity during 2019.2021.
Name |
Fees | Stock Awards ($)(2) | Option ($)(3) | All Other ($)(4) | Total($) |
Fees | Stock Awards ($)(2) (3) | Option ($)(4) | All Other ($)(5) | Total($) | |||||||||||||||||||||||||||||||||||
Paul G. Child | 122,500 | 99,999 | — | 14 | 222,513 | 107,500 | 99,983 | 21 | 207,504 | ||||||||||||||||||||||||||||||||||||
Mary Carter Warren Franke | 95,000 | 99,999 | — | 21 | 195,020 | 192,500 | 99,983 | 21 | 292,504 | ||||||||||||||||||||||||||||||||||||
Earl A. Goode | 100,000 | 99,999 | — | 11 | 200,010 | 75,000 | 0 | 50,011 | (6) | 125,011 | |||||||||||||||||||||||||||||||||||
Marianne M. Keler | 102,500 | 99,999 | — | 21 | 202,520 | 97,500 | 99,983 | 21 | 197,504 | ||||||||||||||||||||||||||||||||||||
Mark L. Lavelle | 65,000 | 99,999 | — | 16 | 165,015 | 60,000 | 134,955 | 21 | 194,976 | ||||||||||||||||||||||||||||||||||||
Ted Manvitz | 30,000 | 134,955 | 16 | 164,971 | |||||||||||||||||||||||||||||||||||||||||
Jim Matheson | 90,000 | 99,999 | — | 21 | 190,020 | 57,500 | 134,955 | 21 | 192,476 | ||||||||||||||||||||||||||||||||||||
Jed H. Pitcher(6) | 52,500 | — | — | 6 | 52,506 | ||||||||||||||||||||||||||||||||||||||||
Frank C. Puleo | 60,000 | 134,955 | 21 | 194,976 | |||||||||||||||||||||||||||||||||||||||||
Frank C. Puleo | 105,000 | 99,999 | — | 14 | 205,013 | ||||||||||||||||||||||||||||||||||||||||
Samuel T. Ramsey | 11,667 | 0 | 2 | 11,669 | |||||||||||||||||||||||||||||||||||||||||
Vivian C. Schneck-Last | 95,000 | 99,999 | — | 21 | 195,020 | 95,000 | 99,983 | 21 | 195,004 | ||||||||||||||||||||||||||||||||||||
William N. Shiebler | 105,000 | 99,999 | — | 11 | 205,010 | 58,333 | 117,470 | 19 | 175,822 | ||||||||||||||||||||||||||||||||||||
Robert S. Strong | 95,000 | 99,999 | — | 14 | 195,013 | 65,000 | 134,955 | 21 | 199,976 | ||||||||||||||||||||||||||||||||||||
Kirsten O. Wolberg | 90,000 | 99,999 | — | 21 | 190,020 | 90,000 | 99,983 | 21 | 190,004 |
(1) | Director fees are paid quarterly in arrears. |
(2) | Thenon-employee directors elected to our Board of Directors at the |
(3) | Stock Awards outstanding as of December 31, 2021 for each director consisted of Restricted Stock Awards (including DEUs), as follows: Paul G. Child – 4,955; Mary Carter Warren Franke – 4,955; Earl A. Goode – 0; Marianne M. Keler – 4,955; Mark L. Lavelle – 4,955; Ted Manvitz – 4,955; Jim Matheson – 4,955; Frank C. Puleo – 4,955; Samuel T. Ramsey – 0; Vivian C. Schneck-Last – 4,955; William N. Shiebler – 0; Robert S. Strong – 4,955; Kirsten O. Wolberg – 4,955. |
(4) | We did not grant any stock options to thenon-employee directors during |
Includes annual premiums paid by us to provide a life insurance benefit of $50,000. |
|
(6) | In connection with Mr. |
20202022 Proxy Statement —SLM CORPORATION 5957
2019 DIRECTOR COMPENSATION TABLE
Director Compensation Elements
The following table highlights the material elements of our 20192021 director compensation program:
Membership/Retainer | Annual Cash Retainer | |||
Board of Directors | $70,000 | |||
| $ | |||
Committee Chair Retainer | ||||
• Audit Committee | $ | |||
• Nominations | $20,000 | |||
• | $20,000 | |||
• | $20,000 | |||
• | $ | |||
Committee Membership Retainer | ||||
• Audit Committee | $ | |||
• Nominations | $10,000 | |||
• | $10,000 | |||
• | $10,000 | |||
• | $ |
* | Certain directors elected to receive shares of Common Stock in lieu of cash pertaining to the Board of Director’s quarterly cash retainer. |
In addition to the Committeescommittees above, some of ournon-employee directors are also members of our Preferred Stock Committee. No fees were paid in 20192021 in connection with this Committee.committee.
In addition to the cash retainers set forth above, ournon-employee directors each received $100,000 in restricted stock awards, which resulted in a grant date fair value of $99,999.$99,983. These restricted stock awards will vest and become transferable upon the Company’s 20202022 Annual Meeting. These awards will be forfeited if the grantee ceases to be a member of the Board of Directors prior to the vesting event for any reason other than death, disability, or change of control.
We reimburse directors for anyout-of-pocket expenses incurred in connection with service as a director.
Directors’ compensation is determined by the Board of Directors, and the NGCCompensation Committee makes recommendations to the Board of Directors based on periodic benchmarking assessments and advice received from the NGCCompensation Committee’s independent compensation consultant. In making recommendations to the Board of Directors, the NGCCompensation Committee considers the competitive positioning of the aggregate and individual components of compensation, as well as the mix of pay and structure versus both direct competitors and other comparable companies. The NGCCompensation Committee also considers the unique skill set required to serve on our Board of Directors and the time commitment associated with preparation for and attendance at meetings of the Board of Directors and its committees as well as external commitments, such as engagement with our stockholders and regulators.
We maintain stock ownership guidelines for ournon-employee directors. Under our stock ownership guidelines, each director is expected, within five years of initial election to the Board of Directors, to own Common Stock with a value equivalent to four times his or her annual cash retainer for serving on our Board of Directors. As of December 31, 2019,2021, all then currentthen-current directors were in compliance with our stock ownership guidelines or are expected to achieve compliance within the applicable five-year period.
We providenon-employee directors with company-paidCompany-paid business travel accident insurance.insurance, as well as annual premiums paid by us to provide a life insurance benefit.
58 SLM CORPORATION — 2022 Proxy Statement
DIRECTOR COMPENSATION
Under our Deferred Compensation Plan for Directors (“Director Deferral Plan”),non-employee directors may elect annually to defer receipt of all or a percentage of their annual retainer. Deferrals are credited with earnings based on the performance of certain investment funds selected by the participant. Deferrals are fully vested at all times and are payable in cash (in lump sum or in installments at the election of the director) or Company stock upon termination of the director’s service on the Board of Directors (except for hardship withdrawals in limited circumstances). During 2019,2021, none of thenon-employee directors actively participated in the Director Deferral Plan.
2022 Proxy Statement60 — SLM CORPORATION —592020 Proxy Statement
OTHER MATTERS
Other Matters for the 20202022 Annual Meeting
As of the date of this proxy statement, there are no matters the Board of Directors intends to present for a vote at the Annual Meeting other than the business items discussed in this proxy statement. In addition, Sallie Mae has not been notified of any other business proposed to be presented at the Annual Meeting. If other matters now unknown to the Board of Directors come before the Annual Meeting, the proxy given by a stockholder electronically, telephonically, or on a proxy card gives discretionary authority to the persons named by Sallie Mae to serve as proxies to vote such stockholder’s shares on any such matters in accordance with their best judgment.
Stockholder Proposals for the 20212023 Annual Meeting
A stockholder who intends to introduce a proposal for consideration at Sallie Mae’s 20212023 annual meeting may seek to have that proposal and a statement in support of the proposal included in the Company’s 20212023 proxy statement if the proposal relates to a subject that is permitted under Rule14a-8 of the Exchange Act (“Rule14a-8”). To be considered for inclusion, the proposal and supporting statement must be received by the Company no later than January 5, 2021,2023, and must satisfy the other requirements of Rule14a-8. The submission of a stockholder proposal does not guarantee it will be included in Sallie Mae’s 20212023 proxy statement.
Sallie Mae’sBy-Laws provide that a stockholder may otherwise propose business for consideration or nominate persons for election to the Board of Directors, in compliance with federal proxy rules, applicable state law and other legal requirements and without seeking to have the proposal included in our proxy statement pursuant to Rule14a-8. Sallie Mae’sBy-Laws provide that any such proposals or nominations for our 20212023 annual meeting must be received by it not earlier than the close of business on February 18, 2021,21, 2023, nor later than the close of business on March 20, 2021.23, 2023. Any such notice must satisfy the other requirements in Sallie Mae’sBy-Laws applicable to such proposals and nominations. If a stockholder fails to meet these deadlines or fails to comply with the requirements of Rule14a-4(c) under the Exchange Act, Sallie Mae may exercise discretionary voting authority under proxies it solicits to vote on any such proposal.
All expenses in connection with the solicitation of proxies for the Annual Meeting will be paid by us. In addition, officers, directors, regular employees, or other agents of Sallie Mae may solicit proxies by telephone, telefax, personal calls, or other electronic means. We will request banks, brokers, custodians, and other nominees in whose names shares are registered to furnish to the beneficial owners of Sallie Mae’s Common Stock Notices of Availability of the materials related to the Annual Meeting, and including, if so requested by the beneficial owners, paper copies of the 20192021 Form10-K, this proxy statement, and the proxy card and, upon request, we will reimburse such registered holders for theirout-of-pocket and reasonable expenses in connection therewith.
To reduce the expense of delivering duplicate proxy materials to stockholders who may have more than one account holding stock but sharing the same address, we have adopted a procedure approved by the SEC called “householding.” Under this procedure, certain registered stockholders who have the same address and last name, and who do not participate in electronic delivery of proxy materials, will receive one copy of the Notice of Availability and, as applicable, any additional proxy materials that are delivered until such time as one or more of these stockholders notifies us that they want to receive separate copies. We hereby undertake to deliver promptly, upon written or oral request, a separate copy of the Notice of Availability or proxy materials, as the case may be, to a stockholder at a shared address to which a single copy of the document(s) was delivered. Stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.
If you are a registered stockholder and would like to have separate copies of the Notice of Availability or proxy materials mailed to you in the future, or you would like to have a single copy of the Notice of Availability or proxy materials mailed to you in the future, you must submit a request in writing to Broadridge Financial Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, New York 11717 or by calling1-866-540-7095. If you are a beneficial stockholder, please contact your bank or broker to opt in or out of householding.
However, please note that if you want to receive a separate proxy card or vote instruction form or other proxy materials for purposes of this year’s Annual Meeting, you should follow the instructions included in the Notice of Availability that was sent to you and we will deliver, promptly upon written or oral request, separate copies of the proxy materials for this year’s Annual Meeting.
2020 Proxy Statement —60 SLM CORPORATION 61— 2022 Proxy Statement
QUESTIONSAND ANSWERS ABOUTTHE ANNUAL MEETINGAND VOTING
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
Who may vote?Only stockholders who owned shares of our Common Stock, par value $.20 per share, at the close of business on April 21, 2020,22, 2022, the record date for the Annual Meeting, are entitled to notice of, and to vote at, the Annual Meeting. Sallie Mae’s Common Stock is listed on the NASDAQ under the symbol “SLM.” On April 21, 2020, 375,096,45822, 2022, 269,214,100 shares of Common Stock were outstanding and eligible to be voted.
Why did I receive a “Notice Regarding the Availability of Proxy Materials”? We are furnishing proxy materials to our stockholders primarily via the Internet, instead of mailing printed copies of those materials to each stockholder. By doing so, we save costs and reduce the environmental impact of the Annual Meeting. On or about May 5, 2020,2022, we mailedmail a Notice ofRegarding the Availability of Proxy Materials (“Notice of Availability”) to the Company’s stockholders. The Notice of Availability contains instructions on how to access our proxy materials and vote online or vote by telephone. The Notice of Availability also contains a16-digit control number that you will need to vote your shares. If you previously chose to receive our proxy materials electronically, you will continue to receive access to these materials via ane-mail email that will provide electronic links to these documents unless you elect otherwise.
How do I request paper copies of the proxy materials? You may request paper copies of the proxy materials for the Annual Meeting by following the instructions listed in the Notice of Availability, atwww.proxyvote.com, by telephoning1-800-579-1639, or by sending ane-mail email tosendmaterial@proxyvote.com.
What is the difference between holding shares as a beneficial owner in street name and as a stockholder of record?If your shares are held in street name through a broker, bank, trustee, or other nominee, you are considered the beneficial owner of shares held in street name. As the beneficial owner, you have the right to direct your broker, bank, trustee, or other nominee how to vote your shares. Without your voting instructions, your broker, bank, trustee, or other nominee may only vote your shares on routine matters. Routine mattersDO NOT include Proposals 1 and 2 but do include Proposal 3 (relating to the ratification of the appointment of the independent registered public accounting firm). Fornon-routine matters, your shares will not be voted without your specific voting instructions. Accordingly, Sallie Mae encourages you to vote your shares.
If your shares are registered directly in your name with our transfer agent, Computershare, you are considered to be a stockholder of record with respect to those shares. As a stockholder of record, you have the right to grant your voting proxy directly to Sallie Mae or to a third party, or to vote at the Annual Meeting.
How do I vote?We encourage stockholders to vote in advance of the Annual Meeting, even if you plan to attend the Annual Meeting. You may vote in one of the following ways:
• | By Internet prior to the meeting. You may vote electronically via the Internet atwww.proxyvote.com. Votes submitted via the Internet must be received by 11:59 p.m., Eastern Daylight Time, on June |
• | By Telephone. If you wish to vote by telephone, you may call the toll-free telephone number on the Notice of Availability or your proxy card, which is available24-hours a day, and follow the |
• | By Internet during the meeting.You may vote electronically via the Internet atwww.virtualshareholdermeeting.com/ |
• | By Mail. If you |
62 SLM CORPORATION —2020 Proxy Statement
QUESTIONSAND ANSWERS ABOUTTHE ANNUAL MEETINGAND VOTING
What if I hold my shares in street name and I do not provide my broker, bank, trustee, or other nominee with instructions about how to vote my shares? You may instruct your broker, bank, trustee, or other nominee about how to vote your shares using the methods described above. If you do not provide voting instructions to the firm that holds your shares prior to the Annual Meeting, the firm has discretion to vote your shares with respect to Proposal 3 on the proxy card (relating to the ratification of the appointment of the independent registered
2022 Proxy Statement — SLM CORPORATION 61
QUESTIONSAND ANSWERS ABOUTTHE ANNUAL MEETINGAND VOTING
public accounting firm), which is considered a routine matter. However, the firm will not have discretion to vote your shares with respect to Proposals 1 and 2 on the proxy card, as these are each considered to be anon-routine matter. You are encouraged to participate in the election of directors and vote on all of the proposals by returning your voting instructions to your broker, bank, trustee, or other nominee.
How do proxies work?The Board of Directors is requesting your proxy. Giving your proxy means you authorize the persons named as proxies therein to vote your shares at the Annual Meeting in the manner you specify in your proxy (or to exercise their discretion as described herein). If you hold your shares as a record holder and sign and return a proxy card but do not specify how to vote on a proposal, the persons named as proxies will vote your shares in accordance with the Board of Directors’ recommendations. The Board of Directors has recommended that stockholders vote:
“FOR” the election of each of the director nominees named in Proposal 1;
“FOR” advisory approval of Sallie Mae’s executive compensation set forth in Proposal 2; and
“FOR” ratification of the appointment of Sallie Mae’s independent registered public accounting firm set forth in Proposal 3.
In the absence of voting instructions to the contrary, shares of Common Stock represented by validly executed proxies will be voted in accordance with the foregoing recommendations. Sallie Mae does not know of any other matters to be presented at the Annual Meeting as of the date of this proxy statement.
Can I change my vote?Yes. If you hold your shares as a record holder, you may revoke your proxy or change your vote at any time prior to the final tallying of votes by:
Delivering a written notice of revocation toSallie Mae’s Corporate Secretary at theOffice of the Corporate Secretary, 300 Continental Drive, Newark, Delaware 19713;
• | Submitting another timely vote via the Internet, by telephone, or by mailing a new proxy (following the instructions listed under the “How do I vote?” section); or |
Voting at the Annual Meeting live via the Internet atwww.virtualshareholdermeeting.com/SLM2020SLM2022.
If your shares are held in street name, contact your broker, bank, trustee, or nominee for instructions on how to revoke or change your voting instructions.
What constitutes a quorum?A quorum is necessary to transact business at the Annual Meeting. A quorum exists if the holders of a majority in voting power of the Common Stock and entitled to vote at the Annual Meeting are present in person or represented by proxy, at the Annual Meeting, including proxies on which abstentions (withholding authority to vote) are indicated. Abstentions and brokernon-votes will be counted in determining whether a quorum exists. Virtual attendance at the Annual Meeting constitutes presence for purposes of a quorum.
Who will count the vote?Votes will be tabulated by our General Counsel,Chief Legal, Government Affairs & Communications Officer, who will act as the Inspector of Elections at the Annual Meeting.
Who can attend the Annual Meeting? Only holders of Common Stock as of the record date, April 21, 2020,22, 2022, or duly appointed proxies, may attend. No one who is not a shareholderstockholder will be allowed to attend the Annual Meeting.
What do I need to attend the Annual Meeting? You may attend the Annual Meeting live via the Internet atwww.virtualshareholdermeeting.com/SLM2020SLM2022. ShareholdersStockholders will need the16-digit control number provided on their proxy card, voting instruction form, or notice. We suggest you log in at least 15 minutes before the start of the meetingmeeting.
Can I ask questions at the Annual Meeting? ShareholdersStockholders as of our record date will have an opportunity to submit questions live via the Internet during the meeting.
How to Participate in the Annual Meeting | Online: 1. Visit www.virtualshareholdermeeting.com/SLM2022 and 2. Enter the 16-digit control number included on your Notice Regarding the Availability of Proxy Materials on your proxy card (if you received a printed copy of the proxy materials), or on the instructions that accompanied your proxy materials. The meeting will begin promptly at 1:00 p.m., Eastern Daylight Time, on June 21, 2022. We suggest you log in to the meeting platform at least 15 minutes before the start of the meeting. |
62 SLM CORPORATION — 2022 Proxy Statement
APPENDIX A
Reconciliation of Non-GAAP Financial Measures
(Dollars in thousands, except per share amounts)
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Year Ended
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Non-GAAP “Adjusted Core Earnings” adjustments to GAAP: | ||||
GAAP net income | $ | 1,160,513 | ||
Preferred stock dividends | 4,736 | |||
GAAP net income attributable to SLM Corporation common stock | $ | 1,155,777 | ||
Non-GAAP “Adjusted Core Earnings” adjustments to GAAP: | ||||
Net impact of derivative accounting(1) | 23,216 | |||
Add provisions for credit losses | (32,957 | ) | ||
Less: net charge-offs | (200,762 | ) | ||
Net tax benefit(2) | (50,907 | ) | ||
Total Non-GAAP “Adjusted Core Earnings” adjustments to GAAP | (159,596 | ) | ||
Non-GAAP “Adjusted Core Earnings” attributable to SLM Corporation common stock | $ | 996,181 | ||
GAAP diluted earnings per common share | $ | 3.61 | ||
Total adjustments, net of tax | (0.50 | ) | ||
Non-GAAP “Adjusted Core Earnings” diluted earnings per common share | $ | 3.11 |
(1) | Derivative Accounting: Non-GAAP “Adjusted Core Earnings” exclude periodic unrealized gains and losses caused by the mark-to-fair value valuations on derivatives that do not qualify for hedge accounting treatment under GAAP, but include current period accruals on the derivative instruments. Under GAAP, for our derivatives held to maturity, the cumulative net unrealized gain or loss over the life of the contract will equal $0. |
(2) | Non-GAAP “Adjusted Core Earnings” tax rate is based on the effective tax rate at the Bank, where the derivative instruments are held. |
20202022 Proxy Statement —SLM CORPORATION 63A-1
SLM CORPORATION ATTN: CORPORATE SECRETARY 300 CONTINENTAL DRIVE NEWARK, DE 19713 | SCAN TO VIEW MATERIALS & VOTE [ QR Barcode ] VOTE BY INTERNET Before The Meeting—Go towww.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m., Eastern Daylight Time, the day before the meeting date for shares held directly. Have your proxy card in hand when you access the
During The Meeting—Go towww.virtualshareholdermeeting.com/ You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BYPHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m., Eastern Daylight Time, the day before the meeting date for shares held directly. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL 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:
E35580-E35580-P00228 KEEP THIS PORTION FOR YOUR RECORDS
P00228
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DETACH AND RETURN THIS PORTION ONLY | ||||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
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1. Election of Directors | ||||||||||||||||||||||||||||
Nominees: |
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1a. Paul G. Child |
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1b. Mary Carter Warren Franke |
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2. Advisory approval of SLM Corporation’s executive compensation. |
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1d. Mark L. Lavelle | ☐ | ☐ | ☐ | |||||||||||||||||||||||||
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3. Ratification of the appointment of KPMG LLP as SLM Corporation’s independent registered public accounting firm for |
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1f. Jim Matheson |
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1h. Vivian C. Schneck-Last |
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☐ | 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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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]
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Form10-K are available atwww.proxyvote.com.
PLEASE VOTE, SIGN, AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
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 viae-mail email or the Internet. To sign up for electronic delivery, please follow the instructions to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
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
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E35581-P00228
SLM CORPORATION
Annual Meeting of Stockholders
June 18, 2020 11:21, 2022 1:00 AMPM Eastern Daylight Time
Via the Internet atwww.virtualshareholdermeeting.com/SLM2020SLM2022
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Nicolas Jafarieh and Richard M. Nelson 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 18, 2020,21, 2022, 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, ANDand 3, AND IN THE PROXY’S DISCRETION ON ANY OTHER MATTERS PROPERLY COMING BEFORE THE MEETING.